The Internet of Things (IoT) is one of the most promising new changes to the technological world in years. But what this technology lacked was a secure backbone to ensure micro-transactions between machines could be handled properly. This is exactly the problem that the founders of IOTA (MIOTA) coin intend to solve by combining two of the most promising technologies – distributed ledgers and IoT.
So what is IOTA (MIOTA) exactly?
At its most basic level, IoT is a provider of communication between various machines connected to the internet without the need for human intervention. One significant issue is that this technology falters at the smaller transaction level, with what is generally referred to as micro-transactions. To fix these issues, the founders of IOTA (MIOTA) introduced distributed ledger technology into IoT to take care of micro-transactions without any delay.
IOTA (MIOTA) is a form of cryptocurrency coin, but differs significantly from other cryptocurrencies because it does not use dedicated blockchain technology. This is mainly because the inefficiencies of blockchain render it unable to scale as needed, which led to sluggish transaction times and high transaction fees. This is where the IOTA foundation’s revolutionary “Tangle” technology comes into the picture.
Where blockchain is essentially sequentially stored blocks, IOTA (MIOTA)’s distributed ledger is made up of streams of individual transactions entangled together. This uses the concept of “Directed Acyclic Graphs” or DAGs, with the vertices representing transactions and edges representing approvals. Every new transaction comes up as a vertex in the DAG and is attached to two other transactions, which it is said to approve. This, in turn, helps to keep double spending and illegitimate tokens at bay.
The first vertex or transaction in the Tangle is referred to as the “genesis,” which contains all the IOTA tokens that were ever created. The genesis is also always approved via all incoming transactions, either directly or indirectly. For a transaction to be a part of the consensus it must be approved by a large number of new transactions, which makes it practically impossible to alter after the fact. This is achieved by making each transaction perform a small proof-of-work computation to make it expensive to spam or fork the Tangle after consensus is established.
Tangle follows a different approach than blockchain to validate and keep the heaviest branch going. This is done by randomly creating two paths from the genesis node to the current tip of the graph. This “walk” towards the transactions that have more approvals is then considered the heaviest, or most legitimate, branch. This leads to the smaller branches shrinking further, in the sense that no upcoming vertices will approve them. The net result is a consensus which overcomes the blockchain throughput limit.
Advantages of using IOTA
There are a lot of advantages to IOTA that could potentially change the way the cryptocurrencies are seen in the world as we slowly move into a new era of machine-to-machine communication.
– Focus on IoT:
IoT is an extremely promising technology right now, and with an expected value of 100 billion USD by the year 2020, IOTA could not have launched at a better time. This focus on an important new technology has helped IOTA to be at the forefront of all things IoT.
– No transaction fees
Each user is in charge of validating two transactions via proof-of-work so that their own transaction can be approved. This eliminates the need for miners, whose sole purpose was to approve legitimate transactions in a blockchain.
– Higher scalability
One of the most unique aspects of IOTA’s usage of Tangle is that it can scale infinitely to accommodate as many users as needed, as opposed to blockchain-based cryptocurrencies where the increase in a number of users is the major contributor to slower transaction times.
– Offline transactions
Keeping in mind that not everyone has round-the-clock access to the internet everywhere, Tangle has a provision in the IOTA network to facilitate transactions even when the user is not online. The information is transmitted to the Tangle platform by the nodes once a user comes back online. This will allow people in rural or remote areas of the world to be a part of the network even if they lack a reliable internet connection.
Why should you pay attention to IOTA?
IOTA came about as part of a desire to innovate and fix the flaws of scalability in blockchain and other research. It has also kept an eye on the distant future – a world where the IoT plays a major role in everyday life. IOTA was created to facilitate this future with its Tangle technology and a guarantee of zero transaction fees.
IOTA (MIOTA) also serves as an indicator of what the next few years could bring to the table for the cryptocurrency market in terms of the number of users and machines involved. The foundation’s members believe in working with humility and silence to create a technology that will speak for itself, without the aid of a big PR campaign.
IOTA (MIOTA) in the future
There are plenty of applications where IOTA could work wonders:
– In global supply chains, its Tangle technology would be ideal in terms of scalability to support the millions of daily transactions that make up global trade.
– In healthcare, IOTA’s scalability and feeless structure make it an ideal platform to ensure the integrity of patient data.
– IOTA has also found applications in smart energy and autonomous vehicles, both of which are just a glimpse into the future of what this technology could achieve.
IOTA is one of the most interesting cryptocurrencies right now, with a genius team and technology backing it up. Although there are some flaws that still need to be overcome in its technology (MIT and Boston University found some glitches in its curl hashing function), IOTA seems like the right way to go where the Internet of Things is concerned. Collaborations with large companies have provided a positive boost to IOTA (MIOTA)’s reach its journey to becoming a dominant worldwide cryptocurrency, and it will certainly be interesting to follow its progress and get involved.