Smart cities will offer more and more services that are charged more and more. Of course, when the urban IoT infrastructure is expanded, local businesses will also benefit. With all of this along the way, the expectation is that it will be useful for people to have access to a suitable electronic currency for small fees and minor purchases – for micro-payments. To this end, IOTA is proposed, a ledger-based technology specially designed for the IoT.
There are already several ledger systems. Best known is blockchain, the technology on which Bitcoin is based. Blockchain has some of the basic properties that are good for supporting micro-payments in an IoT environment, but it also has drawbacks that make it unsuitable for making micro-payments in IoT ecosystems.
Electronic payment systems need to get better in terms of security, personalization and convenience. IOTA was designed to provide these properties. It has three main advantages compared to other electronic payment methods: it is modular, decentralized and non-taxable.
IOTA is based on a new distributed ledger called Tangle, which overcomes the inefficiencies of current blockchain design and introduces a new method of consensus in a decentralized peer-to-peer solution. This approach makes it possible, for example, to use the technology to transfer money with no commission to pay for everything from parking fees to a car wash to a sandwich.
IOTA comes from the IOTA Foundation, which is working with STMicroelectronics to create a new level of high-performance, continuous and economical access to IoT functions. The spectrum of this collaboration is the integration of IOTA Tangle into ST’s 32-bit MCU ecosystem. The solution enables the simple integration of products and services with IOTA functionality, so that developers can easily and quickly create and prototype new IoT solutions (X-CUBE-IOTA1).
What is blockchain?
To understand the innovation of IOTA and Tangle, it’s worth checking out how a blockchain works. Blockchain is a subfamily of technologies in which the register is structured as a chain of blocks containing the transactions and the validation of which is entrusted to a consent mechanism. The main characteristics of blockchain technologies are the immutability of the register, transparency, traceability of transactions and security based on cryptographic techniques.
A blockchain consists of blocks, one after the other, that contain information about several transactions. The administration of all transactions is entrusted to the nodes, which are called to view, control and approve all transactions. In this way a network is formed with the blocks of all transactions.
Each block is also an archive for all transactions and for the entire history of each transaction, which can only be changed with the approval of the network nodes. Transactions can be considered immutable (Figure 1).
Figure 1: Structure of the blockchain. The essential elements are node, transaction, block, ledger and hash. Ledger is the public register in which all properly and sequentially executed transactions are “commented” with maximum transparency and unchangeable manner. Hash is the encryption algorithm that uniquely and securely identifies each block.
IOTA’s innovation is based on a tangle, a different approach that made it possible to scale the network in a pure IoT and blockchain ecosystem.
The idea was developed by young computer scientists in a group of hacker forums. One of the minds behind the coin designed for the IoT is Dominik Schiener. The project was funded in 2015 by David Otherwiseebo, Sergey Ivanglo, Serguei Popov and Schiener. A respectable capitalization of over $ 8 billion has been achieved in a short period of time. Cryptocurrencies are generally burdensome and complex, but this project aims for a lightweight approach that makes it suitable for any scenario that requires the use of microtransactions.
Blockchain ensures the verification of transactions on decentralized systems and a secure and autonomous system for transferring and exchanging data between machines and people. IOTA does not use a blockchain, but a data structure called “Tangle”, a kind of direct acyclic graph (DAG). A tangle doesn’t work much differently, but it makes the system scalable, faster and even more secure.
The DAG architecture assumes that the user and the validator are identical. A DAG is made up of many vertices and nodes, with each node pointing from one vertex to the other. In Figure 2 an example of a DAG diagram. In Tangle, paradoxically, the performance increases with the number of transactions created. It is important that every transaction has a positive integer for its “weight” (Figure 2).
Figure 2: DAG layout The boxes / nodes (A, B etc.) represent transactions, the number in the corner of each box represents its “weight”; The middle number is the cumulative weight
The main idea of the chart is to issue a transaction. Users need to work on approving other transactions. All users who issue a transaction contribute to network security. In order for a node to issue a valid transaction, it must resolve a cryptographic algorithm like that of the Bitcoin blockchain. It is important to note that the IOTA network is asynchronous.
IOTA uses hash-based signatures instead of ECC (Elliptic Curve) encryption. Hash-based signatures are not only much faster than ECC, they also greatly simplify the general protocol (signature and verification). IOTA uses Winternitz cryptographic signatures. IOTA’s ternary hash function is called Curl. Hash-based signatures are based on so-called “one-time signatures” (OTS). As the term suggests, a single key pair can only be used once. Otherwise, an attacker can uncover additional parts of the private key and forge signatures.
IOTA’s ternary logic uses three symbols (0, 1 and 2) and the associated hardware circuitry that implements it must be able to manage three different electrical states. However, a more convenient and interesting variant of ternary logic is that which uses the symbols 0, 1 and -1, which can be represented by a single trit (a trit corresponds to one bit in binary logic).
IOTA & IoT
As the number of connected devices and the interoperability between them grows, the number of possible uses of IOTA and Tangle will increase. This property makes the new technology particularly interesting in the complex infrastructures of Industry 4.0.
The collaboration between the IOTA Foundation and STMicroelectronics will result in a software package with which IOTA can be easily integrated into ST development boards.
“Given that specialized hardware is playing such an important role in bringing the IoT market to life, it is exciting to work with partners like ST to strengthen the IoT’s role as an innovation broker,” said Holger Köther, Director of the partner management of the IOTA Foundation.
The X-CUBE-IOTA1 extension software package runs on STM32 and contains middleware for activating IOTA functions. The expansion facilitates the portability of various STM32mic controllers. The software comes with examples of implementations for using the IOTA middleware on a NUCLEO-F429ZI or NUCLEO-F746ZG development board (Figure 3).
Figure 3: A function diagram for X-CUBE-IOTA1
“By activating IOTA functions via the X-CUBE-IOTA1 extension software for the STM32Cube software technology, developers can now easily integrate IOTA functions and functions into their IoT devices and create valuable applications using the STM32 Open Development Environment.” said Alessandro Cremonesi, VP System Research and Application at STMicroelectronics.
In addition to STMicroelectronics, Bosch has entered into a partnership with IOTA to integrate its new data acquisition device for the IoT into the IOTA Data Marketplace. Bosch will use a number of open source software protocols to connect its Bosch XDK development kit to IOTA.
The potential of IOTA technology has also been harnessed by large technology companies such as Microsoft and Cisco. Some companies, local governments, and universities have already begun exploring the possibility of using the Tangle network for services like voting, applying for certificates, and more. The small municipality of Haarlem (Netherlands) is the first government organization to launch an IOTA-based solution for managing legal documents.
The IOTA Foundation recently signed a cooperation agreement with the International Transportation Innovation Center (ITIC) to create test systems (test beds) for the world of “intelligent mobility”, also known as intelligent mobility. The aim of ITIC is to create a testbed network with which sustainable mobility services based on artificial intelligence (AI), physical (real) test methods or based on virtual and augmented reality can be incubated and validated.
IOTA’s Tangle architecture could be used as an infrastructure for exchanging messages and data captured by the sensors. Sensors of this type could also be installed in private homes in the future. In this case, the owners of the buildings would become service providers for the structures dealing with environmental monitoring.
IOTA was essentially created to ensure that transitions could take place without commission. Only in this way can the Internet of Things also enable new transactional developments.