What are IOTA Coins? Why do their popularity grow stronger?
IOTA crypto-token has turned to be one of the most popular altcoins of the latest months. This token, which was elaborated in 2015, is getting more and more popular throughout the world. According to coinmarketcap.com, it has recently taken the 11th place among the most capitalized cryptocurrencies.
When the token, and technology, were being created, the IOTA developers aimed to supply “Internet of Things, IoT”, or physical devices network with a useful, reliable, and cheap economic basis, for which token was initiated. Generally, IOTA was aimed to ensure the secure data transmission (payment data is mainly meant) between the devices in the “Internet of Things”.
The core advantage of the payments performed in IOTA cryptocurrency – is the absence of the fees when transferring funds between different devices.
History of IOTA
The process of IOTA creation was launched in 2015. The purpose was to integrate the altered blockchain to the “Internet of Things”, maximizing the efficiency of the payments made between the parts of the IoT devices. After the system was launched, the period of beta-testing began; it lasted the greatest part of 2016.
Though during the mentioned period of time, IOTA was functioning as a payment system, it was possible to buy/sell it only in the off-market space. IOTA listing on the cryptocurrency platform was postponed till the mistakes were fixed and all the testings completed.
IOTA Foundation has all the proprietary rights for IOTA technology.
The effective payment system was created by 2017 due the efforts of the developers team. The system ensures the rapid, secured, and free of charge transactions between the IoT devices. It also has a good scaling potential.
The coin achievements were not left unnoticed by such major venture investors as Outlier Ventures, for instance. Moreover, SatoshiPay, a micro-payments service, has turned to a decision to make payments with the help of IOTA. Certainly, the Foundation did succeed in establishing of partnership, and business relationships.
IOTA coins have been listed on the number of exchanges since the summer 2017; the number of these exchanges is growing continually. The Foundation initiated the work of the data market based on IOTA technology in November 2017. The project gained the attention of some major corporations, and scientific organizations. This news couldn’t but affected IOTA coin rate positively.
As the coin develops, it is no longer regarded only as a narrow focus specialized network for transactions in the “Internet of Things”. IOTA is likely to become competitive along with the other cryptocurrencies on the micro-payments market. Nevertheless, technology is still under development. The number of people willing to buy IOTA for investing is also changing.
Though IOTA is usually called cryptocurrency, it is not terminologically right. In fact, IOTA is a token. The difference between token and cryptocurrency is thoroughly described in the article “What is the idea of token?”.
Here are some facts about IOTA coin: mining is impossible; decentralization is restricted; blockchain has a specific form of so-called “Tangles”, ensuring system functioning. The idea of Tangle is the following. A transaction, which has been emitted to the network by a IoT device, gets confirmed after the device verifies and confirmed two accidental transaction, which have been earlier emitted to the distributed network. Each transaction has to accumulate the necessary amount of verifications to get confirmed. It works almost instantly in practice. Though network overloads occur sometimes, the level of the unconfirmed transactions is always low, and never come close to such terrifying volumes, which are typical for bitcoin mempool.
Read more about bitcoin-transaction peculiarities in the article “Everything about bitcoin transactions”.
Tangles also have drawbacks. The matter is that the network is based on the numerous nodes, which are quite weak in the calculative sense. That is why a powerful attack using specialized equipment is able to break the system. In case with bitcoin-network, the system functioning won’t be ceased so easily. However, as far as the number of processed transactions grow, the system’s potential integrity should increase.
The idea of the technology described above is presented in the form of scheme below.
The exchange of the payment data is also performed through specialized Flash Channels, where mutual transaction accounting take place. Such technology contributes to shorten the time necessary for transaction confirmation, summarizing the financial data of the hundreds of thousands transaction. Evidently, the balances are sent to the common IOTA network.
In course of the protocol development, the separate Flash Network level was created, aimed for large transaction volumes within Flash-channels. The effectiveness of the IOTA system work is assured by the sufficient number of the full nodes. In case with this token, there are no miners. Thus, work of the nodes is assured by the assistance of the companies, in particular cryptocurrency exchange, interested in IOTA technology use, or development. Due to the system maintenance is what the companies are interested in, unlike to the traditional cryptos based on mining, it can function pretty well with no users’ fees.
More detailed about cryptocurrency mining in the article “link” (coming soon).
IOTA transactions are protected with the cryptographic signatures just like the regular cryptocurrencies. Hash-function of the Curl original elaboration, which was initially used for signature, was criticized much as unreliable. So, the developers replaced it by SHA-3 that is more popular and trusted.
Iota is the smallest calculation unit in the IOTA system. The multiply units are applied to operate with Iotas. These are kiloiota (1000 Iotas), megaiota (1 000 000 Iotas, or MIOTA – is used most frequently), gigaiota, and so forth.
In the very beginning of token existence, the developers obtained all possible units that could ever be created. The total amount of the coins equals 2 779 530 283 277 761 units, which is a little less than 2.78 bln MIOTA.
A specific wallet has been created by the IOTA developers to keep the coins. Unfortunately, it has been lately criticized by the community as undeveloped, complicated, and hardly handy. That is why it cannot be fully recommended to an inexperienced user.
Thus, the new tokens and coins appearing on cryptocurrency market are perspective technologies. The number of the Internet-connected devices has long ago exceeded the number of the users themselves, making IoT one of the key conceptual achievements of the modern society.
Read more about the value of cryptocurrency for the digital economy in “link”(coming soon).