The IOTA Foundation just announced the launch of its public testnet. This serves as a culmination of the organization’s efforts to transition from its dependence to a Proof of Work consensus mechanism in favor of Proof of Stake. The update also introduces the innovative decentralized congestion control mechanism of IOTA to do away with the Coordinator.

The testnet rollout brings a lot to the table in paving the way for the next evolution of the IOTA ecosystem. These include:

1. True Decentralization

The earlier version of IOTA is managed by a centralized entity called the “Coordinator.” It is a node plug-in that sends signed blocks referred to as “milestones.” The milestones are trusted by the nodes, hence, the blocks they directly or indirectly reference to are instantly deemed confirmed and used to reach a consensus.

IOTA 2.0’s PoS system also replaces the Coordinator with a Validator Committee. This way, network control is no longer just concentrated within centralized figures. Instead, it is democratized across stakeholders operating as validators within its ecosystem.

2. Enhanced Sustainability

The PoW model has always been a subject of criticism for its energy-intensive requirements. PoS allows IOTA to have a more sustainable operation that aligns with its foundation’s eco-friendly goals. Along the way, it also offers better scalability and increased efficiency in its network.

These are essential aspects of the update as several organizations and businesses are now partnering up with IOTA. In addition to the advanced technologies the platform brings, it’s important that its products and services harmonize with the sustainability goals and regulatory compliance processes of its partners, too.

3. Better Security

The PoS consensus model reinforces IOTA’s high security standards. This element ensures the integrity of the system. It is also crucial in maintaining the trust and confidence of all actors within the IOTA ecosystem.

Why These Things Matter

IOTA’s latest development comes at an opportune time when blockchain and cryptocurrencies are now experiencing a broader adoption in different sectors. The Foundation itself has been at the forefront of this revolution as many industries have recently been unlocking various use cases of its technology.

Among the popular projects globally involving IOTA include:

  • The Trade Logistics Information Pipeline (TLIP) that simplifies the cross-border exchange of trade documents via tokenization.

  • Collaboration with Tokeny for the convenient issuance, transfer, and distribution of securities using digital ledger technology (DLT).

  • Tokenized KYC that integrates proof of identity documents to the blockchain to unburden developers and businesses from the often complex Know Your Customer regulatory requirements.

  • Membership in the TradeTech Global Initiative that aims to harness the true potential of the merger between artificial intelligence (AI) and the Internet of Things (IoT).