IOTA: the cryptocurrency for the Internet of Things

All credits to: Stefano Cavalli  – Original post: https://goo.gl/kqvT8w

 

IOTA is a cryptocurrency born in 2015 which today boasts almost 9 billion capitalization. It is a cryptographic and ” revolutionary ” token , as claimed by David Sønstebø , creator of the cryptocurrency that should solve the problems of the blockchain thanks to the Tangle , the heart of IOTA. As the name clearly suggests, IOTA is destined to the world of the Internet of Things , which is why the objective of the currency is to be used for micro transactions between smart devices. IOTA also wants to become  a real transport layer protocol stack for the IoT peer-to-peer networks, both for payments and for data exchange.

Iota

Transaction fees? They do not exist anymore.

One of the great strengths of IOTA concerns the absence of fees (transaction fees). When you want to make a transaction, in fact, the sender will simply have to check two previous transactions in the Tangle in addition to the transaction.

There are no  transaction costs therefore, as this work of Proof of Work (PoW) will be sufficient both for the verification of the transaction and for other transactions in the Tangle. This means that even micro-payments can be made without problems, as the increase in transactions and users of the Tangle increases the Proof of Work performed by the users themselves for the verification of transactions, therefore without resorting to miners.

Decentralized: no more miners and limited coins.

As previously explained, the figure of the miner is removed, as all the coins have already been released and no additional system is required to perform the PoW. In total, the available tokens are  2,779,530,283,277,761 , unlike the Bitcoins which boasts 21 million coins, of which, to date, only 17 million have been mined.

IOTA

Tokens are also characterized by the measurement unit of the international system.

The “true” decentralization takes place with IOTA, since miners are no longer present, there is no longer any risk of confinement in the hands of a few entities of the mining power to perform the PoW.

Scalability and speed.

The great advantage of the Tangle and therefore of IOTA, concerns the scalability . The operation of the Tangle in fact, allows to obtain a high number of transactions thanks to the parallel validation and without these being in any way limited in a time interval.

Unlike the classic blockchain moreover, more users adopt this system, the more it increases the ability to confirm transactions and therefore the transfers happen in an even more rapid, being the times of executions inversely proportional with respect to the number of transitions in the Tangle.

  • Bitcoin – 3/4 transactions per second.
  • Ethereum – 20 transactions per second.
  • PayPal – 193 transactions per second.
  • Iota – 500-800 transactions per second, infinitely scalable.

 

The Tangle of IOTA.

As already mentioned, the Tangle works in this way: when a transaction occurs, the node in question chooses two other transactions to be approved and, if this happens without conflict, the transaction is written in the Tangle without problems.
There are several advantages: the main one is absolute decentralization, so the Tangle can be considered a true antagonist to the blockchain. Moreover, the nodes connected to the wallets of Iota owners can work together even without being connected to the “main Tangle”, to which they will later synchronize.

Quantum computing can not do damage.

The Bitcoin system could be paralyzed by an attack by quantum computers , which are still not present on the market, but to which several companies and numerous government agencies are working.
Tangle does not have the same problem because it is based on the exclusively quantum resistant cryptographic algorithms. This algorithm allows to reduce the impact of an attack by quantum computers.

For further information, future developments and projects that the IOTA Foundation has planned, I refer you to the official site where there is also the whitepaper freely available.

 




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