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IOTA Could Transform The Internet Of Things

Updated: Oct 21, 2019

| B + T |


IOTA is a revolutionary digital currency and platform, created specifically for the concept of the Internet of Things. It does not resemble any other project or coin, which makes it unique and very promising. IOTA can become that transactional fuel that will ensure the implementation of smart enterprises with the participation of machines integrated into one network.


Think about the self-service checkouts at supermarkets. You must agree that these are at times more efficient, and economically more profitable, than using the cashier. Imagine further that in this supermarket you can use tablets to make your choice of goods, and that the supermarket has installed conveyor belts that would feed these products directly into your hands, or into your car. It is these solutions that underlie the Internet of Things (IoT); and IOTA’s function within it should perform a connecting role between the nodes of the entire system, covering the payment element of shopping.



WHAT IS IOTA?


IOTA is both a digital currency and a system for instant micro-payments without any commission. In this way, it is significantly different from other coins, since a transaction of 1 coin or, roughly speaking, 0.001 cents in dollar terms, is possible. What does it provide? For instance, with IOTA you can ensure the fulfillment of the smallest tasks in the unified network. And thanks to these features, IOTA can be integrated into the Internet of Things by performing transactions between points.


The project began in 2015 with the ICO. During crow adding, the IOTA team managed to collect 1,337 Bitcoins, which at that time was a very small amount. Yet ICOs were not held as frequently in 2015 as they are today, and all the new ICOs were in the shadow of Ethereum’s. Almost all ICOs held in 2016 went to beta tests, and by 2017 the innovative project got off its feet. A substantial amount of money was allocated for development, marketing, and new projects; by June, IOTA (or MIOTA) made its debut at one of the world’s largest exchanges, Bitfinex. In the fall of 2017, several strategic deals were concluded between large associations: Samsung, Fujitsu, Volkswagen, Microsoft, and Deutsche Telekom.



HOW DOES IT WORK?


IOTA does not look like Bitcoin or Ether, because it does not actually use blockchain. This platform uses a special Tangle log, based on the DAG-directed a cyclic graph. In the Bitcoin or Ethereum blockbuster, everything is kept on the blocks, where the transaction information is recorded. There are no blocks in Tangle IOTA, and transactions there are related in their own special scheme: every new transaction that has arisen (let’s call it A) confirms the two old ones (B and C). Verification can also happen indirectly, for example transaction D, which confirmed A and conditional Z. But it indirectly confirmed B and C.


Such a system forms a whole web of verification, which protects the network from double expenditure and makes it work with higher efficiency. In other words, the more transactions on the network, the faster they will be processed. Note that IOTA mining is impossible; all the coins were issued immediately. Their number is about 2.8 trillion, and to be more precise, this value is described by the value MAX_SAFE_INTEGER in JavaScript. On exchange trading, MIOTA is used, equal to 1,000,000 IOTA.



IOTA AND THE INTERNET OF THINGS


IOTA’s prospects are measured by the prospects of the sphere that this platform is designed to serve. Originally, the concept of the Internet of Things meant a global network in which physical objects interact with each other through built-in technologies. Currently, there is no fully-fledged network; but rather, there are autonomous pockets. Take for instance a smart apartment, where light, electricity and heating are automatically regulated. But after all, apartments can be united in houses, houses in cities, and cities into a whole network.


IOTA can tie together virtually all processes in the IoT ecosystem by configuring transaction chains and the ability to conduct micro-transactions in huge quantities. Problems with scalability in Tangle, unlike for blockchain, do not occur. Furthermore, the platform is applied so that the device for interaction with other nodes should not have uninterrupted access to the Internet. For some ‘machines’, it will be enough to connect once a month, or even a year depending on the functionality. This will save battery power, or even electricity.



ADVANTAGES AND DISADVANTAGES OF IOTA


IOTA as a digital currency has its advantages. The main advantages are the absence of commissions, the possibility of conducting micro-transactions, and the high speed of operations. All these advantages are provided by Tangle. From the point of view of the IOTA platform, it is still difficult to assess its future trends. Similar to Ethereum in 2015 or 2016, everyone understood its huge potential, but there was not yet a tangible example that would show Ethereum in a practical way.


The fact that the project is actively developing and cooperating with the world’s largest consortia suggests that it has prospects. The idea that it will become a driving force in such an innovative direction as the Internet of Things is a definite plus of IOTA. Suggesting that coins really have some weight behind them. After all, they must fulfill the role of ‘fuel’ in a rapidly developing sphere. But the unique IOTA platform, and the unusual proof of work without mining as such, potentially creates a situation in which a powerful transaction will disrupt network security. If it comes from a node that has collected 51% of the total capacity, then the so-called 51% attack will occur. The node will gain control over the network, which will allow it to double expenditure. This is like a Bitcoin mine with 51% of the processing power.


Security is another point that needs to be ironed out. At the forum of the IOTA project and other digital currency-exchange sites, complaints have repeatedly been received about the loss of coins from a wallet. Thus far, no normal software purse has been implemented, and this was one of the main goals of the project for 2018.


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