IOTA has the potential to become the transactional fuel that will ensure the implementation of smart enterprises in collaboration with machines integrated into one network.
In this review, we will discuss how IOTA plans to use blockchain to manage your smart devices today.
What is IOTA?
IOTA is a blockchain-based solution for smart device management. As the internet of things (IoT) keeps expanding, there is more demand for interoperability and sharing of resources. IOTA enables companies to explore new B2B models by turning technological resources into a potential service which users can trade in an open market, in real time, and at no cost.
The Tangle ledger is the main platform behind IOTA. This scalable, decentralised, modular ledger can manage to adapt anything with a chip such as smart cars or Wi-Fi bandwidth. In simple terms, you can use IOTA to lease the computing power of your smart devices to different people in real-time.
History of IOTA
David Sonstebo is the founder of the IOTA Foundation. Other key members of the team include Dominik Schiener, Serguei Popov, Sergey Ivancheglo, Gianluigi Popov, and Per Lind.
IOTA came into existence in 2015 with the ICO. The IOTA team managed to raise 1,337 Bitcoins during crowdfunding. At the time, this was a small amount, and ICOs were not as frequent then as they are today. Most 2016 ICOs went to beta tests, and it’s only in 2017 that these innovative projects began to gain traction.
A big chunk of the IOTA ICO funds was dedicated to development, marketing, and new projects. By June, IOTA – then known as MIOTA – debuted at Bitfinex exchange. In the autumn of 2017, strategic deals between large consortiums were agreed. These consortiums include Samsung, Fujitsu, Volkswagen, Microsoft, and Deutsche Telekom.
How it Works
What is the Tangle?
The Tangle is a data structure – a Directed Acyclic Graph (DAG). If there aren’t enough unverified transactions (tips) to approve, an IOTA transaction can go through approving only on a previous transaction. Each transaction must verify at least two previous transactions on the network. This way, verification of transactions takes place in a distributed manner, though each user has to do some verification work. So as the network scales, it’s much faster as there’re more “tips” available to verify, and more transactions looking for “tips” to verify.
IOTA and the Internet of Things
IOTA’s future is measured by the possibilities of the sphere that the platform is designed to serve. Originally, the concept of the Internet of Things meant a global network where physical objects interact with each other through built-in technologies.
For instance, take a smart apartment which regulates electricity and heating automatically. You can unite all apartments into houses, houses into cities, and cities into one network. IOTA can combine all processes in the IoT ecosystem by configuring transaction chains and the capacity to manage micro-transactions in large quantities.
The difficulty with scalability in Tangle, unlike in blockchain, does not occur. Besides, the platform functions such that the device interacting with other nodes has uninterrupted access to the internet. Some machines can connect once a month, or even a year, saving battery power and electricity.
Advantages of IOTA
Tangle provides three main advantages:
- The possibility of conducting micro-transactions
- The absence of commissions and
- The high speed of operations.
- The IOTA platform and unusual proof of work without mining has the potential to create a disruptive powerful transaction
- If a node collects 51% of the total capacity, the so-called 51% attack will occur
- Since a normal wallet is yet to be implemented, there have been complaints on the IOTA forums about the loss of coins from a wallet. This is one of the main goals of the project for 2018.
How to Buy IOTA
Not all exchanges trade in IOTA as most exchanges only trade in BTC or ETH. Thus you may need to use multiple exchanges to get some IOTA. Here are some of the exchanges that trade in IOTA:
- Bitfinex (BTC, ETH, and USD)
- Binance (BTC and ETH)
- CoinSpot (AUD)
- Bit520 (CNY)
As at May 2018, the current price of IOTA is $2.38 USD per token. Different jurisdictions have different requirements on where and how to buy the token. You cannot buy IOTA on Coinbase and if you’re in Canada, the process of buying this token may be longer. To hold IOTA for cold storage, you will need to download NodeJS, the Electron Framework, and Web Package Manager.
IOTA is an innovative ambitious and fascinating project. Its success will herald a new age of cryptocurrencies that could lower the price of Bitcoin or even render it useless. IOTA’s unique Tangle ledger can also transform the IoT ecosystem as we currently know it. The ledger promises to be adaptable, centralized, and scalable for various applications. The lack of fees make functions such as microtransactions more accessible.
IOTA’s main goal is help users manage, optimize and utilize the IoT, including everyday usage of smart devices. You can lease or sell the computing power of a smart device from any part of the world. From smart homes to smart vehicles, we will need a solution to manage the current and future smart technology. IOTA has the potential to offer such a solution.