What Is IOTA?

What Is IOTA?

What Is IOTA?

If you’ve been frantically following the rising cryptocurrency prices, you must have noticed the meteoric rise of IOTA as of September. For those familiar only with bitcoin and its forks, this “newcomer” might seem unusual. And although this one is different from other cryptocurrencies, it is certainly not new, having existed since 2015.

Traditionally, iota is the ninth letter of the Greek alphabet. In the English language, it denotes an extremely small amount of something, sometimes used as a figure of speech for emphasis. This cryptocurrency, however, takes its name from IoT, the acronym for the “Internet of Things”. The Internet of Things refers to the network of vehicles, home appliances and physical devices which employ complex electronics, sensors and software to collect and exchange data on the Internet. Growing exponentially, the IoT enables physical objects to be integrated into computer-based systems, creating things like intelligent transportation, smart homes and even smart cities. With its specialization, IOTA aims to become the backbone of this interconnected world, primarily by allowing companies and businesses to share technological resources as potential services in real time and with no fees. Read on and see how it aims to do that.

IOTA basics and benefits

IOTA is a new and revolutionary public distributed ledger. Although a player on the cryptocurrency market, it is merely similar in concept to blockchain technology. Instead of blocks, chains and miners, it uses a completely new data structure called “Tangle”, based on a Directed Acyclic Graph.

Since there is no iota blockchain, the transactions are not confirmed through mining. The consensus is instead reached by direct participation from end-users. Before making a transaction, participants confirm two previous transactions.

The fact that the whole network participates in reaching a consensus enables a variety of unique features compared to blockchain technology currently prevalent on the cryptocurrency market.

IOTA Features

IOTA Features

For starters, this cryptocurrency enables virtually unlimited growth and scalability, allowing for a large number of transactions to be confirmed in a short time frame. As mentioned above, everyone confirms transactions before making one, meaning that, unlike with blockchain technology, the confirmation rate increases parallel to the demand for transactions. As a consequence, there are no transaction fees; the only drawback is the short amount of time it takes to confirm a past transaction. And since there is no such thing as an IOTA blockchain, there are no miners, meaning that it is completely decentralized.

The extremely small amount denotation is actually applicable when talking about this cryptocurrency. Due to its unique architecture, it enables true micro and even nano-transactions for the first time ever, potentially leading to perfect interoperability of all connected devices.

How to buy IOTA?

The IOTA cryptocurrency does not have merely one wallet. Instead, if you want to buy some mIOTAs, you can choose a customized wallet or node that fits your specific needs, whether you are looking for just a small taste of the cryptocurrency market or more complex features like smart contracts.

Some of the wallet options include:

  • Light Wallet: The simplest way to participate in the cryptocurrency exchange for IOTA. It is a local interface that remotely accesses a full node, for example on a server.
  • Full Node: Requires a static IP, as well as a stable connection to neighbors.
  • Headless Node: Can be accessed through an easy-to-use user interface for your browser, called Nostalgia. The requirements are the same as for the Full Node, but it has the advantage of allowing you to open multiple accounts.

All of the information regarding token price, where to buy it, wallet releases, updates etc. can be obtained from the official Slack-Channel at slack.iotatoken.com.

IOTA Tangle

IOTA Tangle

Which exchanges support trading IOTA?

There are several big names on the cryptocurrency market that trade IOTA, primarily Bitfinex and Binance. For the time being, IOTA can be exchanged for Bitcoin and Ether coins. Most cryptocurrency prices are soaring, and IOTA is no exception. As reported by several outlets, IOTA has recently been taking the cryptocurrency market by storm, overtaking both Litecoin and Ripple at one point to secure its spot as the fourth cryptocurrency based on market capitalization, behind Bitcoin, Ethereum and Bitcoin Cash.

However, IOTA’s growth has less to do with market speculation and more to do with its potential to become the main currency for creating a decentralized and unified online marketplace. With no delays, fees and the ability to use smart contracts, this potential is limitless.

With its unique focus on the Internet of Things and its strong business connections with companies that include Microsoft, Volkswagen, Cisco Systems and Fujitsu all aboard the new project, the IOTA cryptocurrency is perhaps the most promising challenger on the cryptocurrency market.

IOTA Exchanges

IOTA Exchanges

Why is IOTA better than bitcoin and other cryptocurrencies?

Without an actual IOTA blockchain, the speed of the system grows as the number of transactions grows, not the other way around, completely bypassing the issue of scalability and transactions fees that plague Bitcoin and other cryptocurrencies using blockchain technology.

In addition, the creators behind IOTA have worked hard to forge strong industrial partnerships that ensure that the IOTA value is not the only thing that drives people to buy IOTA. Instead, it will have practical use, nut just as a speculative asset in a fragile bubble with people betting on the IOTA price.

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Author: Ben Prescott
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