What is IOTA? – New Zealand’s IOTA Overview
What is IOTA – An NZ Rundown
IOTA is highly unique in how it works, and is often referred to as the “third-generation” of cryptocurrencies. Where most cryptocurrencies are based on a blockchain, IOTA works on a tangle. This might sound like a relatively boring distinction, but it results in some impressive differences and features that other cryptocurrencies struggle to provide.
- IOTA (MIOTA) launched in June 2016
- As a cryptocurrency, IOTA is unique in that it does not require a blockchain to operate
- IOTA facilitates payments and Internet of Things applications, via a system of machine to machine (M2M) transactions
What makes IOTA so interesting?
- No fees. None. Nadda. Zip.
- It’s super fast
- It’s super scaleable
- It can be run offline
Sounds pretty good, right? To understand how IOTA manages to do all these things, let’s start with looking at the infrastructure that IOTA is built on – the tangle.
What’s a tangle?
So if you’ve read up a bit on Bitcoin and other cryptocurrencies, you’ll know that they work on a blockchain. A blockchain is, quite simply, a chain made up of digital blocks. Each block records transactions that people make to each other. And as it’s a chain, it has to be built in a linear fashion, one block after the next. This means that there is a limit to how fast the network can process transactions.
IOTA, however, is entirely different. It runs on a tangle, not a chain. And as you might imagine, this means things don’t have to be ordered and structured. Each block can link into any other block, it doesn’t have to wait in a queue to be the next block in the chain.
The tangle is created by IOTA’s protocol, which requires that each block verifies any two other blocks. This means that blocks can be added to the tangle in any order and as long another block verifies them, then they’re good to stay. It also means that parts of the tangle can go offline for a period and link back into the main tangle later.
How can IOTA have no fees?
Typical cryptocurrencies have blockchain network fees, which are the fees you must pay to get your transaction included in the blockchain. Fees can change from day to day, but can get quite expensive. For example, Bitcoin fees can get up to $80 per transaction when there’s lots of traffic on the network.
For IOTA , the tangle innovation removes the need for fees. Instead of having to pay someone (eg a miner) to verify your transaction and include it in the chain, each block in the IOTA tangle verifies two other blocks, fully removing the need for mining.
What is IOTA good for?
We’ve learned that IOTA is super fast, can handle any number of transactions at once, and that it has no fees and can even go offline. Those are some pretty powerful features!
With these, IOTA might help us unlock whole new micro-economies, which would never have been feasible without IOTA’s tech. For example, NIWA might be interested in buying data from your home weather station at one-millionth of a cent per data point – currently, that’s too ridiculous an amount for anyone to bother about, but with free-of-charge super fast transactions, it might make sense. And then your weather station could use that IOTA to buy power off your solar panel, which is also making IOTA from drones that are re-charging at it… the possibilities are endless!
And if this is starting to sound like IOTA could be a currency for the Internet of Things (IOT), that’s exactly what IOTA (aka Internet of Things Application) is intended for.
Other epic IOTA use cases:
Let’s say you own a Fujitsu heat pump, and Fujitsu as a company would like to see how their heat pumps are performing after they have been purchased by a customer. There are many bite-sized bits of data that Fujitsu would like to acquire, such as peak usage times, fan speeds, fan temperatures and what temperatures are prefered in certain geolocations around the globe. Each Heatpump has a little computer chip that gathers all this data that Fitjitsu wants from its customers, but the transaction fees and speeds are too slow to get this in real time with fiat money. This is where IOTA comes in, as you could create an IOTA wallet, and have your Fujitsu heat pump automatically send you IOTA for every single little droplet of data that they harvest, in real time with no fees.
Another example of how IOTA could be utilised would be if you were to own a Tesla smart car, and Tesla wants to know how their battery is performing, how congested traffic is, average daily commute times, whether there is a pothole on that street you’re about to drive down, how loud you like your music, how many times the car is driven each day, how humid the weather is and so forth. Clearly, all of this data has value, but it’s worth so little that it’s not worth being traded with fiat due to the high transaction fees. The use case for IOTA is that your Telsa could pay out IOTA in tiny doses every time that your car automatically generates data. You could make money for just being!
Is IOTA Investment Friendly?
IOTA arrived on the cryptocurrency market in June 2016. Since then, prices have peaked as high as $5, before falling prey to the same bear market as Bitcoin throughout 2018. However, IOTA continues to develop the technology underpinning the IOTA network. Interest in IOTA by leading big tech companies, also makes IOTA a top coin to watch in 2019 and beyond.
Mainstream Support for IOTA and IOTA Applications
Mainstream technology companies consistently support IOTA. These include Volkswagen, Microsoft, Jaguar, Land Rover, Fujitsu, Samsung, and several others. This is thanks to the fact that the IOTA network can be used to run IOTA applications, as well as process machine to machine (M2M) transactions.
- Masked Authenticated Messaging (MAM) can be used to send encrypted messages & RSS feeds over the IOTA distributed ledger
- IOTA is already being used by CognIOTA to allow users to rent idle CPU power from other network users in real time
- Deutsche Telekom, Bosch, and Microsoft are already using IOTA technology to monetize big data
Sounds great! Where can I get some?
Here at Easy Crypto we can sort you out if you want to purchase IOTA. We’ll deliver your IOTA in a secure Easy Crypto Wallet file, but if you want to set up your own IOTA wallet, check out our how-to guide.