Is IOTA’s Shimmer of Hope Yet Another False Promise?

Monday, 13/12/2021 | 15:06 GMT by James Clifford

After nearly seven years of promising decentralization and other key features and three to four years of significant developments with global corporations, What has IOTA got to show?

The latest IOTA Shimmer announcement comes with the release of an NFT staking element that has not been without criticism from the crypto community

Is IOTA’s Shimmer of hope another false promise? IOTA announced the Shimmer network on November 21, 2021 ... again. And again, it made great fanfare for the launch of something that is nothing. Let's recap and rewind for two main reasons; one: for many years, IOTA claimed their ternary-based network was far better than blockchain, even in terms of security; two: Shimmer was one of the many promises of 2018, 2019, and still today. It continues being just that, a promise, because it does not yet exist.

In IOTA's own words: "The Shimmer network will be (not is) the official, incentivized staging network of IOTA. It will be an essential part of IOTA's path to increased utility, ecosystem growth and full decentralization. Shimmer will help to publicly validate every major upcoming upgrade before they reach the IOTA network."

That means there is nothing yet, except for this roadmap with no specific dates for the launch or release of anything it mentions.

And, with the new Shimmer announcement came the shimmering promise of smart contracts and staking that can only exist on the blockchain, which would render the current IOTA Tangle network more useless than it already is.

But, the Shimmer announcement is the same one they made three years ago, according to a post by Masterthematrix on Steemit and Ecency. This is what he said back then: "IOTA just announced its new consensus mechanism - Shimmer. Could this be superior to Proof-of-Work and Proof-of-Stake?"

That, of course, is the title. This is the first paragraph: "Yesterday, IOTA announced their new solution (Shimmer) to replace the centralized Coordinator, which has controlled the network to prevent double-spending and other forms of abuse in the network."

On May 28, 2019, an IOTA YouTube video announced Coordicide and Shimmer again and explained how the Berlin-based startup would be fully decentralized. A lot of production went into the video that announced how it would enable billions of machines to transact data without fees.

On March 8, 2021, Charles Hoskinson, the Ethereum Co-Founder and Founder of Cardano, contradicted IOTA's fee-free claim saying they do have fees in a YouTube video. "They are just subsidized in a different way. Guys, there's network capacity, CPU and data, and it costs money. Nothing is free," he said smiling. He goes on to explain that a network requires storage and that storage costs something.

Broken Promises

Coinsider (115k subscriber) host ‘Kevin’ in a video with over 15,000 views, explains he decided to give up on IOTA after a series of broken promises. On 5 April 2021, Kevin said that after four years with IOTA, he has not seen anything but one disappointment after the other. "After one hard look, I decided it was not worth it anymore because the negatives far outweighed the positives."

Kevin was initially a big IOTA fan, with dozens of videos favoring the project. He spoke profusely about JINN, and how that device would revolutionize smart devices enabling their communication with IOTA's Tangle ternary network and binary systems, the ones all other tech systems use worldwide. IOTA first announced JINN in 2014, and after years of mystery, it "was announced dead."

The Unfair NFT Consensus

The new IOTA Shimmer announcement comes with the release of an NFT staking element that has been criticized heavily. Siccors says it is a horrible idea because the IOTA Foundation "is going to sell special NFTs which give some people more rights than others on the new network."

Reddit user Alive Opportunity708 said, "there are many reasons why this distribution is not fair. This distribution divides investors into good and bad. For those who participate in staking, and those who do not. All investors must be equal, everyone has invested their money in IOTA, everyone should get SMR (the Shimmer token that for now has no value)." He also said it simply makes the "rich even richer."

IOTA's Rise to Infamy?

The Microsoft publicity stunt to increase the price of IOTA? Could that be true? Well, the fact is IOTA was sketchy about their false partnership with Microsoft in November 2017. The price rose by over 600%. Not until December 12, 2017, IOTA finally "angrily" admitted it had not actually partnered with Microsoft.

However, they rode the false statement to fame. On December 6, 2017, CNBC covered the story in an article entitled "A little-known digital currency surges 90% after teaming up with firms like Microsoft."

More recently, on Itsblockchain.com an author wrote about JINN, the microprocessor that many believed Bosh would manufacture. "This ('partnership') is still a rumour, and nothing has been confirmed as of the time of writing," it adds.

IOTA’s Tangle Not So Secure After All

IOTA founding members continuously boasted how secure Tangle was. In a February 12, 2016 interview with Chain of Things, the IOTA Founder and CEO, David Sonstebo said, "the importance of security in IoT cannot be overstated." Additionally, he said, "it is quite daunting to think of the repercussions of failing to take security into account while engineering the technology that this ever-growing ecosystem emerges from."

In January 2018, IOTA got hacked for the first time. And, although the IOTA Foundation claims to have recovered nearly 99% of the $11 million stolen and the culprit jailed with the support of a European enforcement agency, the team apparently did not learn their lesson.

In February 2020, IOTA shut down its entire network for nearly 3 weeks after hackers exploited another vulnerability stealing $2 million worth in IOTA tokens.

Perhaps They Should’ve Listened to MIT

On December 20, 2017, Joi Ito, the MIT Media Lab Director, spoke of a gaping hole in IOTA's software his MIT Digital Currency Initiative colleagues had found. "And while that flaw has now been patched, we certainly disagree with … the assertion that IOTA is 'secure'." Moreover, Ito says, "IOTA's relationships with top-tier companies continue to be nebulous."

"Whether or not IOTA's ledger is 'tamper-proof', the entire IOTA network went down in November and was completely inoperable for about three days. That this has never happened in Bitcoin or Ethereum suggests the extent to which the IOTA network relies on the 'coordinator', a single point of failure, and is not truly decentralized," wrote Ito.

"Also troubling, IOTA developers were able to transfer funds out of users' IOTA accounts. The user was then required to participate in a 'reclaim' process to request their funds. We believe IOTA's developers should not have access to such funds; it's rife with risk," he added.

A Chapter of Absurdism

The list of broken promises and undelivered releases is long, and space for this article is limited. But, it was impossible to end this story without mentioning an article that speaks, among other things, about how "by 2019, They will question and threaten security experts if it doesn't align with their world vision, such as Open Privacy Founder, Sarah Jamie Lewis, who found flaws in IOTA research and faced backlash when she zeroed in on issues that IOTA Tangle has faced."