Smart Contracts: These don’t yet exist for IOTA/Tangle, and it’s a gigantic drawback for developers. In fact, the lack of smart contracts will be a showstopper if you want to build any sort of Decentralized Application or “DApp” with IOTA. However, the IOTA Foundation is actively working on building a smart contracts layer on top of IOTA core, which is slated to become available at the end of 2018. Here’s hoping!
Vulnerability: While there have been no publicly documented successful attacks against the Tangle, a common criticism is that it’s mathematically easier for malicious nodes to attack it. For example, it only requires 34% of the total hashing power to successfully attack the Tangle, versus 51% for Bitcoin or Ethereum, etc.
Given that Very specializes in IoT development, and blockchain — IOTA and the Tangle are fascinating to me. Extrapolating out into the future, I can imagine a world in which hundreds of billions of sensors are streaming data continuously to the Tangle, and we could subscribe to all of the relevant data streams necessary to develop excellent machine learning models based on very large data sets, even for brand new AI startup clients who don’t yet own any data. IOTA could potential enable us to leverage all three of our specialties at once for any given project!
Today, the Tangle is a great tool for storing sensor data and making it publicly visible, and we will be experimenting with it over the coming weeks and months. However, for most DApp developers who really need smart contracts in order to execute their vision, IOTA isn’t quite the tool for the job, at least at this point in time.