Cryptocurrency Iota (IOT) is a completely new phenomenon in the cryptocurrency markets. Despite this, she is confidently conquering the market and has already entered the top 10 by capitalization. The main goal of creating IOT was to provide convenience, speed and low commission within the “Internet of things”.
To understand the advantages and features of Iota, we’ll look at what the “Internet of things” is. The development of absolutely all household appliances follows the path of connecting them to the Internet. If until recently only computers and smartphones had access to the Network, now the number of types of connected devices is growing exponentially. Smartwatches, smart homes, remote control vacuum cleaners, refrigerators with the ability to remotely monitor and control. The joke about wi-fi in the iron is far from a joke. According to calculations, in the next couple of years, the number of connected devices will exceed 50-55 billion.
All this array of gadgets, of course, pushes to create a convenient global system of interaction. Data exchange, software exchange, etc. And if an exchange is possible, then financial profit from this exchange is possible. For example, you can rent an extra iron with a built-in chip for rent and receive money every time they use it. In this case, the tenant will also benefit. After all, he pays only for the moment of use. And this is just one of an infinite number of possible uses for the Internet of Things. This is a huge field for innovative ideas and startups.
However, one thing is clear now. To ensure such ideas, you need a convenient, with a minimum low commission, currency unit. In this case, the unit must have a high transaction speed.
The Iota cryptocurrency was created just to solve this problem.
History of Iota
Software development began in 2015. Developers immediately focused on the Internet for gadgets. Therefore, all technical solutions were aimed at ensuring convenient operation inside the “Internet of things”. After a year of development and testing of trial versions, we created our own efficient network. In October 2016, the platform with which the Iota coin is associated was released. In December 2016, an ICO was launched. ICO helped raise funding for the development and advertising of a new product.
After fully adjusting the system and polishing the program code, the creators of Iota decided to enter the cryptocurrency exchange. The immediate start time of the Iota story can be considered mid-2017.
Almost instantly, a new cryptocurrency began to be in demand. SatoshiPay service was one of the first to abandon bitcoin in favor of a newcomer to the cryptocurrency market. This decision was due to the convenience of using IOT for small and very small transactions, and high adaptability. IOT gives you access to more coins and allows you to split them into smaller parts to pay for micropayments.
At the moment, the creators of IOTA are actively engaged in increasing the target field for the application of their currency. Together with other companies, the development and promotion of the Internet of Things technology are underway. It also announced its own special microprocessor, which provides a high calculation speed of cryptocurrency operations and will further increase the already considerable transaction speed.
IOT working principle
The newborn cryptocurrency is based on the Tangle concept. This is essentially a distributed ledger. The creators of Iota claim that such a system is much more promising and more convenient than a blockchain-based bitcoin system.
It works like this. Instead of a blockchain, DAG is used, it is also a directed acyclic graph. DAG is a network of transactions. When a new transaction is added to the network, it requests direct approval from two older transactions. If there are intermediate sections between two payment points (X and Y), this is an indirect approval. That is, X indirectly approves and confirms Y.
In nodes, a check is made for the conflict of direct and indirect confirmations.
The more the transaction goes through direct and indirect confirmations, the more the system trusts in it. In theory, with more evidence, double spending is almost impossible. However, there is a flaw in this system. There is an assumption that having obtained legal methods of a high degree of confidence in a transaction, attackers could commit double-spending and jeopardize the entire network. Nevertheless, while this has not been possible, and IOT experts are actively working to eliminate this theoretical vulnerability.
Despite some controversial points that need to be improved, the new cryptocurrency model has obvious achievements. The main problems of most older cryptocurrencies are high commissions to miners and low transaction processing speed. There are no such problems in the new system. The model is completely self-sufficient and the iot owners themselves confirm each other’s transactions. Therefore, in the system, there is no concept of commission in principle. And this, in turn, allows you to conduct transactions in real-time.
Another problem with old cryptocurrencies is their shortage or too high cost. The same bitcoin has become almost impossible to use to pay for very small transactions.
But Iota does not have such problems. At the same time, 2.78 quadrillion coins were generated. This amount has made iota ideal for paying micro-deals.