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IOTA is an open-source distributed ledger designed to facilitate the transfer of value and data between humans and machines, specifically for the Internet of Everything. It features fee-free transactions, tamper-proof data, and low resource requirements, making it very well-suited for powering the Internet of Things without the need for significant infrastructure investment.
Key Takeaways
IOTA is a distributed ledger protocol specifically designed for the Internet of Things (IoT) ecosystem.
It uses a new consensus mechanism called the Tangle, which is based on a Directed Acyclic Graph (DAG) architecture, as opposed to the traditional blockchain structure.
The Tangle allows for faster and more efficient transactions, as well as the ability to handle high throughput, making it suitable for IoT applications.
The IOTA token acts as a means of exchange on the network, and it has no transaction fees.
The IOTA foundation is a non-profit that oversees the development of the IOTA protocol and ecosystem.
IOTA aims to be a key player in the upcoming industrial revolution, which will involve the development and management of machine economies and financial interactions between machines and humans. MIOTA is the cryptocurrency powering this new digital economy.
How does the platform work?
The network utilizes a unique data structure called Tangle, which differs from the blockchain-based structure used by other cryptos. Tangle stores and manages numeric data in a unique way and allows the IOTA network to overcome the scalability issues Bitcoin faces by eliminating the limitations and challenges that associate with traditional blockchain tech.
Like XRP, IOTA’s tokens are pre-mined and transactions are validated using Tangle, a Decentralized Acyclic Graph (DAG) which is a new mathematical concept that holds exciting potential when developers apply it to blockchain technology. Other blockchains may also consider DAGs, but they do not use the same parallel system as IOTA.
IOTA’s Tangle network transactions can be processed simultaneously, unlike other blockchains where transactions have to follow a sequential order and unconfirmed transactions are stored in a queue. Also, IOTA works in such a way that as Tangle gets more nodes, the network becomes more efficient and secure.
IOTA system’s design makes it more cost-effective, efficient and power-efficient than traditional blockchain-based systems because Tangle doesn’t require full node miners.
IOTA Development
Sergey Ivancheglo, Serguei Popov, David Sønstebø and Dominik Schiener co-founded IOTA. The project was first announced in October 2015 through a post on an online bitcoin forum, announcing a token sale. The origins of the coin trace back to the Jinn project, which aimed to develop low-cost and energy-efficient ternary hardware, specifically general-purpose processors, for use in the Internet of Things ecosystem. In September 2014, Jinn held a crowd sale for its tokens, selling around 100,000 tokens. It amounted to a total of $250,000.
Jinn tokens saw controversy as they marketed themselves as profit-sharing tokens, which could be considered as security tokens. At the time, Initial Coin Offerings (ICOs) were gaining popularity and the regulatory status was unclear. In 2015, the Jinn project rebranded to IOTA and held another token sale. This time they marketed them as utility tokens. Holders of Jinn tokens were able to exchange them at an equivalent value in the new system. According to David Sønstebø, the new currency “spawned” from the Jinn project. He stated that “it only makes sense first to introduce IOTA and then Jinn afterward.”
The initial transaction was an address with a balance that contained all MIOTA, its cryptocurrency, that will ever be created. However, there is no available online record of this transaction. These tokens then distributed to other “founder” addresses. The total number of MIOTA planned to be in existence is 27 quadrillion. According to IOTA’s founders, this total number fits “nicely” with the maximum integer value in JavaScript, a programming language. Within three months of its launch on the cryptocurrency market, MIOTA reached a peak valuation of $14.5 billion during the 2016-2017 bull market. However, its value later decreased along with most other cryptocurrencies.
IOTA Foundation
The IOTA Foundation is part of the International Association for Trusted Blockchain Applications (INATBA). It was one of the founding members of both the Trusted IoT Alliance and Mobility Open Blockchain Initiative (MOBI). It works to promote innovation relating to blockchain technologies in order to contribute to a better, more secure digital world.
The Foundation advocates for the use of its technology in various sectors and industries: healthcare, energy, automotive, logistics and more. It also provides support to businesses and developers who wish to integrate the token into their own projects or services. By doing so, it hopes to help build a strong ecosystem
FAQ
Frequently asked questions.
Who are the founders of IOTA?
The platform is co-founded by David Sonstebo, Dominik Schiener, Dr. Serguei Popov, and Serge Ivancheglo in 2015. Its primary goal is to democratize and provide a power source for the Internet of Things (IoT).
How does the network secure itself?
IOTA utilizes a consensus mechanism, despite not being a blockchain, to ensure network security through the implementation of a simple Proof-of-Work puzzle in the transaction validation process. However, the project has faced criticism in the past for alleged vulnerabilities found in its code.
What makes IOTA unique?
From sustainable energy consumption in order to save energy, all the way to a digital identity data marketplace, IOTA’s potential applications are endless. The IOTA ecosystem and its distributed ledger technology where users store transactions shapes a significant part of our future.
The network uses Tangle, which is a directed acyclic graph (DAG) instead of a traditional blockchain. Tangle’s technical name is Directed Acyclic Graph, which aims retaining security of the blockchain while eliminating the need for blocks – a “blockchainless blockchain”. What?!
The process of validating new transactions on the network is unique. It involves approving two previous transactions from another node. This design feature means that the network’s size and speed will increase as more people use the platform. Additionally, the foundation behind the project emphasizes that it operates on a non-profit basis, with the goal of promoting the success of the network. Finally, the project has established partnerships with notable companies such as Volkswagen and has worked with the city of Taipei on smart city projects, which sets it apart from other cryptocurrency projects.
Where do I buy IOTA?
To buy IOTA tokens, refer to the exchanges that support its trading: Binance, BitFinex and KuCoin. Market cap and circulating supply are what determine IOTA price.