IOTA is a new type of distributed network. It uses a unique approach to verifying transactions that makes it ideal for large amounts of data needed to power the IoT. It is widely considered an evolution of Bitcoin and Ethereum.
We're all familiar with the Internet of Things (IoT), devices that connect to the Internet, but what happens when you combine that with the blockchain? IOTA.
In this article, we will discuss:
The Internet of Everything
Refrigerators, drones, lights and cars are just some of the objects that connect to the internet.
Once machines connect to the Internet, they can communicate with one another. The interconnection of all these smart devices is called the Internet of Things.
IoT has been around for some time – but it is becoming more and more a reality. The implications of a broad IoT network would be enormous for the way people live their daily lives.
But there is a problem: the more devices that become 'smart', the more information is generated. Many of the world's networks weren't designed to contain as much information as all these new connected devices are about to start producing.
That's where IOTA comes in.
IOTA is a DLT project specifically designed to solve the problem of how to manage all this data.
What is IOTA?
The Internet of Things app is a cryptocurrency, like Bitcoin, but it was created to help solve some of the scalability issues found in other currencies, like Bitcoin.
Currently, blockchain-based systems like Bitcoin and Ethereum can only process a certain number of transactions.
For something like IoT to work, a network needs to be able to handle millions or even billions of transactions. That's why the team behind IOTA created The Tangle.
release the tangle
The network's distributed ledger is called Tangle. Like Bitcoin, Tangle needs to verify transactions. However, where Tangle differs from Bitcoin is that it doesn't require many people to solve a cryptographic puzzle to create a block.
Instead, for each transaction to take place, he must approve two transactions. What does that mean? There are no more dedicated miners. In fact, the more transactions that take place on the network, the faster it becomes.
The possibilities don't stop there. There are also no transaction fees, which means it can be used to process transactions of small amounts of currency. In Bitcoin and Ethereum, these microtransactions would be very expensive.
In IOTA, once up and running, it will have fast transactions, zero fees and greater security.
Is it a bit like Bitcoin?
If Bitcoin is the first step in the blockchain / DLT journey, and Ethereum is the second step – allowing developers to create Dapps and Smart Contracts – IOTA is the third generation, allowing machines to work autonomously on the network.
IOTA does not rely on computers to act as miners and uses a new type of security that makes it more future-proof.
Who invented IOTA?
A group of researchers and engineers from around the world are working on the project. Co-founders are Dominik Schiener and David Sønstebø
Does it have its own encryption token?
It is true! It's called MIOTA.
How do you buy MIOTA?
Like many other cryptocurrencies, you can buy them in purses.
The future
By allowing machines to transfer data between each other securely and scalability, the IOTA has many future use cases.
One possible direction is to help machines use the blockchain automatically. A specific concept in Europe in the developer allows smart cars to automatically pay for their own parking and electronic recharge. Humans are no longer needed for the transaction to take place.
The IOTA foundation is working with city planners and energy companies to devise ways to use this new grid to increase grid efficiency and speed.