What you need to know about IOTA (MIOTA) cryptocurrency

IOTA (MIOTA) is a project created by German developers. It is a cryptocurrency developed on the basis of a distributed registry designed specifically for use in the Internet of Things (IoT) system.

Interesting fact! The abbreviation MIOTA stands for Millions of IOTA or Mega IOTA.

The main objectives and goals of this cryptocurrency are:

  • Ensuring secure transactions between “things” (i.e. gadgets) in real time. The IOTA payment architecture was developed based on the “machine-to-machine (M2M)” system and is aimed exclusively at conducting transactions on the Internet of Things. The uniqueness of cryptocurrency and its one of the main differences from other coins is that it allows you to perform micro-transactions (at least $ 0,001) without paying a payment processing fee.
  • Become the basis of the future industrial revolution, which will be the massive use of the Internet of Things. The IOTA project was publicly supported by well-known cryptobirds, as well as some large corporations.

Briefly explain what the Internet of Things. Internet of Things (Internet of Things) - in the future it will be a network of physical devices (gadgets), cars, household appliances (for example, refrigerators, freezers, heating systems, smart devices) that can be controlled using smartphones, tablets or PCs .

In the long term, IOTA can realize the creation of such projects as “smart” cities, houses, transport systems.

History of creation

The history of IOTA began in 2015 with the ICO, which lasted from November 24 to December 20 2015. Then the team managed to attract 934 BTC (about $ 420000 in dollar equivalent). Despite the fact that now it does not seem such a great achievement, then it was a great result, since the ICO culture was not as developed as it is now, and crypto-enthusasts invested more in new crypto-projects.

The topic of the discussion on the bitcointalk project was created on October 21 of the year 2015. However, the initial idea arose even earlier - in 2014, when Sergei Ivancheglo developed a new type of microprocessor called JINN, whose work is based on tertiary calculations. According to unconfirmed reports, JINN was later integrated into IOTA.

After the end of ICO IOTA, the beta testing period began, which ended only by the end of 2016. Although in the process of beta testing, IOTA already functioned as a platform for micro-payments, the cryptocurrency itself could only be bought from the hands. Listing on exchanges and exchangers was postponed until the moment when the beta testing period is over and a full product is presented.

This happened in 2017 in June of this year, one of the most popular exchanges Bitfinex added trading pairs BTC / IOTA, ETH / IOTA. The team presented a working payment system, which contributed to the listing of cryptocurrency on most of the popular cryptocurrency.

Despite the popularity of the coin and its relevance among investors, the team continues to work actively to improve the technology.

Team

IOTA was developed by experts in the field of mathematics, computer science and high technology:

  • David Sønstebø is a high-tech entrepreneur. He actively participates in the development of IoT, blockchain technologies, distributed registries, smart cities, and digital states.
  • Dominik Schiener is a young developer (1995, born in Italy). From early youth he was interested in blockchain technologies. He believes that the blockchain and cryptocurrencies should be considered not as a way to get quick and easy money, but as a tool for solving daily problems.
  • Sergey Ivancheglo (Sergey Ivancheglo, in cryptospace is known by the nickname Come-from-Beyond) is an electrical engineer, software engineer, founder and creator of the Nxt project and co-founder of Jinn Labs.
  • Sergey Popov (Serguei Popov) - Doctor of Mathematical Sciences, specializing in the theory of probability. It was he who developed the mathematical basis of Tangle for the IOTA project. In his free time, he enjoys mountaineering, playing chess and music from the direction of "heavy metal".
  • Ralph Rothmann (Ralf Rottmann) is a serial entrepreneur who sold the company to Alcatel-Lucent and, with the money, opened the grandcentrix in Germany, an association dedicated to the development of the Internet of Things industry.

The core IOTA team consists of an 34 specialist, many of whom have experience in large companies.

Technology

It should immediately be said that the technology on which IOTA’s work is based is different from the principle of operation of any other cryptocurrency operating on the blockchain. Simply put, IOTA does not use blockchain, but a special technology called Tangle.

