IOTA in lay terms
Iota is a relatively new cryptocurrency that has floated in and around the Top 10 Market Caps since its launch on Bitfinex in Q2 of this year. The Iota team offers the solution to Blockchain’s problems. They say with Iota there are no scalability issues, the cost of a transaction is free, and it’s completely decentralized. That’s right, a fee-less transaction that has no scaling issues in a completely decentralized sphere.
Iota is a very different ‘Blockchain’ technology. In fact, it’s not even a Blockchain at all. The underlying technology Iota uses is actually called the ‘Tangle’, which is a Directed Acyclic Graph (DAG). This new technology is different from that used in Blockchain, as in the Proof of Work (PoW) carried out with Blockchain cryptos like Bitcoin, requires the miners to validate your transaction. This is a PoW system that allows the miners to make money for mining the cryptographic puzzles.
The Tangle at work
The Tangle doesn’t use miners to validate their transactions, however. Rather than pay miners to mine the transaction, the Tangle actually requires any sender of a transaction to perform a PoW. What this means is for the sender to fulfill their transaction they are required to approve two other transactions. So, by taking out the need for miners, who don’t actually use Bitcoin - they just help it - Iota is using its users to validate transactions, thus cutting out the cost for PoW, which ultimately makes transactions on the Tangle free of charge.
Scalability issues are a serious threat to the growth of Blockchain cryptos. The more people that use Blockchain technology, the slower it goes. In the coming years, as the Blockchains grow and become the tech for business and life in general, all Blockchain technologies will constantly need to continue to work on their scalability issues. Iota have sorted this from day one. Because each user validates two others transactions, the more people that use the Tangle, the faster it will go, thus ruling out any scalability issues.
Iota business connections
Iota are working with major companies like Bosch, Cisco and Microsoft in readiness for the Internet of Things (IoT) smart connections. The IoT will make things like paying for your parking fees fluent and cashless, finding the best deal to pay for your commodities or selling your products for the best available price effortless. This will all be done through machine-to-machine technology on the IoT. The IoT is the platform for technologies like smart meters and all other smart devices that will need to connect with each other, without human interaction, and all future devices will be fitted with an IoT smart device, and will, therefore, be able to connect with each other.
I’ll use smart meters as an example to explain how Iota and the Tangle will be used within the IoT: In the near future we will all be getting our electricity from where we choose, with the aim of saving money. Smart meters will give us the freedom to look for whichever deal is best, and no longer will we be tied to any one company. So, if my neighbour is producing his own electricity, and he has more than he needs, he can sell his for whatever price he wants on the IoT. My meter will go in search for the cheapest possible electricity. It might get a bit from my neighbour and a bit from the house down the road, and a bit more from wherever else is best price, thus paying for each bit of electricity used, and the Iota platform will be the payment processer for microtransactions among the smart devices.
The IoT will be the backbone of future technologies, including smart cities
According to BitcoinTalk (Iota Page) the number of connected devices on the IoT in the future is estimated to be 50 billion. That’s 50 billion devices all able to connect with each other in search of whatever it is they might be searching for. But, it’s important to understand why Iota, and not another Blockchain technology, will be the front-runner in this technology. A smart device will constantly search for the best deals; it might owe only a tiny amount (like a fraction of a cent) to another device, so a transaction so small that actually has to pay a fee to send would be impossible to work, added to the fact that all these microtransactions are speeding up the Tangle, it’s a no-brainer.
It might be 2, 5, or 10 years before the IoT things really takes off, but with the speed IT evolves it might take 2, 5, or 10 months. I’m not saying Iota is going take any amount of time, but I do believe it is a long hodl. That’s not to say we won’t see good rises along the way. Just in August this year it rose from 14c to about $1.10 because of a couple of announcements, like when SatoshiPay announced they were jumping ship from the archaic Bitcoin Blockchain to join the fast and feeless revolution that Iota is developing.
The future will be IoT connected cities
The market is still a little unsure about Iota. Some think it’s one too far in the future, but think of those who invested hodl in Bitcoin 8 years ago. People are investing big money in Iota now, it’s network and business collaborations are growing every day, and companies are wanting to use their Tangle, because why wouldn’t they? It’s free and fast.
Sources:
http://iota.org/
https://bitcointalk.org/index.php?topic=1216479.0