TangleHUB develops PIPE. An open source, decentralized data storage and transfer infrastructure for any data use case, from edge micro-storage to high-frequency IoT and high-volume data applications.

PIPE is fast, secure, scalable, and gives users ultimate control over their data. It stores and transfers data, with data channels anchored on the IOTA Tangle. PIPE separates throughput from trust, which enables optimal usage of the Tangle consensus. With PIPE, a single message on the IOTA Tangle provides any person, device, or NFT with as much decentralized storage as they need to immutably store data.

We’re excited to share this because PIPE not only makes data use cases cheaper and much more scalable. It makes them faster as well. But why is this necessary? Isn’t the IOTA capable of storing data? We’ve worked on building data use cases on the Tangle, and IOTA has some practical limits that prohibit scalable high bandwidth and high frequency data storage use cases.

We need to talk about IOTA 2017

We chose to build on IOTA in 2017 because of its focus on IoT data. There is just so much untapped potential in pure data applications on DLT. But IOTA’s goal in 2017 was much bigger than what is being built right now. The most important difference for us is that the Tangle won’t be able to store a lot of data. But because we didn’t want to give up on the idea of data use cases, we’ve built the best decentralized data storage solution we could think of.

A bit of history: “2017 IOTA” promised unlimited feeless transactions and near infinite storage capacity. The Tangle would keep IoT data cheaply, or even for free. This idea hasn’t materialized by 2022, partly due to problems with selective permanodes. More on that in a bit.

The IOTA Foundation understandably shifted focus to solving urgent problems like Coordicide and smart contracts first, but it meant that a hard limit was put on the number of transactions the Tangle could handle. This makes data-heavy applications infeasible for now, because the cost of congestion will most likely kill the use case. Remember, cost was one of the reasons feeless transactions were crucial.

Why IOTA 2.0 can’t or shouldn’t store data

Since the “infinite data storage” story from 2017 still lingers, we’re going to address the numbers, showing limitations on a hard-capped protocol like IOTA 1.5 and 2.0. While data can be stored on the Tangle under Stardust and IOTA 2.0, there are a few issues.

The first one is cost. Both byte cost and mana are relatively affordable with low IOTA token prices, but these prices will change with an expected token price increase when IOTA becomes successful. The calculation below shows a mana cost comparison, but it will turn out similar for byte cost storage. Anyone who does this cigar box calculation will realize that moving large amounts of data through the Tangle is impractical, and what is possible now will be unaffordable in the near future.

*This calculation is not financial advice. Read the disclaimer at the bottom of the page.

IOTA is feeless, but opportunity costs can be estimated with a cigar box calculation. Link to the calculation. You can discuss this calculation with us on our TangleHUB Discord.

The second, bigger problem is that the total throughput of the Tangle will be in Mbps. Even though the final specification is not set, it’s reasonable to assume that this will not be enough for any real-world data dapp use cases since the Tangle can’t handle more data than a residential internet connection. Any data use case that even comes close to being successful will immediately clog the Tangle, making it useless as a solution to the problem.

IOTA is still great for data use cases

Ironically, the calculation above does show that IOTA is still the best Layer 1 for data applications. This is because it does offer quick, affordable, and plentiful trust anchors – even at high token prices. A trust anchor, in short, provides a way to determine that what is written in a data channel comes from the owner of the data channel. All that is needed is a method to handle the throughput and storage of large volumes of data outside of the Tangle.

Despite all the changes to the scope, there are still many companies working on implementing solutions on IOTA because it remains the most qualified Layer 1 (to them and us). For high frequency and high bandwidth data storage, like supply chain tracking, smart manufacturing, data markets, or smart cities, the Tangle clearly lacks the capacity.

And we’re not the only ones who realize this, because we’ve talked to many companies looking for decentralized storage solutions. Most use IPFS for the data storage component, but nobody is really happy with it. (In a later post, we’ll dive deeper into the pain points of IPFS.)

IPFS, the IOTA way

When we were looking for a decentralized storage solution for our project, we were in the same boat as many other projects. We tried IPFS but didn’t like it. Instead, we built our own storage and solved the capacity problem by anchoring trust on layer 1 and moving the bulk data to a data-optimized tangle on Layer 2, based on our open source Freighter solution. This combines the security and provenance of Layer 1, while allowing for sufficient throughput and remaining cost-effective at high volumes. And specifically for the IOTA community: our hybrid API enables developers to migrate to PIPE with one single action.

In short, PIPE gives users back control over their data:

  • Highly scalable, immutable data storage and transfer.
  • User-oriented in design and performance.
  • The PIPE token makes sure anyone can store data and offer data storage.

Our solution provides the same basic function as IPFS/Filecoin does – decentralized storage and transfers – but with the benefits of learning from all the decentralized storage solutions before it. This allows us to create a faster, better scalable, and more affordable storage solution.

How the IOTA Tangle and PIPE synergize

With the IOTA Tangle focused on enabling technologies like smart contracts and DeFi, PIPE fills in the requirements for decentralized data storage. Removing the need to store large amounts of arbitrary data allows the IOTA Tangle to run more efficiently, and PIPE offers amounts of storage and speeds that the Tangle could never handle. This is a benefit for all IOTA users and use cases.

  • The IOTA ecosystem is rich with data-oriented use cases.
  • The PIPE infrastructure anchors on the IOTA Tangle for trust and enhances the Tangle by removing bulk data throughput.
  • Both solve an essential piece of the puzzle.

What’s next?

In the following posts, we’ll go over some of the use cases that PIPE aims to solve and explain why PIPE is the best solution for them. After that, we’ll dive deeper into PIPE’s underlying technology. This makes us ready to release the tech demonstration and publish a roadmap, litepaper, and pre-ICO details.

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These are ballpark figures double-checked with an economist, based on our best understanding of how mana will work in general. The parameters allow for the testing of various scenarios, but they do not guarantee a specific future price. The model is a simplification that roughly estimates the opportunity costs of owning IOTA for a data use case to gain dependable Tangle access and as such hedge against extreme mana cost volatility. As a result, this calculation does not take into account the volatility of a potential mana market, only the opportunity cost of mana via IOTA token ownership. It also does not take into account the volatility of the underlying IOTA asset, assuming that its price will stabilize with increased adoption.
This calculation is for illustration purposes only and does not constitute financial advice.