To think that in the future a cryptocurrency like Iota (IOT) could replace the current payment systems for small transactions could be utopia, but what is actually true?
Iota is the acronym of the Internet of Things Application and is a new cryptographic technology that facilitates transactions between devices on the Internet of Things (IoT). The company tackles transaction costs and scalability problems of blockchain technologies by eliminating the block and the chain.
How does Iota work?
To send a transaction to the Iota registry, you need to verify two other previous transactions. This type of verification is known as Directed Acyclic Graph (DAG), but the creators call it “Tangle”.
There is no central ledger on Iota, and miners are not needed to feed the network. The power of computing in the “tangle” (ie a direct acyclic graph for storing transactions) increases as the network grows, but the company promises free and fast transactions. It is also designed to process micro-payments and payments between machines, facilitating an entire micro-economy.
M2M (VS machines)
Iota’s vision is to be the main platform for machine-to-machine (M2M) transactions. The company’s founders started the business after working in the IoT industry and argue that in order for the IoT to be more useful, the devices on the network need to share and allocate resources efficiently.
This means that devices need to be able to buy more electricity, bandwidth or data when they need it and sell those resources when their use is no longer required.
This means potentially dozens of transactions per second while the devices communicate and use the resources. With so many transactions, Iota’s founders believe that blockchain technology is not adequate for IoT applications, and that’s why this company aims to solve both scalability and pricing with its new network so that billions of devices can use it.
Investing on Iota
Each contributes to the computing power of the network when sending a transaction. The cost of using the network is equal to that of the electricity required to verify two other transactions.
The absence of taxes is essential for Iota’s mission to serve IoT devices. These often make very fast transactions with high frequency, and any fees charged on such small transactions would make micropayments unattainable.
So to continue believing in an M2M economy, Iota must be free of any fees and investors continue to believe in the project.
Where to negotiate Iota
Iota can be found on: Bitfinex and Binance, which represent the overwhelming majority of the trade volume of this cryptocurrency, recording respectively 44% and 13% in the last 24 hours to date 08 March 2018.
Numerous cryptographic technology experts have questioned the profitability of the Iota platform. The technology behind this company has not been tested enough to know how it will work on a large scale and how it will stand up to attacks.
However, it is easy to forget that every new technology passes through technical obstacles and increasing pains. Iota technology and implementation will change, but potential investors should consider the general architecture of cryptocurrency and the history of the development team in evaluating the entire project.
White Paper and Road Map
The white paper of the Iota company contains a lot of useful information. I will list one but you can find everything in detail directly by clicking here.
The main feature of this new cryptocurrency is the “tangle”. The latter manages to block the blockchain and offer the features necessary to establish a machine-to-machine (M2M) micropayment system.
This cryptocurrency uses a technology that has great potential. If successful, it could be a valid competitor for blockchain technology and for the market that has developed over the years on the internet.