What is Tangle?

Tangle is a distributed registry technology based on a directed acyclic graph (directed acyclic graph (DAG)), which involves the development in one direction - from older transactions to newer ones.

More simply, cryptocurrencies (including IOTA), whose work is based on the DAG, have the following features:

  • There is no process to create blocks;
  • Do not have a blockchain;
  • There is no mining process (all IOTA coins were emitted in the genesis block, the total number is 2,779 × 1015 IOTA).

At the moment, only three cryptocurrencies use DAG as the base - IOTA, DagCoin, ByteBall.

IOTA has a completely different architecture compared to conventional cryptocurrencies that work on the blockchain. In particular, the consensus here is not achieved by mining, but in a completely different way. In the IOTA system, each user must confirm two previous transactions before he can send a payment. In conventional cryptocurrencies based on the blockchain, this function is performed by the mineriners using the Proof-of-Work algorithm. However, the IOTA work system is remarkable in that each user contributes to transaction verification and security. Transactions are checked several times by different users, which allows the system to identify each of the transactions as valid.

The transaction verification process proceeds as follows:

  • The node selects two transactions for verification (usually these are the last two transactions);
  • After the transactions are verified for no conflicts, they are confirmed by the node;
  • The node must solve a cryptographic problem similar to puzzles in a Bitcoin blockchain (you need to find a nonce to get the correct hash).

This allows you to remove commissions, because instead of commissions, users “pay” with the power of their devices, confirming other transactions. In addition, the system guarantees the availability of nodes responsible for verifying transactions, since the user must confirm two transactions to send each payment. Thus, there are always twice as many nodes as transactions.

Advantages and disadvantages

Without a doubt, IOTA is one of the most promising cryptocurrencies, since it can solve one of the main problems of digital currencies - the complexity of application for daily payments. She also has a number of other advantages:

  • Great prospects for the Internet of Things - IOTA was developed directly for use on the Internet of Things, which has great potential in the future.
  • A unique project - the use of Tangle technology distinguishes this cryptocurrency from all others, which attracts the attention of not only investors, but also large companies.
  • No internet connection - the system is designed in such a way that there is no need to connect to the Internet to make payments. To manage some networks of smart devices, it will be enough to connect to the Internet once a month or even a year.
  • A strong and responsible team - unlike many other projects, the IOTA team is actively working on improving cryptocurrency.

If you compare IOTA with other cryptocurrencies, for example, with Bitcoin, then it has at least five significant advantages:

  • Unlimited scalability of the network - because, due to the peculiarities of the Tangle algorithm, the user must check two transactions for sending each transaction, which allows creating conditions under which there are more nodes providing verification than transactions. This means that the IOTA network scales in proportion to the number of transactions. To verify these two transactions, the device must perform the same work that miners perform under the Proof-of-Work algorithm. Also in the Tangle system there is no such thing as complexity, so transaction verification can be performed even using a regular smartphone or laptop.
  • Fast transactions - the time of confirmation and delivery of transactions is inversely proportional to the number of transactions, i.e. the more transactions are sent, the faster they will be confirmed. When IOTA reaches the mass introduction to the ecosystem of the Internet of Things, transactions will be instant.
  • The absence of commissions - since the Tangle technology does not involve the work of miners, there is no need to issue new coins and pay commission fees. Therefore, IOTA transactions are completely free.
  • A fixed number of coins and no emission - all IOTA coins were originally created in the genesis-block - their number will never increase or decrease. The total is 2,779 × 1015 IOTA.
  • Resistance to quantum attacks - the creators of the project claim that IOTA is resistant to the 51% attack, which can be carried out with the help of quantum computers, due to the fact that the cryptocurrency is created on a balanced ternary computing system instead of the usual binary, with which modern computers work.

