What is IOTA?

What is the cryptocurrency IOTA

The History of IOTA

The general idea behind IOTA was to create an altered version of the blockchain which was focused on the Internet of Things. A team of developers, including Sonstebo, Ivanchelgo, Schiener, and Popov, introduced such a distributed network in 2015. One of their main goals was to maximize the efficiency of payments between all Internet of Things-devices. This meant not only increasing transaction speeds but also making transactions unlimited and cost-free.

The Early Years

IOTA officially entered the beta testing phase in 2016. During a year-long period of beta testing, the network was only used as a payment system. It was only possible to buy and sell MIOTA over the counter (OTC). At the time, IOTA was an unfinished product with several issues that needed to be figured out before the currency would be accepted on large scale exchanges. The development process continued as the team focused on improving the network and getting it to a new level of scalability.

The Final Steps

In May of 2017, an effective payment system was finalized and all major issues were addressed. IOTA officially announced an ecosystem worth $10 million in funds, which was established to promote larger corporate collaborations. One month later, Bitfinex Outlier Ventures invested over 1 000 000$ into IOTA. During the summer of 2017, IOTA was listed and traded on a couple of exchanges like Bitfinex and Binance. The network quickly gathered momentum as the community recognized its achievements and advantages. Services such as SatoshiPay quickly became interested in IOTA. In November, the IOTA Foundation was officially announced as a non-profit organization that oversees the IOTA network. Their goal was to ensure that the network is license-free for all developers who want to work with it.

Specifications of Iota

Ticker Symbol IOTA or MIOTA
Founder(s) David Sønstebø, Dominik Schiener & Dr. Serguei Popov
Date of Release 2015
Consensus mechanism Proof of Work
Hashing Algorithm Curl / SHA256
Maximum supply 2.779.530.283 MIOTA
Average Block Time n/a
Mining reward n/a
Average blocksize n/a
Next Block Halving n/a
Smart Contracts n/a

The Price of IOTA

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Unique Aspects of IOTA

In a world where hyper connectivity is around the corner, the Internet of Things is still in its early days. As of this moment, there is no real framework or alternative for Internet of Things devices and networks which could exchange value and data efficiently. IOTA’s developers saw this shortcoming as their opportunity to create a network that is better, unique, and flexible. They made it their duty to fulfill this shortcoming with the IOTA network.

Internet of Things

Most simply put, IOTA is built around the emerging IoT trend. IoT is the term given to the collective group of devices which access the internet to work in synergy and create or use data. IoT devices can include anything from a smart fridge to digital door locks. Unlike other distributed networks, the IOTA was created with one idea in mind - to turn it into something more than just another cryptocurrency. The initial project of creating IOTA was designed to capitalize on the IoT, which developers realized was the perfect path to creating something different and never seen before.

DAG and Tangle Explained

What makes the IOTA different is the fact that it gives the traditional blockchain technology a unique twist. While a conventional blockchain uses a linear distributed ledger model, IOTA is using a Directed Acyclic Graph model, or ‘DAG’ for short. A DAG is a network without a linear chain of blocks. A directed acyclic graph means that the graph is not cyclic, or that it is impossible to start at one point in the graph and traverse the entire graph. Each edge is directed from an earlier edge to a later edge. This makes it different from a traditional blockchain. Another unique concept tied to IOTA is the “Tangle.” This new term refers to a new data structure based on the DAG. This structure doesn’t require miners and data blocks, which is another reason why IOTA is so different from traditional blockchain networks. Because of the concept of Tangle, each user has to approve two random transactions in order to create their own transaction. This system ensures that every member contributes to the network, which makes it faster and more flexible.

Impeccable Scalability

In the cryptocurrency world, the blockchain and the distributed ledger become synonyms, but they aren’t exactly the same. DAGs, however, are ledgers that operate without a blockchain. Thanks to the DAG technology, the network can operate on low processing power, which means it can be used on simple devices. IOTA uses DAG as a new way of recording transactions that relies on a network of participants (not centralized). Hence, all transactions are verified in a secure and more scalable manner. Old and new transactions are linked with an interconnected graph which in turn eliminates bulky chains. Its unique combination of properties offers the kind of scalability which has not been seen before. With eyes on the future, this userbase can grow to new heights once the Internet of Things adoption has taken place.

Why Use IOTA?

The IOTA is structured in a way that every user automatically supports the network if they want to create a transaction. The network can grow exponentially as long as there are new users coming in. The number of users on the network is constantly growing because of the significant benefits IOTA provides. Its use of DAG technology makes transactions completely free. Other benefits include fast confirmation times, easy scalability, and an unlimited number of transactions.

Secured

On top of that, IOTA offers higher security and greater decentralization than cryptocurrencies such as Bitcoin. With no real competition, IOTA is really a ‘’one of a kind project.’’ It is certainly a head start in the field of Internet of Things economics and business opportunities. In the coming years, blockchain and related technologies could reach new heights and new possibilities for financial services and systems. With IOTA on the front line of the IoT revolution, the Tangle technology should pave the way for new ideas and interconnectivity.