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?
More precisely, the team behind IOTA 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.
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.
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 most noteworthy advantage of this technology is the fact that the network transaction speed increases as the number of users increases, unlike other blockchain and cryptocurrency projects that have massive problems once the number of users rises. Another notable advantage is the fact that it eliminates the need for paying miners for doing proof of work, which results in a system that requires no fees.
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.
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.
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).
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.
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