IOTA (MIOTA), short for Internet of Things Application, is a platform that proposes a revolutionary way of processing transactions and data transfer between IoT devices.
What is IOTA?
Blockchain technology is being used by a large number of cryptocurrencies and projects that operate in the industry. However, IOTA works with a different approach in which it aims to remove the need for blocks, thus improving scalability and eliminating the necessity for fees. For example, Bitcoin transactions are currently processed by miners in groups called blocks, and there’s a limit on how many transactions the network can process.
Indeed, Bitcoin has a consensus algorithm called Proof-of-Work (PoW), in which miners verify transactions using powerful computers known as ASIC. These mining activities are very expensive to be performed and they consume large amounts of energy, which is worrying many enthusiasts and individuals around the world. Bitcoin miners earn rewards for this work they do.
At the same time, there are other blockchain networks that work with a consensus algorithm known as Proof-of-Stake (PoS). Instead of securing the network with ASIC miners, PoS networks allow users to stake a portion of their coins in that network to confirm transactions and earn rewards.
Unlike most blockchain-based projects, IOTA allows anyone to submit a transaction just as long as two other previous transactions are verified. This means that there’s no central ledger in IOTA and, thus, no need for miners to actually power the network. Thus, the way in which IOTA operates is different from how traditional blockchain networks are currently operating in the market.
All of this is possible thanks to a technology called “Tangle” which is basically a DAG, short for Directed Acyclic Graph. This distributed ledger ensures that IoT devices on the network are responsible for verifying each other’s transactions.
The Tangle is one of the most revolutionary and interesting features of IOTA. As mentioned before, the Tangle is based on data structure that is called Directed Acyclic Graph (DAG). That means that when a person or company wants to perform a transaction, it will have to approve two previous transactions on the network through energy provided by the device from which the transaction is being processed.
With this new system, it may be possible for the network to expand and become more scalable as it grows. The more individuals and companies participating in the ecosystem, the faster and scalable the network would operate.
Other blockchain networks require miners to process these transactions and to use large amounts of energy. Through the Tangle, the participants themselves are going to provide a small PoW to the network. While other networks get congested as they increase the number of transactions and users, IOTA becomes much more competitive and faster.
This doesn’t only result in fast transactions, as Tangle is also capable of processing micro-payments, or nano payments as they’re also called, between IoT devices.
Traditional cryptocurrency networks are yet not ready for supporting enterprise-level applications. IOTA creators consider that it is imperative to create an inclusive and permissionless crypto network that would meet the demands that currently exist in the market.
Through the Tangle, IoT devices will be connected through intermittent networks that would allow them to transact in a more efficient and cost-effective manner. Rather than using blockchain technology, they work through a stream of individual transactions that are interconnected and create the whole network.
How IOTA improves scalability
For starters, it’s important to note that IOTA is not based on blockchain technologies. The team behind IOTA has created Tangle, a system that is responsible for the consensus. The consensus is reached based on web of verifications. In short, each transaction is directly connected to the two transactions it has previously verified, and will be eventually linked to future operations that verify it.
The system eliminates the need for block mining and, consequently, solves the scalability problem usually associated with most blockchain systems.
Why IOTA is Free to Use
The absenteeism of fees is one of IOTA’s most important traits. This allows IoT devices to transact small fractions of currency at a very high frequency. Anyone on the network contributes to its computing power, hence the cost of using it is infinitesimal.
Basically, the only cost is the one required for powering a device for verifying the two other transactions. Thanks to the Tangle, IOTA is more distributed than any other blockchain-based system.
One of the team’s primary goals is to create the go-to platform for machine-to-machine transactions. The Internet of Things is already a big thing nowadays and it’s sure to show even more growth in the following period. Having vast experience in the IoT field, the team understands the importance of resource allocation.
With IOTA, devices can purchase all the resources required for working as efficiently as possible, and sell or share them if they’re not needed.
As previously mentioned, the team is comprised of multiple individuals with vast experience in the IoT field. The most prominent name is that of the founder, Serguei Popov, a professor in mathematics with a strong focus in Probability Theory.
Sergey Ivancheglo and Dominik Schiener are two other big names, as they are the ones who have implemented IOTA’s protocol. The first is also said to be the founder of NXT, another open source payment network based on cryptocurrency initially launched under the pseudonym of BCNext.
The team distributed all the IOTA tokens through an industry-standard ICO. The total raised was around $584.000, a part of which has been used to create the Iota Foundation in Germany, an institution responsible for the project’s development.
In every single company or organization, the team behind the main projects is one of the most valuable assets. Working in different conditions, with experience in the market and other industries, they would be able to drive adoption, increase awareness and help the virtual currency project expand even further.
