Open source non-profit IOTA this week launched a $2 million fund intended to foster growth of its distributed ledger technology, a derivative of blockchain technology aimed at the internet of things.
Dubbed the IOTA Ecosystem Fund, the idea is to incentivize expanding and shaping the IOTA ecosystem through use cases, libraries, tools and hackathons.
“Every great open source project has a great ecosystem surrounding it, in many ways it is the defining characteristic that separates a mediocre project from a great one,” David Sonstebo, founder at IOTA, said in a statement Monday. “A thriving ecosystem is a prerequisite for long-term success. The IOTA Ecosystem Fund is backed by over $2 million to open up a world of possibilities for developers and researchers to take the IOTA ecosystem even further.”
IOTA is based on Tangle, a third-generation blockchain technology based on a directed acyclic graph. Traditional blockchains rely on miners that compete to hash blocks of transactions in exchange for cryptocurrency (like Bitcoin). In IOTA, issuing a transaction requires users to work to approve other transactions, eliminating the transaction fees.
“It is quite evident that Bitcoin and nearly all other cryptocurrencies weren’t made to function as the network of the IoT,” writes Steffen Marburg in the the Tangler blog. “Considering hundreds of thousands of nano-payments each day in the near future, these blockchains would generate an enormous amount of fees, just for conducting transactions, while costs of these nano-payments oftentimes undermatch the fees.”
That’s where IOTA comes in. The Tangle ledger is able to settle transactions with zero fees so devices can trade exact amounts of resources on-demand, and store data from sensors and dataloggers securely and verified on the ledger. IOTA also has potential in other arears, including real-time services.
IOTA says the IOTA Ecosystem Fund is for developers who want to contribute to the distributed ledger technology. The organization says its engineering philosophy is one of modularity and pragmatism. It doesn’t want to create an ‘all-in-one’ universal solution. Rather, it intends to keep the underlying ledger protocol basic and efficient, while extending its utility through the IOTA eXtension Interface (IXI).
Developing new IXI modules requires a lot of time due the amount of research needed, so IOTA says people who are more interested in researching topics and writing whitepapers, rather than coding, are also eligible for funding through the IOTA Ecosystem Fund.
The organization says it wants to make IOTA development easier and widen its utility through libraries, so it is also encouraging anyone with ideas for libraries which could be useful to the community to apply for development funding. Similarly, it intends to allocate significant sums toward the creation and maintenance of tutorials.
IOTA says applicants must fill out a form with basic questions, including a total desired budget for the project, its scope, description and timeline. It says community representatives will then respond, ask more questions and define the deliverables of the project.