There are already tens of thousands of types of cryptocurrency running in the world, but Bitcoin and Ethereum remain the main measure for all coins. But enthusiasts don’t stop creating interesting samples.
IOTA (Internet of Things) is a technology of secure exchange of information and payments without fees between devices on the Internet of Things. Since there are opinions that in the future things will become independently involved in business, they will be able to interact, react and influence the processes taking place in the world. Cryptocurrency IOTA was launched in 2015 by Ph.D. in mathematics Sergey Popov with a team of programmers and entrepreneurs to improve the Blockchain technology. However, IOTA debuted among cryptocurrencies in June 2017.
What makes IOTA different from other coins?
For beginners will help general knowledge about the principles of the technology to understand fully the differences between cryptocurrencies. For example, Bitcoin operates on blockchain technology. This is a continuous sequence of blocks with information arranged according to a given algorithm. The main feature of IOTA has become a completely different technology is Tangle. This is distributed register architecture, the so-called “updated blockchain”. However, semantically Tangle technology is unique.
Blockchain doesn’t centralize management of network nodes, so the architecture of this technology is decentralized. For blockchain, it is important that all user transactions of system are recorded in a single transaction log (consensus nodes or blocks of information). Nodes consensus is main problem of the blockchain system. Therefore, in this technology should work miners, receiving for this part of the mined digital coins. These people process blocks of information using PC computing resources and special, more powerful hardware so that system users can exchange Bitcoin or another cryptocurrency.
There are no such blocks in IOTA logic, but authentication is provided: one monetary operation refers to two past ones, i.e. the user with his payment directly confirms the validity and compliance for the two other payments and Tangle according to the protocol rules. There are no miners in IOTA.
Why IOTA doesn’t need mining?
As a rule, miners play a key role for system as a whole in traditional crypto-technologies: they decrypt blocks and negotiate transactions. In blockchain, The procedure for coordinating payments is independent of the users, so users must pay a commission to the miners to confirm the cash transactions.
For example, Bitcoin is limited no more than 21,000,000, but so far the miners have decrypted about 19,000,000. In the case of IOTA, all the tokens are already been put into circulation and will no longer be produced.
IOTA is a self-contained network without miners, the members of which independently confirm the money transactions of other members. The commission does not need to pay in the IOTA system, as duties of miner are performed by users in here. The transaction confirmation function in IOTA is not separate from the transaction process: in technology, this is one whole, which allows cryptocurrency to scale without transaction fees.
Advantages of IOTA cryptocurrency
IOTA benefits list:
- users can make payments by IOTA-tokens in amounts less than one cent;
- no mining: all active users confirm transactions;
- no large duty hardware resources are required: the IOTA system is open to every user of devices with Internet access;
- if Blockchain technology obliges all network members to synchronize with the general system for making payments, then Tangle doesn’t such strict requirements (users can unite into clusters and even pay in coins in an offline).
IOTA has potential. The technology combines security, hardware availability and ease of use. IOTA is already cooperating with Bosch, Samsung, Fujitsu and there are prospects for expanding this list. So, over time, the price of an IOTA token will grow.
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NOTE: This article is not an investment advice. Any references to historical price movements or levels is informational and based on external analysis and we do not warranty that any such movements or levels are likely to reoccur in the future.
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