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All credits to: Norbert Gehrke
This article appeared in the German website “finanzen.net” on December 9, 2017.
Bitcoin has been making headlines lately. It has an incredible rally behind it — the new currency reaches one all-time high after another. In the process, other crypto-currencies are taking a back seat, including the up-and-coming IOTA.
IOTA, the Berlin startup, disappears inconspicuously into the world of crypto-currencies. As early as 2014, the first IOTA tokens were in circulation. But just recently, the young company has made tremendous leaps. IOTA describes itself as the “backbone” of the Internet of Things (IoT) economy.
Since early November, the crypto-currency has risen by almost 800 percent, with much of the gains made in recent days. This fierce rally has enabled IOTA to reach a total market capitalization of nearly $ 12 billion, making it a top 5 position in the crypto-currency market.
Thanks to the idea behind IOTA, a worldwide exchange of data should be able to take place on a specially created data marketplace — independent of institutions and large companies.
Unlike Bitcoin, whose functionality is based on blockchains, IOTA works with the “Tangle”. While Bitcoin has a chain with a large number of blocks in a row, IOTA relies on many different strands to handle the transactions. This offers the opportunity to continue transactions endlessly and thus represents a decisive advantage over Bitcoin.
The idea is based on a machine-to-machine (M2M) payment, in which technical devices autonomously shift money among themselves. IOTA is therefore primarily aimed at machines, less at people.
To illustrate this system, one could use the following example: A car drives into a parking garage. Instead of having to pull a ticket, the car is detected by a sensor. The car then communicates independently with the car park and pays the parking fee.
Interest in the hitherto unknown crypto-currency IOTA is increasing rapidly. Several high-profile technology companies, including Microsoft, are now working with IOTA. This collaboration involves selling data that would otherwise be wasted.
“Currently, as much as 99 percent of this valuable data is lost,” said IOTA co-founder and CEO David Anderebo. “IOTA creates an incentive to share data through its zero-fee transactions and by ensuring data integrity on the decentralized ledger.” In addition to Microsoft, Accenture, Fujitsu and Bosch have also entered into cooperation agreements with IOTA.
IOTA currently seems unstoppable — the currency recently hit a new all-time high of $ 5.5. According to experts, it can be assumed that IOTA will continue to grow in the long term. The crypto-currency is decentralized, free and fast. Of course, she still has a long way to go to earn serious competition for Bitcoin, but IOTA still seems to be well on her way.