IOTA claims it provides solutions to failings of BTC and ETH

The core difference comes down to how the networks verify transactions. Bitcoin and Ethereum both rely on mining, where participants solve complex math problems to validate blocks. This requires expensive hardware. Few can afford such equipment, so mining power concentrates among the well-capitalized.

"In reality, it's just five or ten big operators that control the whole network. That's Bitcoin. That's Ethereum. That's how they operate, and they will always operate this way. It's the only way that they can operate," Sønstebø said.

IOTA uses what it calls a "tangle" instead. To add a transaction, the sender must first approve two previous transactions. This approach lets users participate in validation without mining rigs.

Sønstebø sees blockchain as a starting point rather than a finished system. "Blockchain itself was what I would call a prototype. It's what you build a minimum viable product. It works. It proves the different concepts, but it doesn't really work when you want to scale it," he said.

He argues IOTA solves three problems at once. "You can have scaling, or you can have decentralization, or you can have a low cost. And in IOTA, we're able to solve all three of them. And that's a huge, huge, bold promise," Sønstebø said.

Yet the market has not embraced the innovation. IOTA's price token (MIOTA) trades below $0.30, far from its 2017 peak. Ethereum has attracted large numbers of DeFi developers. IOTA has not. The network has recovered from the broader crypto downturn earlier this year but remains out of favor with traders and builders.