However, IOTA, like any other cryptocurrency, is not perfect now and has several disadvantages:

  • The presence of a “coordinator” - the so-called “coordinator” is built into the IOTA system, designed to combat cyber attacks, monitor transaction confirmations and ensure stable network operation. This contradicts all the laws of decentralized cryptocurrencies, since the code of the coordinator is closed, and it is centralized. However, it is assumed that the “coordinator” will be removed from the system as soon as the network is large enough to ensure safety and reliability.
  • The high probability of an 51% attack by one of the nodes - the absence of miners and the traditional Proof-of-Work algorithm, in addition to the advantages described above, also carries a very serious disadvantage. Theoretically, one of the nodes can create a transaction that will collect 51% of the total network capacity, which will allow it to conduct a double-spending attack.
  • Difficulties associated with the use of ternary computing instead of binary - since the IOTA system works on modern equipment (based on binary calculations), and the cryptocurrency code is written on ternary calculations, all ternary values ​​must be converted into binary code, which requires additional power for data storage. In addition, the use of ternary calculations caused bugs in Curl (IOTA hash function).
  • Smart contract technology has not been developed - unlike most cryptocurrencies (especially those created on the Ethereum blockchain), at the moment IOTA does not have a developed technology that would allow concluding smart contracts. However, the developers claim that by the end of 2018, this opportunity will appear.
  • Imperfection of the original wallet - an original local wallet has been developed for IOTA, which can be downloaded for a PC (Windows, Mac OS, Linux), however, only beta versions are currently available for mobile OS (Android, iOS). The bulk of users keep this cryptocurrency on popular exchanges that have built-in wallets.

Interesting

IOTA Foundation

The IOTA Foundation is the first German non-profit organization that is funded exclusively through cryptocurrency. 5% of the proceeds from ICO IOTA were allocated for the creation of the fund. However, at the moment there is no public information about where the fund takes funds to finance the events held.

The IOTA Foundation performs the following functions:

  • Brand development and IOTA awareness;
  • Attracting the attention of large and promising companies working in the field of Internet of Things;
  • Arrangements and cooperation;
  • Organization of conferences dedicated to blockchain, distributed registry and Internet of Things;
  • Developing a full-fledged client for IOTA.

Cooperation

Through the use of unique technology IOTA - this is an interesting project for companies that work with IoT or want to develop in this direction. At the moment, IOTA is already cooperating with such companies:

  • Bosch - back in December last year, the company invested large funds in the project, becoming interested in the prospects of this cryptocurrency. With the help of technologies offered by IOTA, Bosch wants to achieve complete autonomy of the cars produced.
  • Volkswagen - at the beginning of the summer of 2018, there was news that IOTA had entered into a cooperation agreement with a large German concern. In addition, companies within the framework of this cooperation are working on the creation of a new project based on the Proof-of-Concept algorithm.
  • Innogy SE is a German energy company that actively implements innovative technologies. Cooperation involves a revolution in the transport system, for example, work is being done in such areas as automatic payment for cryptocurrency fare when boarding a vehicle or energy accounting using a distributed IOTA registry.
  • AUDI Think Tank - the goal of cooperation is to work towards the development of an “intelligent approach to the mobility of the future.”
  • Norwegian bank DNB - the largest bank in Norway and IOTA will work together to develop distributed registry technology for the financial sector.

Units

IOTA from Greek is translated as “iota” - the letter of the Greek alphabet. In the ecosystem of cryptocurrency IOTA (MIOTA), the smallest value is IOTA. Larger values ​​are created by adding metric consoles (Kilo, Mega, Giga, etc.) to the word "IOTA". The rate of this cryptocurrency, which is displayed on exchanges and exchangers, is based on the cost of MegaIota or Miota (Mi), i.e. million IOTA coins. Below is a table with IOTA values ​​in increasing order:

This gradation allows IOTA to be used for micropayments.

Further technology development

CognIOTA - machine learning service

Immediately, it should be said that CognIOTA is not a cryptocurrency, but a service that will operate on the Tangle base and use IOTA cryptocurrency. The first mentions of CognIOTA appeared in September 2017. The platform will be a decentralized machine learning service based on the Tangle algorithm and using IOTA as a payment system.