How to buy IOTA (MIOTA)
The cryptocurrency was launched on June 11, 2016, and the total coin supply is 2.779.530.283. IOTA is the smallest possible unit of the token and, because of the high number of tokens, it’s listed on most exchanges as MIOTA (1.000.000 IOTA).
One of the best platforms to purchase this digital currency is Binance. This cryptocurrency exchange is one of the largest in the world and it has been operating in the cryptocurrency market since 2017.
This cryptocurrency exchange allows users to purchase a wide range of digital assets. The platform is known for having one of the best liquidity for altcoins in the world. Binance has the second-largest liquidity for IOTA in the whole ecosystem, accounting for over 27.5% of all the trading volume related to this cryptocurrency.
The trading pairs available include IOTA/BNB, IOTA/BTC, IOTA/ETH and IOTA/USDT. The fastest way to acquire this virtual currency is by purchasing BNB, BTC, or ETH using a credit card and exchanging the funds received for IOTA. IOTA accounts for 0.2% of all the trading volume on Binance.
The past, present, and future of IOTA
As with all innovative projects of this sort, IOTA has seen its fair share of technical problems and criticism. A team at MIT published an article in which they described their thorough investigation into IOTA. The biggest uncovered issue is the fact that the IOTA team has developed its own cryptographic hash function, basically creating a cryptographic system from scratch.
Since efficient cryptography requires an extensive period of development and testing, this has led to major concerns regarding IOTA’s security vulnerabilities. The team has since fixed this issue; however, this situation has led to price instability for the IOTA token.
IOTA brings to the table a lot to be excited about by using technology that might one day change the IoT world and our daily lives along with it. It’s true that the technology is fairly new, and a lot more testing is required, but if the team manages to accomplish even half of what they’re shooting for, IOTA could become the next noteworthy advance in the cryptosphere.
The fact that IOTA is scalable and doesn’t require fees should be enough to capture the attention of smart investors. However, just like most decisions of this sort, a potential investment should be based on proper research and a basic understanding of what the platform offers.
The IOTA cryptocurrency is currently the 19th largest in the market according to CoinMarketCap. It also has a valuation of $731 million and a price of $0.26 per coin. However, this virtual currency has not always been traded in the same way. Indeed, like other digital assets, IOTA experienced volatility.
IOTA reached its highest price in December 2017 when it surpassed $5.55. In terms of BTC, the virtual currency hit 0.00044686 BTC in December of the same year. However, a bear market followed in 2018, something that affected most digital assets around the world. Indeed, the virtual currency fell to $0.2 on December 2018, representing a price decrease of 96.3% in just a year. In terms of BTC, IOTA reached its lowest point a few weeks ago when it was traded around 0.00002126 BTC per coin.
Regarding the future of the digital currency, it will be important to understand how the team behind it is going to be expanding its use cases. Moreover, it could be very bullish for the digital currency to be embraced by companies around the world that would leverage the Tangle solution.
Its price will fluctuate according to macro cryptocurrency market trends and taking into account different developments that will be influencing this digital asset.
IOTA is also working and cooperating with many different companies around the world. According to the IOTA Archive, there are universities, airlines, energy firms, banks and other corporations working or showing interest in IOTA.
Some of these firms include Accenture, Audi, American Airlines, Banco Santander, BBVA, DZ Bank, Infosys, KPMG, NVIDIA, Refunite, and many others.
For example, Accessec presented its IOTA CarWallet at the 5th VDI Conference on Cyber Security for Vehicles, showing that there is a clear use case for IOTA in the automotive industry. Moreover, they have also published an article on how digital patients are able to increase their privacy through IOTA.
— accessec GmbH (@AccessecG) July 10, 2019
In addition to it, Den Norse Bank hosted a meeting with its partners, including Entra, DNV GL Veracity, IOTA Foundation and many other stakeholders. Furthermore, DNB ASA has signed a memorandum of understanding (MoU) with the IOTA Foundation to collaborate on exploring new innovations in the technological landscape.
Finally, Deutsche Bahn has also been searching for a Software Developer or Business Engineer with practical experience in IOTA. The firm has created a blockchain team that works in order to find solutions for the challenges the company is currently facing.
Some of these partnerships had a momentaneous impact on the price of this digital asset. This has allowed IOTA to be one of the most recognized networks in the crypto market.
In this article, you were able to see which are the main qualities and features of this crypto network and how the team behind it is working so as to make of IOTA a revolutionary project.
Although its price has been lagging behind compared to other digital assets (IOTA was among the top 10 digital currencies and now is close to the 20th place), the organization and community have the potential to bring IOTA to many other companies around the world.
At the moment, there are many firms and institutions that showed interest in IOTA and that are working side by side with the IOTA Foundation to be able to leverage the benefits of the Tangle and the IOTA ecosystem.
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