Introduction To IOTA Cryptocurrency
IOTA takes a whole new approach to cryptocurrency by throwing away the blockchain in favour of what they call The Tangle. IOTA has had the whole crypto community buzzing and wondering if it could be the next evolution of the blockchain. And while technology changes fast, IOTA is quite intriguing from a crypto investment point of view. In the past months, the price of IOTA has gone from 70 cents to over $5 (and now back down to $2) per coin.
IOTA aims to establish itself as the fuel of efficient machine-to-machine transactions.
What is IOTA?
IOTA stands for Internet of Things Application. It is an open-source, decentralised ledger protocol, that, unlike the current blockchain technology uses its core invention of the Tangle. You can simply refer to it as the Blockchain without Blocks and Chains. This cryptocurrency addresses scalability and transaction fee issues of the blockchain technology by getting rid of the block and chain. For you to submit a new transaction to the ledger, you need to verify two previous transactions randomly. This type of verification is what the creators of IOTA call the tangle.
The tangle is the main innovation behind IOTA. It is a quantum-proof DAG (directed acyclic graph) that does not charge any fees on transactions, nor does it have a fixed limit on the number of transactions that can be confirmed every second. As the devices on the IOTA network verify each other’s transaction, they build unanimity through the web of networks between transactions. Since the computing power grows as the network grows, IOTA promises free, fast transactions.
The Tangle is also designed to process payments between machines and micro-payments, facilitating a whole machine-to-machine micro-economy.
Advantages of the Tangle System in IOTA
There are various advantages to this system over blockchain cryptocurrencies.
- Transaction Costs
First, the Tangle enables 0 transaction fee without having to worry about network congestion. In the traditional blockchain, multiple transactions are stored in each block before miners verify them. In the Tangle, every operation forms a new block and is in essence verified by itself. For you to successfully carry out a transaction, you need to authenticate two random transactions in the Tangle network. Also, it is free since there are no miners who need to be paid. The senders do the work that is originally assigned to miners by verifying two transactions themselves.
Since each transaction authenticates two new transactions, its scalability increases with adoption. Hence, this network could become indeterminately scalable the moment more users send transactions.
- Offline Transactions
The beauty of the Tangle is that you can easily disconnect and reconnect and back into the network. The IOTA does not demand that users are always connected since you can secure data and make transactions even without an internet connection. IOTA makes it possible for a cluster of devices to branch off and still carry on with the transactions and secure data in an offline environment through the use of different communication protocols like ZigBee, Bluetooth and other P2P protocols.
Quantum Computing Safe
IOTA is also Quantum Proof. It uses hash-based signatures that are much faster than the Elliptic Curve Cryptography. The hash-based signatures also simplify the signing and verification process and reduce the overall complexity of the Tangle Protocol.
The IOTA Team and Foundation
The IOTA Foundation was formed in Berlin Germany. The main creators include David Sønstebø (founder), Dominik Schiener, Sergey Ivancheglo, and Sergei Popov. The remaining members of the foundation consist of highly motivated individuals that assist in the ongoing promotion and development of the IOTA projects. While there have not been any official announcements about partnerships, it is rumoured that the IOTA platform is being explored by many significant corporations including Microsoft, Bosch, Cisco, Ubuntu, SAP, Innogy, UBS and one of the largest automotive manufacturers.
Is IOTA the Future of the Internet of Things?
As the Internet of Things starts manifesting itself in our daily lives, there is a need for Smart Decentralization. IOTA facilitates transactions between devices on the Internet of Things (IoT). IOTA was created was to enable and become the backbone of the Machine Economy. The creators envisioned a platform where machines can trade resources and services without having any human interactions – purely Machine-to-Machine.
While IOTA is still in its infancy, it is a revolutionary technology that has the potential to solve the present scaling issues of Bitcoin and Ethereum. It also has a real use, which is sufficient to drive the currency for no less than 5 years. This makes it one of the best
cryptocurrencies to invest in long-term.
CaliCrypto last edited by
Is it really possible to process offline transactions through online requests or are the offline transactions something completely isolated from online processing. Anyone invested in this technology yet?
@calicrypto From the Internet:
Offline transactions are temporary, otherwise they would never be part of the main Tangle. You need a node that has at some point downloaded a history of transactions as your starting point. Then it can go offline and add any transactions you want. At some point, that offline node must come online and broadcast them to the rest of the Tangle, adding transactions on top of it to "bury" it in the main Tangle.