If you are a lover of cryptocurrency, blockchain, and efficiency, this is about to hit all your right spots.
IOTA (pronounced eye-oh-tah), launched in 2016 is a cryptocurrency with a huge edge above all others. So you’ve heard about bitcoin, steemdollar, litecoin, monero and all the rest. But unlike any of these centralized cryptocurrencies, IOTA is an open source distribution ledger that is built to fuel the future of the IoT (internet of things).
This cryptocurrency is devoid of the blockchain system and works under a new principle called the Tangle. This principle is superior to blockchain and is devoid of all the limitations experienced in the latter.
IOTA uses a directed acyclic graph to store transactions on its ledger, motivated by a potentially higher scalability over blockchain based distributed ledgers. IOTA does not use miners to validate transactions, instead, users that issue a new transaction must approve two previous transactions and perform a small amount of proof of work.Transactions can therefore be issued without fees, facilitating microtransactions.
IOTA’s Tangle Principle
Tangle is based on directed acyclic graphs, a mathematical concept that once applied removes the need for cryptocurrency miners without any detrimental effect to decentralization.
As you know, the removal of miners leads to the removal of transaction fees thus enabling accurate microtransactions. IOTA is free to use, sounds too good to be true but that’s precisely what it is, and there’s more. Everyone in this network is equal and plays equal roles.
Whenever there is a transaction on the platform, its issuer must help in authentication to previous and other random transactions.
The Purpose Of IOTA?
The purpose of IOTA is to support and power a machine to machine economy. This means that your phone, television, dryer, computer amongst other things will be able to relay information to one another with or without you, the user. This is done to increase their efficiencies and ultimately make your life much easier through the underlying protocol that is IOTA.
Simply put, IOTA is the money your machines and gadgets will use for this interaction, and through this economy, your life will significantly improve.
The IOTA network can be assessed and utilized via any smart device. Bitcoin amongst other cryptocurrencies face limitations during micro transactions due to their need for miners.
Also as an opposition to these cryptocurrencies which networks slow down when multiple users are involved, IOTA is known to speed up with an increase in its number of users. It is very scalable as its usability increases with an increase in users. This ultimately alleviates all issues these blockchain based decentralized cryptocurrencies face every day.
IOTA is known to solve issues that other cryptocurrencies can’t. Its absence of blocks increases its TPS making it faster than bitcoin.
The future of IOTA
With all its advantages over other blockchain cryptocurrencies, its future is undoubtedly auspicious, but when dealing with these decentralized exchange mediums, one knows better than to predict its outcome fully. This is because of their market’s volatility.
But as a trader, to fully maximize on IOTA the only strategy is to buy low and sell high. Also before this is done, one should thoroughly research its possibilities and limitations (if any) before making any drastic trading decisions.
In Conclusion
IOTA’s superiority in its technology and sustainability makes easily it the best pick which will render other mediums obsolete. Although this is an excellent improvement over others, its effects can be drastic in the economic decline in world countries. This is why nations need to tread carefully with IOTA.