What is IOTA ?
To first understand what is IOTA, we must know that it is a form of cryptocurrency, and we must understand what exactly a crypto currency is. Crypto currency can be described as a form of digital money aimed with being secure whilst being anonymous in many cases. Crypto currency is a currency linked to the internet that makes use of cryptography which is the process of converting legible information into a code that is almost impregnable so as to track transfers and purchases.
Crypto currencies have today become a phenomenon renowned to most people globally. While a few types of crypto currencies are still relegated to the backrooms of crypto currency talks, there are a few that have gained mainstream acclaim and acceptance to be researched and used by most banks, governments, people and companies.
To date, more and more banks, accounting firms, software companies and governments have become interested in crypto currency, or have chosen to start a blockchain project.
A limited amount of people actually know that crypto currencies were created as a byproduct of another invention. The inventor of the popular Bitcoin never intended to invent a currency. His aim was to create a peer to peer electronic cash system that differed from earlier attempts by making it decentralized. The result of this became the beginning of crypto currency as we know it.
Types of Crytptocurrency
Thanks to the Satoshi Nakamoto’s invention, there have been a plethora of crypto currencies being invented. As of November 2017, there are over 1324 types of crypto currency available on the internet. This large number is due to the fact that crypto currency can be created with ease at any time. The most popular type of crypto currency is Bitcoin and this is evident in its market capitalization. Other popular and widely known cryptocurrencies are: Ethereum, Ripple, Litecoin, and Bitcoin Cash. This article is going to elaborate on a lesser known but still as effective cryptocurrency called IOTA. IOTA while coming after the likes of Bitcoin and co drastically differs from their part to form a cryptocurrency that is in itself a novel idea.
What is IOTA?
IOTA is a crypto currency specifically designed for the Internet of Things. Before understanding what IOTA is, it is important to know what the “internet of things” is. Internet of Things can be defined as the interconnection via the internet of computing devices that are embedded in everyday objects that give them the ability to send and receive data. IOT devices can be thermostats, refrigerators, lights and cars just to name a few.
IOTA was created in 2015 by David Sønstebø, Dominik Schiener, Sergey Ivancheglo, and Dr Serguei Popov, with a fixed supply which could not be expanded by mining. The fixed supply numbers at 2,779,530,283,277,761 iota. This no mining characteristic made it different from other cryptocurrencies.
IOTA has four massive advantages (which are scalable, decentralized, modular, and fee-less) over blockchain crypto currencies. IOTA is different from currencies like bitcoin that use blockchain architectures for maintaining its ledgers. IOTA uses the Tangle: a Directed Acyclic Graph or DAG. Using Tangle solves both the transaction fee and scalability issues faced by Bitcoin and other crypto currencies inspired by Bitcoin by necessitating a performance of a type of proof or work by the sender, which then approves two transactions. This singular act joins the transaction and the validation of the transaction as one. This removes the need for dedicated miners making the system fully decentralized. The system users (ones that make the transactions) are the only ones that can influence the system. This is different from bitcoin miners in that they instead simply enable the system to operate.
The amazing consequence is that in IOTA, the network transaction speed has a direct correlation to the number of users; with every increase in the number of users, the network transaction speed also increases. This feature eradicates the prerequisite of users having to pay miners for doing the proof of work, as the users do it themselves, causing there to be no fees attached to making a transaction.
Units of IOTA
IOTA can be divided into four units of account. The smallest unit of an IOTA is an Iota, named so after the smallest letter in the Greek alphabet. The naming of the larger units differ in that, the names are created by conjoining metric system like prefixes to the base word “Iota”. This is why one million Iota are called Miota or MegaIota (Mi). This is the base unit of Iota that is used for trading on cryptocurrency exchanges.
Ranking from the smallest to largest unit, they are: Iota, KiloIota 10³, MegaIota 10^6, GigaIota 10^9, TeraIota 10^12, and last but not least PetaIota 10^15.
Who Runs IOTA?
IOTA is run by the IOTA Foundation, which is a non profit dedicated to developing the technology used and helping to make sure it remains license free for every developer to work with.
The foundation has created a collaboration with Innogy and Volkswagen to develop an IOTA based technology called Carpass that enables digital identities, secure audit trails and also charging network for cars. As of December 2017, IOTA has a market capitalization of $10 billion, which makes it the 7th largest cryptocurrency in circulation today.
The foundation was incorporated in Germany as a non profit corporation, one that is tasked with coordinating and funding developments within the IOTA ecosystem. The foundation is the first non profit corporation registered in Germany to be funded exclusively by cryptocurrencies. It prides itself on steadfastly building sustainable ecosystems around IOTA that will not only rapidly advance it’s development but also accelerate it’s commercial adoption as an open source technology. To aid this mission of promotion IOTA, the Foundation as of November 2017 has a $100 million fund to put to use by distributing IOTA tokens to companies that are building technologies with or within the IOTA ecosystem.
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