The IOTA project intends to transfer data and values between people and devices connected to IoT. The project, started in 2015 by IoT experts David Sønstebø, Serguei Popov, Sergey Ivancheglo and Dominik Schiener, is managed by the IOTA Foundation.
IOTA (short for “Internet of Things Application”) has a native open source digital currency called MIOTA or simply IOTA. The IOTA cryptocurrency uses a scalable distributed ledger. It supports machine economics by enabling callous, smooth, stable and scalable microtransactions within the IoT ecosystem.
The supply of IOTA coins is limited with a market capitalization of over $ 3 billion. The creators claim the IOTA network is a layer of trust and a protocol for the Internet of Things, which makes digital transactions efficient. In addition, IOTA enables developers to develop decentralized applications on the IoT interface. Since IOTA has so much to offer, we’ll explain everything plus that IOTA forecast from the point of view of the prism.
How does IOTA work?
In contrast to conventional cryptocurrencies with blockchain technology, IOTA relies on IoT applications and uses a new tamper-proof technology called Tangle. Based on the direct acrylic graph structure, Tangle records transactions and communications invariably in parallel. The globally distributed and trustworthy network offers reliability and robustness against cyber attacks.
not how Blockchain technologyThere are no miners on the Tangle network doing transactions for free. However, a similar consensus mechanism is still used as Proof of work (PoW). The sender (or central coordinator) must validate two random transactions over the network before sending the IOTA coins. Processing becomes straightforward and faster due to a device that is used to carry out a transaction that contributes to the confirmation itself.
Transactions that go through the PoW mechanism are charged a fee for using more computing power and electricity. In addition, the higher frequency of transactions makes the PoW network slower and more expensive. Tangle solves these problems by removing miners from the equation, making the IOTA network cheaper, more flexible and allowing unlimited transactions within minutes. By integrating IoT into transactions, the machines will be better connected and the Tangle network will be expanded. All of this will encourage more people to join the IOTA system.
Advantages of IOTA
- Toll Free Transaction – With the IOTA Tangle network, users can process all transactions for free.
- Scalability – IOTA offers vastly improved scalability that becomes infinite as more people join the system.
- Less energy consumption – Eliminating miners saves a lot of energy in the process.
- Microtransactions – No transaction costs allow micro payments.
- Data and value transfer – IOTA is not limited to financial transactions, it also facilitates data exchange.
- No mining – How Senders contribute to the validation of IOTA transactions, there is no concept for mining.
- IoT adoption – The increasing introduction of IoT will lead to the acceptance of IOTA.
Disadvantages of IOTA
- No smart contracts – Although IOTA can run smart contracts, the excessive computing power it uses prevents any possibility of their verification.
- Pretty new – IOTA has only just started so very few people and organizations are interested in it.
- Scalable transaction is a mystery – Although IOTA promises to execute endless transactions quickly, its small community size creates a mystery around its potential.
How do I buy and use IOTA?
IOTA is a popular digital currency and can be bought and traded on the leading international cryptocurrency exchanges, including Binance and Bitfinex. You can buy IOTA coins as other cryptocurrencies – create an account on the trading platform, fund the account with fiat currencies like Euro or Bitcoin or Ethereum and convert them to IOTA.
When it comes to storing IOTA coins, you can go for the crypto wallet. However, the IOTA network recommends using a desktop application or mobile digital wallet such as Nostalgia Light or Trinity or a hardware digital wallet. From there, you can use IOTA coins for transaction purposes.
The future of IOTA
Trying to make one IOTA forecastThe convergence of IoT technologies with the digital payment system is a factor that needs to be considered. This means that the success of IOTA depends directly on the introduction and expansion of the IoT in the future, which seems exciting right now. It has already shown enormous potential in innovative machine-to-machine payment processing.
So far, IOTA has taken a progressive approach to partnering with companies like Bosh and Samsung and developing a protocol that is resistant to quantum attacks. It needs to improve the security functionality of the transaction framework in order to attract more users to the network. Additionally, IOTA can become an integral part of the IoT due to its ability to improve connectivity and knowledge sharing between machines.
IOTA takes the existing blockchain technology with its creative consensus mechanism Tangle in a nutshell. In addition, the decentralized payment network uses the IoT applications, which is a unique concept in Cryptoverse. While security and customization issues are manageable, IOTA is well positioned to thrive as long as the Internet of Things persists.