IOTA requires a widespread global network consisting of a large number of nodes in order to function properly.

Someone has to pay for the nodes that require bandwidth, memory and disk space. They are not free resources to the network.

However, given that IOTA collects no fees and does not reward node operators, what actual plausible incentives exist for running one?

In other words, why spend hard earned money supporting the IOTA network for free when it isn't even proven that it can run without the Coordinator?

Not counting "fanclub" or "generosity" as reasons, how does IOTA plan on ensuring that a worldwide network of nodes is constantly and consistently available?

How will IOTA ensure that the node network is decentralized (managed and run independently of IOTA) and adheres to a quality-of-service that payment and IoT companies can depend on?

  • "However, given that IOTA collects no fees and does not reward node operators, what actual plausible incentives exist for running one?" -- How are Bitcoin node operator rewarded? Answer my question and you'll probably get the answer to your own question. – Come-from-Beyond Nov 23 at 13:29
  • The bounty will go to mihi. The system won't let me assign it for 24 hours. – The Coordinator Dec 2 at 23:01

Some possible incentives for running nodes (other than the ones named in your question):

  • People who want to run statistics on live tangle data will have a much easier job if they have the data locally in a full node (and get all changes pushed periodically) than when they try to query another full node (or have to wait until somebody provides a database of historical data to download and analyize)

  • Having adopted IOTA as a company, by running your own nodes you can easily avoid all the SLA issues and depending on others to run nodes for you. In case more than one company has adopted IOTA, it will still be decentralized

Those are not strictly economic ones (which you can do to "earn money"). But in case IOTA gets adopted, there are some possible economic incentives as well

  • Hosting nodes on behalf of companies that adopted IOTA and providing some SLA to the companies (getting paid by them) - similar to today's situation of companies who run OpenStreetMap Geocoding Servers¹

  • Running permanodes. Currently there is a permanode running (thetangle.org) which provides its data free of charge, but there are already plans of changing that. And with larger tangle sizes, and users who are interested in historic data, it is not unlikely that this happens.

  • Last but not least, if (and that is the bigger if) Qubic gets finalized and adopted, there will be direct econonomic benefits of running a Qubic node (assuming you can share the computational power required), which will probably perform better if you also run the IOTA node for it

In other words, as long as IOTA is still experimental technology and no company adopting it, other than technical interest (which you may subsume under "fanclub") or statistic purposes there are not many incentives of running nodes. And I can see that this is a vicious circle - as long as nobody has adopted it, nobody else will adopt it either.

That being said, I do not believe that the IOTA Foundation has a (direct) interest in trying to keep the network decentralized. They will do so if it helps to get their technology adopted, but if they can get it adopted without having it fully decentralized, they probably won't care about ensuring centralization and/or removing the Coordinator.

¹ Those are also known to be very resource intensive (for the whole world - i. e. planet.osm - expect about 1TB of hard disk space and about 1-2 weeks for a full database reindexing on typical datacenter hardware), but there are companies that are hosting them for companies that don't want or are unable to host them themselves and don't want to pay to other, more expensive, commercial geocoding services.

  • So, in a sense, you answer the question by saying that a small number of service nodes will possibly exist. But that does not serve the IOTA vision very well and it most certainly does not insulate participants from bad actors. At least that is what I take that your answer infers. – The Coordinator Nov 24 at 6:20
  • This conversation has been moved to chat. – mihi Nov 24 at 14:09
  • I have added my queries about your answer inline. Hope you don't mind and I look forward to seeing how you address those issues. I'd like to issue you the reward but I don't see that you have approached the question critically enough. I look forward to your responses. – The Coordinator Dec 1 at 20:51
  • well I guess they got deleted. I will answer my own question then. – The Coordinator Dec 1 at 21:31
  • I have created a room to discuss this and your last hidden comment to me. chat.stackexchange.com/rooms/86528/… – The Coordinator Dec 2 at 21:57

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