What is IOTA?
IOTA (Internet of Things) is trying to become the main technology behind the future of the internet of things. The vision the IOTA team had for the project was to aim to have IOTA as the backbone for the internet of things. Face it, we may see our microwave, toaster, and pressure cookers connected to the internet some day (refrigerators are already there).
The internet of things is the interconnection via the internet of computing devices embedded in everyday objects, enabling them to send and receive data. What is interesting about IOTA is the fact that is very different from other cryptocurrency like Bitcoin. It is NOT based on blockchain technology, but rather a network called Tangle.
The IOTA Foundation was established in Germany as a formal, non-profit organization in 2017 by Dominik Schiener and David Sønstebø. The goal was to help shape the future economy of interconnected and autonomous devices using IOTA and Tangle architecture. To help fund this new technology’s development, the IOTA Founders organized a crowd sale in 2015.
What is Tangle?
To be honest, the tangle network looks and sounds far more superior to the blockchain network. I view tangle as blockchain’s bigger, stronger, smarter, and faster brother or sister. Tangle is an open source distributed ledger that has no fees regardless of the transaction size, fast confirmation times, limitless amount of transactions that the system can handle simultaneously, and the system is easily scalable.
Instead of using “blocks” like on blockchain, Tangle uses a directed acyclic graph (DAG) for short. The DAG is commonly referred to as the “tangle” and is a generalization of the block chain protocol. All technical jargon aside, tangle is designed to make the network faster and more secure with the more people who are on it and using it. It is similar to blockchain in the fact that there’s no separation between the users and validators.
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Let’s hit the pros and cons of this interesting cryptocurrency.
- New, exciting, and different network “tangle”. Tangle relieves the network of “blocks” which rids of mining and decreases the chance of centralization to take place. Bitcoin has already experienced this sort of centralization with a big concentration of mining in China.
- No transaction fees! This can lead to offering micro transactions in the crypto space. As of now, micro transactions on “blockchain” would be far too expensive to implement.
- Scalability with the tangle network. Since IOTA has no blocks, there is no issue with scalability when you have more transactions on the network. It is almost the complete opposite because the more transactions and users, the faster it gets. This works because for a user to send out a new transaction, the user must also validate 2 other random transactions. IOTA is more capable of having a global reach as opposed to other cryptocurrencies with scalability issues.
- Quantum computer resistant. Currently, quantum computers are only a theory and only a few prototypes have been made which is good news. Quantum computers are an enormous risk with all other cryptocurrencies. Actually, that risk applies to all computer systems in the world. Fear not, as IOTA has an integrated quantum resistant algorithm called, “Winternitz hash-based cryptography” (courtesy of Wikipedia).
- Currently has a centralized “coordinator” which confirms all validated transactions. The coordinator is meant to be removed once the network has more users on it. Some people see this sign as a centralized aspect, but IOTA could perform without the coordinator. The team just wouldn’t feel satisfied because the current small state of the network.
- No guarantee that the hardware of the internet of things future is going to incorporate IOTA’s digital infrastructure network. This is because the hardware is manufactured by third-party companies and I believe this network is a bit too far ahead into the future. The team’s response is as the industry grows, the demand for the technology will increase and it will just become another component in the tech stack and hardware manufacturers will adopt it. Critics argue that you can’t be so sure that an industry will adopt this technology especially because the industry barely exists. Just think back in 2009 when bitcoin was first created. You could consider that, at the time, was far too advanced considering that invention was laughable and didn’t actually “take off” until years later.
- Currently IOTA hasn’t nearly been tested and tried as bitcoin has. Bitcoin may be expensive with scalability issues, it is the most tried and tested currency of all. Countless people have tried attacking and hacking the network with no luck over the course of many years and IOTA hasn’t been tested this way yet.
Where to buy IOTA?
You can buy IOTA on Binance which is currently one of the only exchanges it is listed on. I recommend that exchange because I personally use them. If you need additional help with this, check out my guide on how to buy ALT coins.
*NOTE* If you are looking for a cryptocurrency exchange providing the best crypto-to-crypto rates on the market, check out Changelly. Unlike Coinbase, they provide incredibly low fees and a robust trading platform. Note that exchange times may vary depending on network congestion.
Overall, IOTA seems very interesting. On paper, it looks absolutely phenomenal and seems like it could solve many problems that blockchain has today. That being said, it has no proven track record yet such as blockchain. Right now, the blockchain technology and cryptocurrencies like Bitcoin do have a solid track record and have been proven to be secure. As more and more users come on board, hopefully IOTA’s Tangle will be tried and tested in the near future and prove that it will be a good project.