The goal of CognIOTA is that users who do not use computer computing devices for a certain period of time will be able to sell processor power over IOTA in real time. IOTA founder David Sonstebe said the following: “The goal is to force the mining pools to switch to providing a useful service (Machine Learning), paid for with Iota. Nowadays, mining farms are becoming more intense, so this is a win-win option. ”

Masked Authenticated Messaging - data exchange protocol

Masked Authenticated Messaging (MAM) is an experimental development of IOTA, which is a special type of second-level protocol for exchanging data (for example, RSS) by using Tangle distributed registry technology. At the same time, unlike the blockchain technology, which has such a concept as network complexity, which requires the use of computers with high computing power, MAM can be used on any device, even on a smartphone or laptop. The Tangle protocol makes message flows more reliable and proven. Users only need to confirm the accuracy of using the computing power of gadgets.

Theoretically, messages can be of any size, but preliminary tests have proven that sending large messages, such as 4K video, can put a heavy load on the network and cause a delay in the confirmation of transactions.

Flash Channels - Instant Payment Technology

Flash Channels (Flash Channels) is a second-level protocol that provides for sending a large number of transactions, which allows instant confirmation to be achieved. At first glance, this development in the direction of this technology may seem redundant, given that Tangle allows you to achieve absolute scalability, but the Flash Channels are based on a completely different type of payments. For example, this technology will allow you to pay for the charging of an electric vehicle for each second of the car’s stay at an electric refueling station. To do this, the user must have on the account a certain number of MIOTA and open parallel channels, which will instantly confirm transactions, and then send them to the single register Tangle.

In some ways, the Flash Channels technology is similar to Lightning Networks in a Bitcoin blockchain.

Course and capitalization. Where can I buy

At the time of this writing (end of August 2018), the cost of 1 IOTA (MIOTA) is $ 0,72, and the capitalization is slightly more than 2 billion US dollars. In the ranking of Coinmarketcap cryptocurrency takes 10-e place.

The graph of the cost and capitalization of IOTA (MIOTA) over the past six months is as follows:

Like most altcoins, IOTA (MIOTA), having reached its peak price of $ 5,23 for the entire time it was in existence, began a smooth “decline” from January onwards of 2018. Those. at the moment, the price of cryptocurrency has fallen more than 9,5 times compared with the peak mark.

Today, cryptocurrency can be bought on most major exchanges for Bitcoin, Ethereum and USDT. In addition, IOTA can be stored on the wallets of exchanges, but we do not recommend you keep a large number of coins there for a long period.

Development prospects

IOTA is based on a unique technology that distinguishes it from other cryptocurrencies. In addition, the project has a narrow focus on the Internet of Things, which is predicted to have a great future. Already at this stage in the development of a cryptocurrency, it can become the main payment tool of the Internet of Things, and the team is actively working to improve the coin and develop new features (for example, Flash Channels). The IOTA team consists of professionals who have extensive experience in the development of products intended for use in the financial and banking sector. In addition, the founders already have successful projects, so it is safe to say at least that IOTA is a real product whose creators are interested in the further development and advancement of technology.

However, even such a unique coin as IOTA has its drawbacks. Firstly, in view of the use of ternary calculations, the coin has a complex algorithm of operation, since so far all computer devices are based on binary calculations. Such a complex system can lead to numerous bugs and errors in the process of transition to the massive introduction of IOTA technology. Experts in the field of cryptocurrency and blockchain (in particular, the developers of Ethereum) have already expressed criticism of IOTA, referring to the irrational use of the ternary computing system.

Also some questions remain regarding the distribution of coins. There are 2 779 530 283 coins on the market and it remains a mystery how many of them were sold during the ICO and whether there were private sales of large quantities of cryptocurrency. Therefore, there is a possibility that certain groups of individuals own a large number of coins, sufficient to manipulate the course and may dictate their rules to the IOTA market.

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