- In a Discord contribution, Eric Hop talked about the advantages of IOTA smart contracts over blockchain alternatives, such as those from Ethereum.
- According to Hop, IOTA’s smart contracts are more flexible and resource-efficient, which is why there are many more use cases. However, they are less suitable for the transfer of large amounts of funds.
Eric Hop, senior developer at the IOTA Foundation responsible for the development of Qubic and the new IOTA Smart Contracts, recently gave some interesting insights into the progress of the project. Hop also informed about the advantages of the IOTA smart contracts in comparison to Ethereum for example.
Via Discord, Hop described how the development of the smart contracts that were once part of the large Qubic project has taken a big step forward since Sergey Ivancheglo (aka CfB) left the IOTA Foundation:
We have been at it for Qubic for over 2 years, but could not get the consensus layer to work easily because the protocol was not supporting us. And CfB was constantly fighting any changes we asked for to the base protocol. Now that we have the chance to add some stuff to the basic protocol we’re moving forward at huge speed. Evaldas did an awesome job iterating through several revisions of ideas to pinpoint exactly what we needed to make SCs happen in a simple and elegant way.
The advantages of IOTA Smart Contracts over blockchain alternatives
Hop also emphasized the advantages of IOTA and wrote that the IOTA Smart Contract Protocol (ISCP) is much more flexible and resource-efficient than any blockchain alternatives. As a result, they enable use cases that were impossible due to the transaction fees of blockchains like Ethereum. In particular, Hop mentioned the field of the Internet of Things (IoT), where micro transactions are the norm. Regarding flexibility, Hop stated that IOTA’s smart contracts are not limited to a single built-in virtual machine (VM):
The protocol allows for specification of the VM that will have to be used to correctly process the SC code. This opens up the possibility to use other programming languages, different VMs, and even different SC protocols in parallel with the basic ISCP. This means that we are able to provide a very flexible path for future changes and extensions.
Furthermore, IOTA smart contracts are more flexible in the area of how the consensus is reached. Ethereum smart contracts are validated on the blockchain during the consensus building process. This implies that the truth they confirm must be recoverable from a previous transaction. IOTA smart contracts do not have this limitation.
IOTA makes use of so-called committees, a selection of nodes that jointly find a consensus and send the results to the Tangle. The size is determined by the issuer and operator of the smart contract. Hop wrote that this is a significant advantage, because depending on the application, smart contract creators can opt for very small committees or for larger committees if the trust and reliability of the smart contracts is of high importance.
In terms of machine economics, they also offer the advantage of not being limited to value transactions:
Finally, IOTA SCs are not necessarily invoking value transactions on the Tangle. Essentially an IOTA SC can be viewed as a generic event-driven immutable state machine. Immutable in the sense that any state change is immutably recorded in the Tangle. IOTA SCs enable classical SCs that can move tokens, but also open up a whole world of processing once you view them as autonomous state machines that can be interconnected in all kinds of interesting ways. This opens up the way for all kinds of distributed processing, and it will be very interesting to see what kind of applications will be created in the future by our community.
Ethereum smart contracts are better for high value transfers
At the same time, Hop also stressed that there are applications where IOTA’s flexibility is a disadvantage and where Ethereum smart contracts are more suitable than those of IOTA:
Locking a large sum of money in a contract for a long period of time is much safer when you can depend on the entire network still being there to process it, like with Ethereum, whereas a committee, due to its limited size, is less guaranteed to be there after a long period of time.
✔️ Buy 15 cryptocurrencies
**= Risk warning: 75% of retail CFD accounts lose money when trading CFDs from this provider.