In case you have not heard of IOTA, or you have heard it but do not know much about it, please follow us in this article as we shed some light on it.
Table of Contents
What Is IOTA?
IOTA is a distributed ledger that is used to execute transactions between machines and record them.
It uses mIOTA, which is a cryptocurrency, as a way of accounting for transactions. It also uses a system of nodes to confirm transactions known as Tangle.
This is one of its most important innovations since its inception. It is faster than other normal blockchains found in other cryptocurrencies.
IOTA was initially announced in 2015. This was done through a post that was used to announce a token sale on a Bitcoin forum online.
IOTA was created by the IOTA Foundation, which is a non-profit foundation and has signed agreements with some major companies to extend the usage of the platform between connected devices.
One of the main aims of IOTA is to address scalability and performance, two major issues that plagued Bitcoin, through the use of Tangle, although has scaling problems of its own. Its cryptocurrency was even weak and made open to hackers.
Going Deeper
Devices can exchange data as well as payment information between themselves in the internet of Things (IoT) because millions of computers all over the world are connected to the Internet.
IOTA, which intends to become the main mode through which such transactions can be conducted on such devices, has been described as a “public permission-less backbone for the Internet of things that enables interoperability between multiple devices.”
This means that transactions between connected devices can be enabled and anyone at all will be able to access it.
It is also touted to have solved several problems that other cryptocurrencies have been struggling with using standard blockchains. Some of these problems are the centralization of mining, slow network speed as well as scalability, which is the number of increasing transactions that are processed by a blockchain while not affecting others.
These problems normally occur as a result of the backlog of transactions found on the Bitcoin blockchain.
The hard puzzles that Bitcoin miners must solve as well as the small block sizes are some of the reasons for the backlog.
Miners are required to solve those puzzles so that they can then win the cryptocurrency as their prize.
IOTA, however, has found a way to solve the problem through the configuration of the architecture of the blockchain to Tangle.
Criticisms
There have been numerous criticisms of IOTA, which are mainly about its technical faults. Its system is unproven and an attack that was launched on it ended up costing it to lose over 3.9 million dollars worth of mIOTA, which is its cryptocurrency.
This was a phishing attack. The creators of IOTA then published a post that outlined the needed steps in generating a strong seed when using its cryptocurrency to its users.
The encryption used on mIOTA is also supposed to have been created from scratch since IOTA did not make use of the well-known SHA-256 that is used by Bitcoin.
Serious vulnerabilities were also found with the hash function, which is known as Curl. It was found to be broken after it returns the same outcome with two different inputs.
IOTA VS Bitcoin
IOTA is different from Bitcoin in several ways.
One of its main strategies for solving the problems that plague Bitcoin was by doing away with some key concepts of the blockchain and its topographical constraints.
IOTA’s cryptocurrency is also pre-mined and the consensus of its transactions is different from those found on a blockchain.
Bitcoin rather uses a system full of running nodes that contain the history of its transactions for a ledger needed to grant confirmations and consensus. These full node miners are however not needed in Tangle.
Future
The future of IOTA shows hope even though its market capitalization was down after it went high in 2017.
It is expected to improve in the year 2021. It had a gain of over 100 million dollars when it rose from 446 million dollars at the beginning of 2020 to over 900 million dollars in December 2020.
Conclusion
IOTA’s dedication to improving the ‘internet of Things and its alliance with other companies are sure signs of its growth. This helps to set it apart from other cryptocurrencies already in existence.
We hope that this brief introduction has given you some insight into IOTA, which claims to change the cryptocurrency game.
In case you are looking for the best wallet to store your cryptocurrencies, you can check out our guide here.
