It is irrefutable that the growing hype and adoption of leading digital currencies like ethereum and bitcoin has inspired the creation of more alternative currencies. However, some of these altcoins are more interesting than others, as they take a different path from the famed blockchain technology. IOTA (MIOTA), for instance, utilizes a concept that exposes the inefficiencies of current blockchain-based models. To understand more about it, take a look at this insightful rundown.
What is IOTA?
IOTA encompasses a decentralized public ledger that allows the storage of digital transactions in a Directed Acyclic Graph structure dubbed as Tangle. When users make a transaction, it is used in verifying other two transactions. In turn, each transaction validates other two transactions and so on, leading into a tangled process. Users can exchange data gathered from the IoT device network in return for tokens called MIOTA.
When, How and Who Created it?
IOTA was created in 2017 by the IOTA Foundation, a German-based non-profit organization. The founding team included various individuals including Serguei Popov, Sergey Ivancheglo, Dominik Scheiner and David Sonstebo. The team focused significantly on developing a coin that would be highly scalable and lower transaction fees significantly, which are some of the critical challenges of blockchain-based cryptocurrencies.
What Technology does it Use?
While other well-known cryptocurrencies including ethereum and bitcoin rely on blockchain technology, IOTA uses an entirely groundbreaking concept known as Tangle. The concept is infinitely scalable, enables fast transactions, and eliminates transaction fees, thus allowing true micro-transactions.
Tangle is relatively superior to blockchain in the sense that it overcomes its limitations. Instead of the decentralized, peer-to-peer network relying on an external consensus process or mining, it allows secure data transfers to occur directly between digital devices in a self-regulating manner, without the need for transaction fees.
Price Changes in 2017 and 2018
IOTA experienced a meteoric rise at the close of 2017 after hovering between $0 and $1 for some time. The surge saw the price hit $5 on leading exchanges and even $9 for others like coinone exchange. Nevertheless, IOTA has undergone numerous price fluctuations in 2018, causing the price to drop below $1. Since 7/4/2018, the digital currency has shown gradual gains, and as of 9/4/2018 its value stands at $1. 0218 with a market cap of 2,718,753,074.0
What’s the Future of IOTA?
Despite its limited popularity in the cryptocurrency space, IOTA’s future may be bright. Here’s why:
Unlike blockchain-based cryptocurrencies, IOTA does not need miners to validate transactions or make new tokens. Since for its case tokens are pre-mined, the users themselves validate transactions. In turn, this process lowers transaction fees and the processing time. This feature is a plus for IOTA since other coins have steep costs and take longer to process transactions.
IOTA has strived to assure its users of high-level functionality through upgrading its Trinity Wallet, which is set to be unveiled soon. Some of the improvements include the introduction of 2-factor authentications features, launching of separate variants for mobile and desktop users and the inclusion of a user-friendly interface.
Recently, Johan Jungwirth, a Volkswagen manager, revealed a partnership with IOTA for an automobile project. It has also announced partnerships with other entities like Bosch and the International Transportation Innovation Center (ITIC).
Is it Good for Long-Term Investment?
Although the internet of things (IoT) technology is yet to go mainstream, it is quickly garnering popularity. Even so, most technology experts envision the IoT technology as the next industrial revolution. Furthermore, experts predict that over one billion devices will be connected to the Internet by 2020. With this in mind and the fact that IOTA revolves around connecting devices, it looks like the cryptocurrency will be worth more in the future. As such, the best way to look at IOTA, for now, would be as a long-term investment.