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” (ie gadgets) in real time. The IOTA payment architecture was developed on the basis of the machine-to-machine (M2M) system and is aimed solely at conducting transactions on the Internet of Things. The uniqueness of the cryptocurrency and its one of the most important differences from other coins is that it allows you to make micro-transactions (at least $ 0,001) without paying a fee for processing the payment.
  • To become the basis of the future industrial revolution, which will consist in the massive use of the Internet of Things. The IOTA project has been publicly supported by well-known crypto exchanges, as well as some large corporations.

Briefly explain what the Internet of Things is. 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), which can be controlled using smartphones, tablets or PCs .

In the long run, IOTA can bring to life the creation of such projects as smart cities, homes, and transportation systems.

History of creation

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

The topic of discussion of the project on bitcointalk was created on October 21, 2015. However, the initial idea arose even earlier - in 2014, when Sergey 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 the IOTA ICO, a beta period began, which ended only by the end of 2016. Although in the beta testing process IOTA already functioned as a platform for micro-payments, the cryptocurrency itself could only be bought “on hand”. Listing on exchanges and exchangers was postponed until the beta testing period is over and a full-fledged product is presented.

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

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

Team

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

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

The main IOTA team has 34 specialists, many of whom have experience in large companies.

Technology

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

What is a Tangle?

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

In simpler terms, cryptocurrencies (including IOTA), whose work is based on 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 issued in the genesis block, the total amount is 2,779 × 1015 IOTA).

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

IOTA имеет совершенно другую архитектуру по сравнению с обычными криптовалютами, работающими на блокчейне. В частности, консенсус здесь достигается не посредством майнинга, а совершенно другим способом. В системе IOTA каждый пользователь должен подтвердить две предыдущие транзакции, прежде чем он сможет отправить платеж. В обычных криптовалютах, основанных на блокчейне, данную функцию выполняют майнейнеры, работающие по алгоритму Proof-of-Work. Однако система работы IOTA примечательна тем, что каждый пользователь вносит свой вклад в верификацию транзакций и систему безопасности. Транзакции проверяются несколько раз разными пользователями, что позволяет системе определять каждую из транзакций как действительную.

The transaction verification process occurs as follows:

  • The node selects two transactions for verification (usually these are the last two transactions);
  • After the transactions are verified for the absence of conflicts, they are confirmed by the node;
  • The node should solve a cryptographic problem similar to puzzles in the Bitcoin blockchain (you need to find 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 presence of nodes responsible for checking 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, as it can solve one of the main problems of digital currencies - the complexity of the application for daily payments. She also has a number of other advantages:

  • Great prospects for the Internet of Things market - IOTA was developed specifically for use in 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.
  • There is no connection to the Internet - the system is designed in such a way that for making payments there is no need for an Internet connection. 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 the cryptocurrency.

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

  • Неограниченная масштабируемость сети — поскольку благодаря особенностям алгоритма Tangle за отправку каждой транзакции пользователь должен проверить две транзакции, что позволяет создать условия, при которых узлов, обеспечивающих верификацию, больше, чем транзакций. Это означает, что сеть IOTA масштабируется пропорционально количеству транзакций. Для проверки этих двух транзакций устройство должно выполнить ту же работу, что выполняют майнеры в условиях алгоритма «Proof-of-Work». Также в системе Tangle отсутствует такое понятие как сложность, поэтому проверку транзакций можно выполнять, даже используя обычный смартфон или ноутбук.
  • Fast transactions - transaction confirmation and delivery times are inversely proportional to the number of transactions, i.e. the more transactions are sent, the faster they will be confirmed. When IOTA reaches mass adoption of the Internet of Things ecosystem, transactions will be instant.
  • Lack of commissions - since the Tangle technology does not imply 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 emissions - all IOTA coins were originally created in a genesis block - their number will never increase or decrease. The total number is 2,779 × 1015 IOTA.
  • Resistance to quantum attacks - the creators of the project claim that IOTA is resistant to 51% attack, which can be carried out using quantum computers, due to the fact that the cryptocurrency is created on a balanced ternary computing system instead of the usual binary ones that modern computers work with.

However, IOTA, like any other cryptocurrency, is not ideal now and has a number of disadvantages:

  • The presence of a “coordinator” - the so-called “coordinator” is built into the IOTA system, designed to combat cyber attacks, control the confirmation of transactions and ensure stable operation of the network. This contradicts all the laws of decentralized cryptocurrencies, since the coordinator code is closed and centralized. However, it is assumed that the “coordinator” will be removed from the system as soon as the network becomes large enough to ensure security and reliability.
  • The high probability of a 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 minus. 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.
  • The difficulties associated with using ternary computing instead of binary - since the IOTA system works on modern equipment (based on binary computing), and the cryptocurrency code is written on ternary computing, all ternary values ​​must be converted to binary code, which requires additional power for data storage. In addition, the use of ternary computing has caused bugs in Curl (IOTA hash function).
  • The technology of smart contracts 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 you to conclude smart contracts. However, the developers claim that by the end of 2018 this opportunity will appear.
  • Imperfection of the original wallet - for IOTA, an original local wallet was developed, which can be downloaded for PC (Windows, Mac OS, Linux), however, only beta versions are currently available for mobile OS (Android, iOS). The bulk of users store this cryptocurrency on popular exchanges that have built-in wallets.

