What Is IOTA?

What Is IOTA?

Let me tell you directly: IOTA, or MIOTA, is a distributed ledger built to handle and execute transactions between machines and devices. It's an ecosystem that covers everything from verifying product origins and authenticity to drivers monetizing the data their cars gather.

This ledger relies on a cryptocurrency called MIOTA to track transactions within its network. The standout feature here is Tangle, a node-based system for confirming transactions. IOTA asserts that Tangle outperforms and outpaces the typical blockchains found in other cryptocurrencies.

The IOTA Foundation, the nonprofit overseeing the ledger, has secured deals with major players like Bosch and Volkswagen to broaden the platform's reach among connected devices.

Key Takeaways

Understand this: IOTA serves as a distributed ledger for managing transactions among connected devices in a worldwide data-sharing setup, with MIOTA as its cryptocurrency.

It started out as a hardware effort to create affordable general-purpose processors.

IOTA tackles Bitcoin's main scalability and performance hurdles through a direct acyclic graph, where each new transaction validates two prior ones.

History of IOTA

The co-founders—Sergey Ivancheglo, Serguei Popov, David Sønstebø, and later Dominik Schiener—launched IOTA. They announced it in October 2015 on the Bitcoin Talk forum, originally under the name Jinn project, which focused on developing low-cost, energy-efficient hardware like general-purpose processors for IoT.

Jinn ran a token crowd sale in September 2014. By 2015, it rebranded to IOTA with another sale, raising $590,000 total. Post-rebrand, Jinn token holders swapped for equivalent IOTA tokens. In 2021, IOTA's latest funding round brought in $100 million.

The planned total supply of MIOTA is 4.6 billion.

Goals of IOTA

Initially, IOTA was pitched as a blockchain for the Internet of Things, a network where home devices connect to central servers. But it's grown into something bigger. Per IOTA's lightpaper, almost any data can be turned into revenue.

Take cars, for instance—they gather data on weather, roads, and driving that owners can sell to businesses or governments. That income could cover electric vehicle charging costs.

In places where parking is a hassle and expensive, IOTA's network tracks, monetizes, reserves, and handles payments for spots, making the whole process smoother.

IOTA's setup also simplifies data collection and transmission via oracles—nodes that shuttle data to and from blockchains or similar systems. It's already been applied to monitor efficiency, safety, and sustainability in mining.

Future of IOTA

Many focus on a crypto's price, volume, and indicators for investing, but IOTA goes beyond issuing a token for speculation—it targets real-world problems.

Cryptocurrencies and their underlying tech, like blockchains or DAGs, shine as problem-solvers. That utility builds lasting value over hype. If they fix actual issues, success follows. IOTA has positioned itself well, but industry adoption is the key unknown.

How Is IOTA Different From Bitcoin?

IOTA addresses Bitcoin's flaws by ditching core blockchain ideas and limits. MIOTA is premined, and consensus works differently. Developers introduced Tangle as a new data structure for organizing info in computer memory.

IOTA Is Not a Blockchain

Tangle is a Decentralized Acyclic Graph (DAG), a non-sequential node system where each can link to multiple others, but only forward—no looping back. This allows parallel transaction processing, not sequential.

As more systems join, Tangle gets more secure and efficient. It uses a tip selection algorithm with 'confidence' to approve transactions—if approved 97 times before, there's 97% confidence for future nods.

Transactions build 'weight' as they progress, increasing with approvals. Once confirmed, it's shared network-wide, and new transactions can pick it as a tip to self-confirm. This leads to low fees and power use, fitting various devices.

Bitcoin Requires Miners

Bitcoin runs on full nodes holding all transaction history, with energy-heavy mining to propose blocks.

Tangle skips miners—each new transaction references two priors, cutting time and memory for verification. A simple Proof of Work puzzle finalizes it, with those priors called tips.

Is IOTA the Same As MIOTA?

No, IOTA is the project encompassing Tangle and the MIOTA token used on it.

Is IOTA MIOTA a Good Investment?

You can invest or trade MIOTA, but that's not its core design. It's meant for paying fees and earning via network participation.

Will IOTA Reach $10?

Predicting crypto prices is tough due to volatility and speculation.

The Bottom Line

IOTA aims to outdo blockchain limitations with unique data and consensus methods common in such projects. Remember, this info is for education—check our disclaimer for details.