IOTA is a tangle powered payment network that's looking to shake things up with its version of a crypto paradigm shift. IOTA contains 'IoT' in their name so, surely enough, the focus of IOTA is the 'Internet of Things' and also what's known as the machine economy --which really serves as their primary focus. In time they'll also be aggressively targeting peer-to-peer micro transactions.
They're building from the ground up a network based on the following features:
• Infinite Scalability
This is achieved through what is really the big deal about IOTA and why it's as big as it is; IOTA's proprietary technology, the 'Tangle'. The Tangle is a revolutionary alternative to the blockchain.
In theory, the more nodes or IoT devices on the Tangle, the faster the confirmation rate. This is diametrically opposed to the scalability of blockchain and blockchain consensus where the more transactions on the blockchain network, the slower it is and the higher the fees. So IOTA is an extremely interesting crypto because it is using a completely new algorithm --they've developed-- that hopes to solve one of the biggest issues in crypto today.
• Security
Not only do they have to ensure it's scalable, they also have to ensure it's secure. IOTA's Tangle is inherently secured through decentralization (which is to be expected of every crypto) but initially there are no miners involved to secure the network instead participation on the IOTA network is active. With each IOTA transaction, the user's device confirms two other transactions. In doing so, each user helps to confirm the validity of the entire network. This turns network consensus from an extrinsic activity where a few miners are paid to validate the network, leading to minor centralization into an intrinsic activity where everyone on the network participates in securing the network and rewarded with zero fees.
• Light weight
What's important about having an intrinsically secured network is that it has to be light weight. As IoT devices will need to be able to confirm transactions, the network must be lightweight enough for even the simplest IoT devices to confirm two other unconfirmed transactions. But with that addressed, that will ensure the network is economical.
• Economic
As IOTA will not have transaction fees, it'll be ideal for transactions in a machine economy and peer-to-peer economy. Machines will be able to pay each other for things like: electricity, server power, storage, e.t.c. This will lead to very exciting possibilities for IoT scaling and doing things we never thought possible. On the peer-to-peer side, no fees will make IOTA ideal for everyday transactions where fees can be a limiting factor of crypto mainstream adoption..
• Directed Acyclix Graph (DAG)
DAG is for tangle what blocks is for blockchain. It's the underlying tech behind distributed ledger and secure transactions in the tangle but gives the tangle an edge over the blockchain because it enables features like infinite scalability, offline transactions, and zero-fee transactions that we may never see developed or implemented for the blockchain.
Conclusion
IOTA is definitely one of the most innovative projects ever seen in the crypto ecosystem. It's highly technical and ambitious. As blockchain scalability becomes a dominating issue in the years ahead, investing in an alternative consensus algorithm may prove to be a wise decision.
IOTA's mainnet was launched in July, 2016, and for the most part has been working as planned. However, it's important to note that IOTA is currently not decentralized but relying on special node called 'The co-ordinator' whose main purpose is to protect the network until it grows strong enough to withstand large scale attacks. It's essentially training wheels until the tech and network are ready to be fully independent.
The team behind IOTA has been growing and is comprised of many experienced individuals. If everything goes well and the team is able to accomplish their plans, then the sky is the limit for IOTA.
Disclaimer: I do not currently hold IOTA though I believe it's one of the most important crypto projects out there and am excited to watch its progress. I was just bored and stuck in the hospital 🤢 and decided to write something educational for the steemit community. So, this is not financial advice and should not be regarded as such.
