How did IOTA Start & Why Have They Been So Successful?
IOTA is one of the most promising projects ever seen in the cryptocurrency market. A lot of people are unaware of the details, partially owing to the deeper technicalities involved. Many of those who’ve learned about it, lack the basic understanding of innovative aspects of the project. This piece is an attempt to help our readers understand IOTA – which has gained significant popularity since its launch in July 2016.
What is IOTA?
IOTA is a digital token that is specifically designed for the internet of things (IoT) revolution. As studies indicate, the future is a network of networks, where every physical device – ranging from our homes, cars, and refrigerators, will be connected to the internet. This inter-network is often dubbed as the Internet of Things.
It is believed that by 2020, there will be 30 million IoT supportive devices on the planet – and the market is expected to cross the $300 billion mark by 2022. However, despite the growth prospects, the market still faces two unnavoidable issues hampering mass adoption. They are security and scalability.
IOTA is driven by the mission to solve these fundamental problems with the help of cryptography and DAG technology. If materialized, this will be a more reliable, and decentralized alternative to Blockchain. So, it’s going to be a cryptocurrency, but without any involvement of or reliance on Blockchain technology.
Why IOTA?
There is no doubt that bitcoin and underlying technologies (read Blockchain) have proven their worth and created a big hype across the world. However, they are still in the early growth phases and facing hindrances on technical and financial fronts. There’s a big question mark on the scalability of Blockchain solutions. The answer to “how much payments can be processed per seconds?” is still not the ideal one. As industries will start adopting internet of things, the need for more and highly-fast payment processing will increase. This is where IOTA will come to help.
How does IOTA differ from Bitcoin?
As discussed before, IOTA is a cryptocurrency, but instead of using the Blockchain technology, it uses "Tangle" – a DAG-based ledger. It is the same which offers many features you don’t usually get with Blockchain or let’s say, bitcoin.
By maintaining features from blockchain, and improving on the original DAG technology, tangle is able to be more efficient. With Tangle, the transactions are very fast and equally secure. It is also more reliable as it contains multiple confirmation mechanisms for transactions.
In DAG-based cryptocurrencies, there is no concept of blocks; instead, the transactions are confirmed by subsequent transactions (minimum two parent transactions). As a result, the structure of the network/nodes is represented by a direct graph with no directed cycles – a kind of never-ending tree. Its transaction, proof of work, and all other SOPs are quite credible, inviting investors to seriously consider supporting the technology.
Having a belief in “Anything that exists in our environment can be connected to the internet”, IOTA is eyeing massive growth and adoption of the internet of things in the days to come.
Current Status and Trading
ITOA is currently trading at $2.11 USD with the market cap of $5.86 billion USD. It gained a significant boost in November – December 2017, but dropped the value following the market concerns over the future of digital currencies. If are interested in learning about it, you may visit their website.
However, if you aspire to purchase directly with “Fiat” currency, please note that it is not possible right now. The best and the most reliable method of buying them is to purchase bitcoins, and then swap these for IOTA on a crypto-exchange.
Concluding this piece, we would suggest that you should give it a thorough study if you are interested to move into trading with IoT. You should also note that in the current state, the IOTA is not decentralized. IOTA Foundation runs a special node to protect the network unless it gets bigger and stronger against larger transactions and attacks.