What you need to know about the promising Bitcoin competitor
With the IOTA token, there is now a flexible type of crypto gel for machines. This so-called Altcoin, according to its inventors, could soon compete with Bitcoin. But what are the advantages of the new crypto coin?
The IOTA crypt diet was developed and launched by the three founders Dominik Schiener, Serguei Popov and David Sønstebø in 2014. The three developers created a currency that was to be "the backbone of an autonomous economy of machines". Here, the crypt diet operates in a kind of machine economy, in which the most diverse technical devices can pay each other.
The creators of the crypto coin see the necessity of their currency for the future of various economic processes. According to the founders, the internet of things needs an autonomous payment system with a suitable means of payment. The IOTA token should now fulfill all these properties. However, in order to understand exactly what this means, you have to look more closely at the function and construction of the IOTA.
Machine paid machine
By means of ever-advancing digital networking, all machines of an industrial production chain are also to be interconnected in the future. The electric lawn mower with the cloud sensor, the car with the car park and, of course, the alarm clock with the coffee machine. Such M2M machine-to-machine relationships will continue to evolve in the future until one day money comes into play. In this way, the most varied machines could pay each other for their services rendered. The solar system could then buy data from a weather station, for example, in order to optimally align itself, or the domestic refrigerator goes to online shopping, if the milk supply is at an end. That machines themselves keep their money, in order to buy different services or goods, sounds from today's point of view still very surreal. But according to the founders of the IOTA, these processes offer enormous possibilities. For example, machines which do not have their own owners can also contact other technical equipment in order to do business.
Blockchain without block - advantage to Bitcoin
In order to obtain a fast and arbitrarily scalable currency, Bitcoin's original blockchain was replaced by a so-called "Tangle Ledger". According to this, there are no miners and blocks in IOTA, but only transactions. Founder Dominik Schiener explains the procedure as follows: "The transactions are interrelated, and everyone who submits a transaction takes part in the consensus. When you create a new transaction, you must verify two previous transactions." Such a method differs fundamentally from bitcoin mining. "If you look at a blockchain today, this is a single chronological string that sets block to block, which has limitations, such as the 10 minute interval at Bitcoin, what IOTA does now is that it uses a lot of strands instead of a string. " Through such a process, it is possible to continue the verified transactions endlessly. By virtue of this, in principle, infinite scalability, the IOTA has a considerable advantage over the bitcoin. If there are billions of machines that interact, communicate and exchange data in the near future, a flexible payment system is needed that can quickly and easily implement transactions in such an M2M market.
Investment has paid off
At the end of 2015, the founders of the IOTA token will sell currency units worth around 500,000 US dollars to interested investors. To the delight of the lenders, the value of this first tranche oscillated only half a year later at more than 15 million US dollars. Thus, Dominik Schiener is confidently self-confident and says: "We have been the most innovative Altcoin project ever since Ethereum."
What are Altcoin?
The IOTA crypt diet is also known as Altcoin. Altcoins are alternative cryptic approaches such as the ethereum, peercoins and IOTA tokens, which exist alongside the bitcoin and have different designs and characteristics. Compared to Bitcoin, many of these legacy products have significant advantages, such as cheaper mining methods, faster block interval generation procedures, greater collateral, and uncomplicated transactions. In the future there is the possibility that some of these oldcoins will develop even better than the Bitcoin.