In the German crypto scene, IOTA is a star among crypto currencies and a popular investment object. But a current analysis raises doubts and notes: The financial reserves of the IOTA Foundation are dwindling rapidly and the situation could endanger the future viability of IOTA.
Will the IOTA Foundation become insolvent in August 2021? Already this spring, an insider described such a scenario and now an external analysis comes to the conclusion: If there are no decisive changes in the expenses of the IOTA Foundation and at the same time IOTA’s value continues to stagnate, the reserves will be exhausted in late summer 2021. The IOTA Foundation still holds almost 60 trillion MIOTA in its publicly accessible account and these are currently worth around 23 million US dollars. On average, the IOTA Foundation makes 4.6 Ti in monthly payments, which would simply empty the account in August 2021, according to the logic behind the worrying news.
Financial policy at IOTA is a sore point
Now IOTA does not only trust in the box that was originally created. Actually, the IOTA Foundation should also generate income through donations and user fees for technology. In addition, IOTA had probably assumed that MIOTA would increase in value. The donation situation can be viewed publicly here and remains modest in the overall picture. IOTA is still threatened with further risk by the claims of co-founder Sergey Ivancheglo (CFB), who argues with lawyers and wants to be paid out.
2021 is also a critical date for IOTA, because the project Coordicide is now considered to be on track. This is intended to shut down the central coordinator in IOTA’s network and allow a truly decentralized block chain to take over. This step is seen by industry users as crucial to building trust. After all, IOTA wants to become the standard solution in the Internet of Things (IoT) not only for the automated exchange of data, but also for payment transactions. The fact that the IOTA Foundation with its coordinator can intervene in case of doubt contradicts the principles of the innovative crypto industry.
Thus it remains a race against time for the IOTA Foundation, some experts believe. Without Coordicide, no new capital will flow towards IOTA, they believe. At the same time, the list of internal disputes at IOTA about financial assets is long and chairman David Sønstebø does not make a charitable impression. In addition, there are serious objections from early investors who feel cheated. So things are by no means as rosy at IOTA as the foundation’s centre of power likes to claim.
Conclusion: IOTA remains a risky bet on the future
When the starting signal sounded at IOTA in the middle of the 2010s, the concept was fascinating. In the networked everyday life of the future, a stable protocol is needed to exchange data in a tamper-proof manner and to conveniently handle payment processes. The Internet of Things is not a buzzword – IoT is a reality and has long since left the niche of technology enthusiasts in the smart home application. But IOTA has not always been able to keep up with the pace and sees competitors such as Hedera Hasgraph or NANO in the crypto industry. IOTA’s future success is therefore by no means guaranteed and the question of financing technological development work is probably more urgent than sometimes assumed.
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