What is IOTA?
IOTA, released in 2015, is a lightweight currency when compared to cryptocurrencies such as Bitcoin and Litecoin.
Advantages of IOTA
Key benefits of IOTA’s cryptocurrency include commissions for operations, high scalability and the ability to process transactions in a minimal amount of time.
An important factor in cryptocurrencies is scalability. At first glance, 20 transactions per second seems to be a good speed. But if approximately a billion wallets are connected to the network, the system simply has no time to process all transactions, and the capacity becomes insufficient. The cryptocurrency IOTA is intended to eliminate this deficiency.
Another factor is the need to always be connected to the Internet. This is a mandatory condition for all modern cryptocurrencies. With IOTA, you only need to connect to the Internet 2-3 times a day, to save battery power. The rest of the time, the system works with the local mesh networks.
There are no blocks and therefore there are no problems with their small size. As a result, transactions are inserted asynchronously and the faster they arrive, the faster they are processed. This is one of the major benefits of IOTA’s blockchain, which greatly facilitates the work of the entire network for a large number of users.
Is it possible to mine IOTA?
IOTA mining does not exist. This is due to the cryptocurrency principle. We will describe in more detail why IOTA mining does not exist.
For example, Bitcoin has two types of subscribers – users who send each other the currency and miners who make money from transactions. This means that commissions in this system are mandatory, because the miners are involved in the system purely for gain. With the growing popularity of the currency and the number of transactions, commissions payable in the system also increase, which makes the system less attractive to some users.
In IOTA’s Tangle system, users are also miners. To complete a transaction here, you must confirm the two previous transactions. Therefore, commission for the money transfer is not charged for this action. This allows the network to be scaled to a gigantic size, and for users to transfer very small amounts, such as B. 0.001 cents.
This controls the network itself, and users confirm the transactions themselves. Now, you no longer need miners to confirm the operation of the cryptocurrency on their farms around the world. Every user becomes a miner, but he mines only when he makes a transaction.
Many do not know if it’s good or bad, but miners cannot make money with this cryptocurrency.
The future of IOTA
This cryptocurrency is just beginning its journey, but it has a great future ahead of it. To prove this, we’ll share some excerpts from the interview with the company founder, David Sonestebo. He said that they are entering into agreements with various large companies at this time. One of them has already signed the Microsoft Azure contract.
Next, they are preparing the extensions for the capabilities of IOTA. Various applications and modules are written for this purpose, whose functions involve much more than just the transmission of information.
In the next phase, they plan to produce processors capable of processing up to 1,000 transactions per second.
The IOTA cryptocurrency
This is just the beginning of a long road, where most unexpected problems can appear in the form of legal legitimacy, system reliability and the current cost of computational computing. These problems can only occur after the IOTA tokens are widely used. However, experts suggest that IOTA’s cryptocurrency is our future and will greatly simplify our lives.
IOTA’s blockchain solves the following Bitcoin problems
Centralizing mining: As history shows, miners tend to unite in large groups. This leads to centralization and the possibility of a 51 percent attack. This possibility is absolutely unacceptable in the world of IoT; the Internet of Things.
Obsolete cryptography: Although there are no industrial quantum computers yet, the possibility of their occurrence in the future should be considered.
Micropayments difficulties: Provisioning for miner transactions and combating spam attacks is becoming increasingly important in the Internet of Things world.
The Tangle protocol solves, in one way or another, all of the above problems, while being compatible with the blockchain. IOTA will not completely replace Bitcoin, but rather, it is more of a platform of “smart contracts”, such as Ethereum and Rootstock. The client supports most operating systems and the protocol is a fairly inexpensive microcontroller with 16KB of RAM.
Key benefits of IOTA Mining
The elimination of the shortcomings inherent in most blockchains has led to the development of the unique benefits of IOTA cryptocurrency.
The principle of the Tangle system provides for transactions with low transaction costs and eliminates the need for IOTA mining. In the usual transactions with other digital currencies, the blocks are confirmed, tested and approved by the miners. The new technology takes over the formation of each new operation in a new block unit and confirms itself by validating the two previous transactions. That is the basic principle of mining.
This process lasts indefinitely and the chain identifies itself. Experts see this feature of the IOTA system as a model that can become the most important feature for many business projects in the future.
Another advantage is the scalability of MIOTA. The technology is scalable and can be easily adapted to high-level networks. Here, the execution of thousands and even millions of transactions is considered normal.
Alexander Weipprecht is the managing partner of Provimedia GmbH. As a trained IT specialist for application development, he has been advising leading companies on the following topics for more than 10 years: online marketing, SEO and software. Cryptocurrency is becoming increasingly important to businesses and investors. Through Coin Report and Krypto Magazin Germany, Alexander wants to give all people easy access to the subject matter.