With a slew of new technologies like blockchains, cryptocurrencies and Internet of Things invading the market, the human race is all set to hit the next major milestone in the evolutionary history. Advancements in Artificial Intelligence and humanoid robots mean we are on the verge of entering the next era, and this major breakthrough will be triggered by the replacement of the “legacy tools” we use today.
Internet, as we know it today, will no longer be relevant in the near future. Therefore, the question that remains is not whether we need a replacement or not, but what to choose as that replacement. Amongst the various other technologies existing out there, IOTA is one of the major contenders. Not sure how? Read on to find out.
IOTA Wants to Replace the Web Itself
IOTA is a network designed to completely replace the World Wide Web. It allows for completely encrypted and secure data transmission, that is much more resistant to attacks than the current data transmissions over the web.
What’s even more interesting is how IOTA incorporates smart gadgets into the same networks as the ones used by humans. This not only makes Internet of Things a universal feature — as in, accessible to everyone alike — but also much more secure. This owes to a new security model that is not plagued by legacy technology, which is one of the major reason the current version of Internet being so vulnerable (thanks to the industry’s conservative behavior).
So what makes it different from, let’s say Bitcoin or Ethereum? I’ll present a few of the major concepts that make it completely different.
No Chains, Instead ‘The Tangle’
“The tangle” is a completely reimagined way of recording transactions or events. It is an alternative to the blockchain technology.
Broadly speaking, a blockchain is a data structure where each block consists of a header and some data. These blocks are then joined together to form an immutable chain of blocks called the blockchain. The data contained inside the blocks are “merkle trees” which hold the individual transactions.
In contrast, the tangle is a “directed acyclic graph” (DAG) which is composed of tips that are joined together. Each tip in the DAG is a transaction.
To make a transaction valid, the nodes don’t need to form a general consensus. Instead, what happens is that whenever a new transaction is issued, it confirms two of the previous transactions not necessarily directly connected to the transaction.
In this way, the more confirmations a particular tip gets, from the new tips, the more “honest” or “legitimate” it becomes. Any fake ones, although present on the tangle, just fall into oblivion. The quantity used to mark the legitimacy of a tip is called weight.
Security, but Not So Power Hungry
Since the application of this technology mainly lies in Internet of Things, it is mainly used by low power devices.
The network doesn’t rely on forming consensus, so the traditional methods of attacking a blockchain don’t work here. However, there are ways of disrupting the network and like any other cryptocurrency, the tokens used in IOTA are also prone to double spending.
IOTA tackles this problem by placing a cap (i.e. upper limit) on weight of each tip. This way, the power required to find the nonce for generating a hash doesn’t require as many steps or power, but other criteria — like the input flow of legitimate transactions to prevent even powerful attackers from gaining control of the network.
This unique approach should also future-proof the network even from now-hypothetical quantum computers, which are known to require much less steps than a traditional computer for finding the trial and error solution to a problem, like “finding the nonce”.
Sharing Is Caring
One of the most unique features of this network is that it allows for sharing of just about any smart gadget. Most of the gadgets that we possess — be it bikes, or, say a drone — remain unused for most part of the day. We could easily lease out these devices to others without worrying about safety, and earn money in the process.
Each device linked to the network will have its own ID and history, and nobody could trick you into believing that something is newer or even theirs. This eliminates theft of property.
No-Fees Allows Micro Transactions
IOTA is probably one of the few networks out that that doesn’t charge any network fees and is almost instant.
As opposed to other networks that charge small amounts of fees for processing transactions — with lower fees resulting in huge delays in confirmation — this network doesn’t charge any fees.
This is attributed to the fact that there are no miners, and hence no need to pay for the mining activity. This enables micro transactions, meaning you could spend whatever small amount you would like to.
In other networks, small transactions can cost an almost equal (or sometimes even more) amount of fees as larger ones. IOTA claims to addresses the scaling problem that most of the other major networks, like Bitcoin, sometimes face.
Do Bitcoin and Other Cryptocurrencies Still Have a Place?
But hey! What happens to Bitcoin and other cryptocurrencies of our choice? No worries. Even if IOTA replaces the Internet, these cryptocurrencies can still exist on top of it, just as they exist on top of the current version of Internet.
To conclude this article, I’d like to emphasize on the point that countries which refuse to embrace the changes brought about by revolutionary technologies like Bitcoin or Ethereum will soon suffer a lot. They’ll be left two generations behind those that do adopt it and later also shift to technologies like IOTA.
This would have a rather catastrophic effect on their economies with the rise of unified currencies, which would certainly be much more stronger than their local fiat counterparts.