IOTA: Focussing on the Internet of Things
March 7, 2022

IOTA: Focussing on the Internet of Things

IOTA is a free spirit in the world of blockchain delivering an open-source distributed ledger and cryptocurrency for the use of the Internet of Things (IoT).

IOTA is a free spirit in the world of blockchain delivering an open-source distributed ledger and cryptocurrency for the use of the Internet of Things (IoT). IoT is a system, where physical objects connect and exchange data with other devices and systems over the internet (or other communicative networks). IOTA differs from many rival protocols by its unusual design notable for its data structure innovation known as “Tangle”.

IOTA aims to create seamless value and data transfer through feeless transactions, low resource demands, and immutable data through its protocol. All this is crucial in democratizing and powering these IoT systems. According to IOTA’s own words, as stated on its website, IOTA aims to “re-engineer distributed ledger technology and enable secure exchange of both value and data, without any fees.” 

The history of IOTA

Founded in 2015 by David Sønstebø, Dominik Schiener, Sergey Ivancheglo, and Serguei Popov, the protocol is named after the smallest letter of the Greek alphabet. The initial development was funded by an online public crowd sale where approximately 1300 Bitcoin was raised (worth $500 000 at the time). The IOTA network was launched in 2016. 5% of the total token supply was donated for continued development, for which the IOTA Foundation was founded. The IOTA Foundation continues to focus on working on partnerships with suitable brands and providing support to relevant parties such as entrepreneurs, developers, token holders, and other stakeholders. In addition, the IOTA Foundation is responsible for managing the project’s Ecosystem Development Fund and delivering financial support to the IOTA developing community that can be found on most social media channels.

IOTA software trivia

IOTA is the new kid in the block for its unique and alternative approach in terms of data structure known as “Tangle”. The Tangle is used to describe the protocol’s directed acyclic graph (DAG) transaction settlement and data integrity layer. The technology behind this is complex but relevant in the context of scalability, a common issue in the world of crypto, and a persistent challenge with major cryptocurrencies such as Bitcoin. Even though DAG is not unique to IOTA, the system differs from its competitors by being parallel. Parallelism enables the simultaneous processing of transactions. The protocol utilizes Proof of Work (PoW) algorithms. However, the protocol doesn’t require full node mining because each new transaction is validated by referencing the last two purchases.

Some of the benefits of IOTA include scalability, the lack of transaction fees, quick transactions, and low resources to maintain the network. The IOTA network’s versatile technology also enables the versatile transfer of things besides money, such as other data and information. Even though IOTA is not blockchain-based, it offers the perk of decentralization where no authority can control the network. 

MIOTA, the token

The protocol has its own token, MIOTA, operating as a unit of value of the IOTA network and to account for the network’s transactions. MIOTA is traded on crypto exchanges and can hence be purchased. However, MIOTA cannot be mined.    

The future of IOTA

IOTA has some big and futuristic plans; if the next industrial revolution requires societies to create and maintain machine economies, this requires handling financial relations between humans and machines. This requires a safe environment where distributed ledger technologies (DLT) are a viable solution. It is inevitable to build reliable infrastructures to enable this increasing communication as sectors such as smart cities, global trade, and communicational convenience thrive from it. The future is smart, and DLT should be part of it. Although IOTA doesn’t rely on blockchain, it is a relevant competitor to the field. Despite the projects' ups and downs, if IOTA remains relevant, up to date, and competitive, there could be perspectives for it.

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