Quick Facts

Approximate Market Cap$2,357,298,638
Year Established2016
FounderSergey Ivancheglo, Serguei Popov, David Sønstebø, Dominik Schiener
Symbol/AbbreviationMIOTA
UtilityAsset

The rise and acceptance of Bitcoin proved the practical application of blockchain technology. This technology, though, has a number of drawbacks that prevent it from being used as a universal cryptocurrency ecosystem. The concept of a transaction charge for all operations, regardless of amount, is a big drawback.

In the rapidly expanding IoT industry, micropayments are becoming increasingly crucial. Paying a fee that is higher than the amount of value transferred, on the other hand, is irrational.

IOTA aspires to be the industry standard for executing device transactions.

What is IOTA – Definition

IOTA is a coin based on a distributed ledger that was created for the Internet of Things (IoT). It uses a directed acyclic graph to record activities on its ledger. The idea emerged from the prospect of increased scalability on blockchain-based public blockchains.

The protocol’s main currency is likewise called iota. One iota is the lowest unit of money that may be purchased. It is far more usual to see MIOTA mentioned as the unit of currency when acquiring iotas. One Miota equals one million Iotas. To make the figures reasonable, the Miota is chosen as the unit of exchange.

IOTA does not require miners to validate transactions. Nodes must affirm two previous transactions prior to issuing a new transaction on the network. As a result, transfers may be completed for free, boosting microtransactions.

To achieve consensus, the IOTA Foundation currently maintains a coordinator node on the system. Because the coordinator is a single point of failure, the system is now centralized.

Pros and Cons

Pros

  • No fees
  • Scalable 
  • Innovative technology

Cons

  • Centralized
  • No smart contracts
  • Vulnerable

The History

The IOTA value transfer protocol, named after the smallest letter in the Greek alphabet, was created in 2015. The initial design was backed via a public online crowd sale.

Participants acquired the IOTA value token with other digital currencies. A total of 1300 BTC were raised, which equated to around 500,000 USD at the time. The initial investors received a proportionate share of the token supply.

The IOTA network became active in 2016.

In 2017, the first IOTA token investors contributed 5% of the total token supply to create what became the IOTA Foundation. In 2018, the IOTA Foundation was formed in Berlin. Its goal was to assist IOTA with technological breakthroughs, training, and standards.

How IOTA Works

IOTA may be viewed as a complex blockchain. Tangle, a network of nodes that validates transactions, is its distinguishing technology. On a decentralized architecture, the technology enables the exchange of information and value. It permits direct and secure network transactions that are immutably recorded on the network. The fundamental layer, the Tangle, allows feeless micropayment transfers between devices.

The Tangle is a directed acyclic graph (DAG). It has the ability to confirm very small transactions far better than average blockchain technology. Transfers on IOTA do not have to wait for inclusion in newly generated blocks since there are no miners. They also do not have to pay any fees to be approved by the network. These variables contribute to the scalability characteristics of IOTA. 

Advantages & Disadvantages

Advantages

Transaction fees

Transfer rates for blockchain are in the double digits. This is regarded as relatively low for many current applications. IOTA has a mechanism in which transaction rates grow exponentially when more consumers begin to use its native platform.

Micropayments

One of the most notable features of IOTA is its capacity to enable smaller payments with very little cost to a fee-free transaction.

Scalability

IOTA employs a processing mechanism that may get quicker as the number of transactions and users grows.

Disadvantages

No Smart Contracts

One disadvantage of IOTA/Tangle is that smart contracts still do not exist.

Decentralization

Decentralization is at the heart of blockchain technology.  As a result, the centralization aspect is another disadvantage.

IOTA in the Global Crypto Market

The overall amount of mIOTAs expected to exist is 27 quadrillion. The overall amount of mIOTAs corresponds to the maximum allowed binary number in JavaScript. During 2016-2017, mIOTA hit a high worth of $14.5 billion within three months after its launch on cryptocurrency exchanges. But, its value collapsed, as did that of the majority of other cryptocurrencies.

IOTA has a wide range of possible uses. In the future, many implementations of the IOTA protocol would function in the shadow of a system, unnoticed by end-users. IOTA will serve as the enabling infrastructure for a variety of different applications. Smart cities, digital identities, automation, and data markets are some examples.

FAQ

Is it possible to censor IOTA transactions?

Individual transactions cannot be censored with IOTA.

What is Access in IOTA?

IOTA Access leverages Tangle’s ability to provide the user’s detailed control over a specific smart network interface.

What Is IOTA Identity?

IOTA Identity provides a safe and verified signature to any online business. It can also be viewed as a regulatory control point for any networked entities subject to regulatory oversight.