IOTA has become the fourth largest crypto coin after Bitcoin, Ethereum and Bitcoin cash. IOTA is short from Internet of Things Application, this is the new revolutionary type of digital technology. IOTA is the new generation ledger that doesn’t use a blockchain and it utilizes a new protocol invention that is called ‘Tangle’. The Tangle is a new data platform that is constructed on Directed Acyclic Graph (DAG), therefore it has chain, no blocks and no miners. The Tangle has a rich spectrum of features, zero fees, fast transactions, unlimited scalability, safe transfers and other. IOTA processes transaction’s fees and scalability of the blockchain in a way that it eliminates the block and chain. This means you have to confirm your last two transactions when using IOTA ledger.
What you'll learn 👉
As it was mentioned before making a transaction through IOTA platform, user has to verify two other transactions on the Tangle. In order to do this task, your device takes a series of math tasks (proof of work), which can be done on every device, tablet, mobile phone or laptop.
IOTA doesn’t need to use a lot of energy on mining, and other irrelevant stuff, as well as the Tangle’s elimination of miners, stackers and transaction fees, which are taken from the system, and validation fee has to be paid on it. IOTA ‘equals’= zero fees.
Proof of work cannot be in class with the previous system of blockchains, it is similar to Hashcash (used to limit email spam and denial-of-service attacks) and it has two tasks: to block the spam and to intercept Sybil-attacks. This Proof of work can be run and managed from little compact devices.
IOTA achieves infinite scalability through a parallel validation of transactions on the Tangle, sender has to confirm two other transactions in order to make a transfer. IOTA’s system of making transactions will raise proportionally according to the completed transactions, which goes up to an infinite number. Every single transaction is connected to the two transactions and verified, therefore over time it will be linked to other future transactions so this cracks the scalability problems, the network doesn’t depend on the central blockchain. IOTA scalability is shown in the picture below.
One of the most important parts of every crypto is transaction speed. Examining IOTA transaction speed we come to a conclusion that IOTA transaction time is inversely proportional according to the Tangle’s number of transactions. Iota can handle between 500-800 tps (transactions per second). The more transactions means the more speed.
Fixed Money Supply
IOTA has total fixed supply of 2 779 530 283 277 761 units which were created in the genesis block. As it was stated this is the fixed number and it cannot raise or fall.
IOTA uses a recently created trinary hash function, which is quantum immune. This self-created function is called Curl. This system is faster and eases the verification and signing.
Using the Tangle instead of a blockchain brings advantage to IOTA. The tangle procedure is structurally different from the blockchain system. The advantage is in the Tangle’s parallel transaction process. Comparing the features of the Tangle and the blockhain there are two differences.
1. IOTA is capable of making high speed transfers with this parallel authorization system. The Tangle increase i.e. feeds the IOTA with the speed and security, which results in raise of a critical massof the system.
2. Blockchain technology is far more complicated and strict, in the manner of competing parties in sticking to the blocks and chain as well as getting the prizes. This fact will result in paying transaction fees, because of the competing parties which are decoupled. This cannot not happen in the Tangle, users and miner are not separated.
Transactions made on a blockchain demand a specific time in order to be confirmed and added to the block. In the Tangle there are no time limits in finalizing the transaction. The Tangle is created as ternary (composed of 3 items) as an exception of the old binary code. Ternary coding is more systematic than the old system and offers better functional solutions. The Tangle is capable on running in both systems, binary or ternary.
Bitcoin, inspite of its popularity has some deficiencies, as scalability, long confirmation times along with raising number of users. In IOTA this is not the case, it is quite the opposite, the confirmation time will be long and slow if the network is small, raising number of transaction results in raising the Tangle’s capacity i.e. everything is proportionally increased. This type of platform is hard to understand according to its function and raise, how can something that is expanding in number and size, acquire speed and functionality, but this is something new, that will be accepted and globally used in the future.
A group of people found IOTA in 2015.,David Sønstebø, Sergey Ivancheglo, Dominik Schiener, and Dr. Serguei Popov. Experts in their fields mathematics, business and technology with many years in the cryptocurrency world . Popov did the Tangle’s math, Ivancheglo and Schiener wrote it into a code and the whole project was under a leadership of David Sønstebø. Later they made a crowdsale and the money was given to the people who participated and IOTA community united and donated some crypto funds to open an IOTA foundation in Germany. The foundation does a various things such as client development, collaboration with big holders, strengthening the brand IOTA in all spheres, founding companies and organizations focused on Internet-of-Things and blockchain and other. IOTA takes part in the ecosystem contribution through donations and various projects, establishing diffferent funds and other which will gain long time sustainability. Its developers are continuously working on new things, like a new hardware for further enabling of the IoT, a new type of microprocessor for IoT, a hardware implementation hasher etc. As a reminder in the end ,IOTA is the world’s first digital settlement system with zero fees.
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