Interesting

IOTA Foundation

The IOTA Foundation is the first German nonprofit organization funded exclusively through cryptocurrency. 5% of the proceeds from the IOTA ICO were allocated for the creation of the fund. However, at the moment there is no open access to information on where the fund takes funds to finance ongoing events.

IOTA Foundation performs the following functions:

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

Cooperation

Thanks to the use of unique technology, IOTA 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 - in December last year, the company invested heavily in the project, becoming interested in the prospects of this cryptocurrency. Using the technologies that IOTA offers, Bosch wants to achieve the complete autonomy of its cars.
  • Volkswagen - in the early summer of 2018 there was news that IOTA concluded a cooperation agreement with a large German concern. In addition, companies within the framework of this cooperation are working on a new project based on the Proof-of-Concept algorithm.
  • Innogy SE is a German energy company that is actively introducing innovative technologies. Cooperation implies a revolution in the transport system, for example, work is carried out in such areas, automatic payment for travel with cryptocurrency when boarding a vehicle or energy metering using the 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 - Norway's largest bank and IOTA will work together to develop distributed ledger technology for the financial sector.

Units

IOTA from Greek translates as "iota" - the letter of the Greek alphabet. In the ecosystem of the 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 development of technology

CognIOTA - machine learning service

It should be said right away that CognIOTA is not a cryptocurrency, but a service that will work on the basis of Tangle and use IOTA cryptocurrency. The first mention of CognIOTA appeared in September 2017. The platform will be a decentralized machine learning service built on the basis of 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 for IOTA in real time. The founder of IOTA, David Sonstebe, said the following: “The goal is to get mining pools to switch to providing a useful service (Machine Learning) paid through Iota. Nowadays, the competition of mining farms is intensifying, so this is a win-win option. ”

Masked Authenticated Messaging - Communication Protocol

Masked Authenticated Messaging (MAM) — это экспериментальная разработка IOTA, которая представляет собой особый вид протокола второго уровня для обмена данными (например, RSS) путем использования технологии распределенного реестра Tangle. При этом в отличие от технологии блокчейна, которая имеет такое понятие как сложность сети, что требует применения компьютеров с высокой вычислительной мощностью, MAM может использоваться на любом устройстве, даже на смартфоне или ноутбуке. Протокол Tangle делает потоки сообщений более надежными и проверенными. Пользователям лишь требуется подтвердить достоверность при помощи вычислительной мощности гаджетов.

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

Flash channels - instant payment technology

Flash-каналы (Flash Channels) — это протокол второго уровня, который обеспечивает отправку большого количества транзакций, что позволяет достигнуть мгновенного подтверждения. На первый взгляд эта разработки в направлении данной технологии могут показаться излишними, учитывая то, что Tangle позволяет достигнуть абсолютной масштабируемости, однако в основе Flash Channels лежит совсем другой тип платежей. Например, данная технология позволит оплачивать зарядку электрокара за каждую секунду пребывания машины на электрозаправке. Для этого пользователь должен иметь на счету некоторое количество MIOTA и открывать параллельные каналы, которые будут моментально подтверждать транзакции, а потом отправлять их в единый реестр Tangle.

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

Course and capitalization. Where to buy

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

The graph of the cost and capitalization of IOTA (MIOTA) over the past six months looks like this:

Like most altcoins, IOTA (MIOTA), having reached a peak price of $ 5,23 for its entire existence, began a smooth "decline" in January 2018. Those. At the moment, the price of cryptocurrency has fallen by more than 9,5 times compared to the peak mark.

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

Development prospects

В основе IOTA лежит уникальная технология, которая отличает ее от других криптовалют. Кроме того, проект имеет узкую ориентацию на Интернет Вещей, которому пророчат большое будущее. Уже на данном этапе развития криптовалюта может стать основным платежным инструментом Internet of Things, также, команда ведет активные работы по улучшению монеты и разработке новых возможностей (например, Flash Channels). Команда IOTA состоит из специалистов, которые имеют большой опыт в разработке продуктов, предназначенных для использования в финансовой и банковской сфере. Кроме того, основатели уже имеют успешные проекты, поэтому можно с уверенностью сказать, по крайней мере то, что IOTA — это реальный продукт, создатели которого заинтересованы в дальнейшем развитии и продвижении технологии.

Однако даже такая уникальная монета как ИОТА имеет свои недостатки. Во-первых, в виду использования тернарных вычислений монеты имеет сложный алгоритм работы, так как пока что все компьютерные устройства основаны на бинарных вычислениях. Такая сложная система может привести к многочисленным багам и ошибкам в процессе перехода к массовому внедрению технологии IOTA. Специалисты в области криптовалют и блокчейна (в частности разработчики Ethereum) уже высказывали критику в адрес IOTA, ссылаясь на нерациональное использование системы тернарных вычислений.

There are also some questions regarding the distribution of coins. There are 2 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 lots of cryptocurrency. Therefore, it is likely that certain groups of people own a large number of coins, sufficient to manipulate the course and may dictate their rules to the IOTA market.

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