What is cryptocurrency IOTA and how does it work?

What is IOTA (MIOTA)?

IOTA is an open-source, scalable distributed ledger that was created to enable seamless value and data transfer between humans and machines. The project was built for the next generation of the digital revolution called the Internet of Everything. IOTA features feeless transactions, tamper-proof data, as well as low resource demand. Its network can power the Internet of Things (IoT) without heavy infrastructure investment requirements.

IOTA aims to play a crucial role in the next industrial revolution, which will require the creation and maintenance of machine economies – as well as financial relation handling between machines and humans. MIOTA is the coin powering this new digital economy.

How Does IOTA Work?

IOTA has, unlike blockchain-based cryptocurrencies, proposed a different data structure called Tangle. This type of structure stores and manages numeric representations in a unique manner. It allows the IOTA network to overcome Bitcoin’s scalability issue by removing the topographical hurdles and typical limitations associated with using “traditional” blockchain.

Similar to XRP, IOTA’s tokens are pre-mined, while its transactions are validated using Tangle, a Decentralised Acyclic Graph (DAG). DAGs are a new mathematical concept that have a truly exciting application when applied to existing blockchain tech.

While some other blockchains can be considered DAGs, they don’t have the same parallel system utilized by IOTA.

Unlike other blockchains, IOTA’s Tangle network transactions can be processed simultaneously – they aren’t bound to follow a sequential order where unconfirmed transactions are stored in a queue. Additionally, IOTA has been designed in such a way that as Tangle gets more nodes, the network will become more and more efficient and secure.

IOTA’s system is proposed to be cheaper, more efficient, and less power-hungry than traditional blockchain-based systems, as Tangle doesn’t require full node miners.

Who Are The Founders of IOTA? (History of IOTA)

IOTA was co-founded by David Sonstebo, Dominik Schiener, Dr. Serguei Popov, and Serge Ivancheglo in 2015. It was created as a specialized peer-to-peer distributed ledger. Its primary objective was (and still is) to democratize and power the Internet of Things (IoT).

The IOTA network – and its Tangle technology – has been designed to deliver secure payments and communications with no transaction fees, regardless of the size. Another benefit of its design is that the validation process is almost instantaneous. Theoretically, the system can verify an unlimited number of transactions per second.

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IOTA Foundation

In 2017, early IOTA investors donated 5% of the total token supply to continue the project’s development and to create what later became the IOTA Foundation. Officially established in 2018, the IOTA Foundation’s goal was to assist in the research and development, education, as well as standardization of the IOTA technology.

The IOTA Foundation is a board member of the International Association for Trusted Blockchain Applications (INATBA) as well as the founding member of the trusted-IoT alliance and mobility open blockchain initiative (MOBI).

Following a dispute between IOTA co-founders David Sønstebø and Sergey Ivancheglo, Ivancheglo resigned from the IOTA board of directors on 23 June 2019. On 10 December 2020, the IOTA Foundation Board of Directors and Supervisory Board made an announcement that the Foundation officially parted ways with the co-founder David Sønstebø.

What Makes IOTA Unique?

IOTA is a project that has become synonymous with the word unique – and its reimagined blockchain tech Tangle speaks volumes to that.

Both the value proposition and business plan of IOTA differ greatly from other blockchain-based cryptocurrencies, which bring both a lot of praise and animosity to the project.

What Gives IOTA Value?

When it comes to its value proposition, IOTA derives value from what it offers to its users: feeless transactions, almost-instant transaction validation, as well as unlimited scaling potential. There are many other benefits to IOTAs design, such as being less power-hungry than most other cryptocurrencies. These features all contribute to the vast amount of versatility and functionality found within the IOTA network.

Though many of the groundbreaking features of IOTA are considered to just be “potential” – due to the current underutilization of the network (in terms of users) – the low entry price of the MIOTA coin, along with the incredible features locked within this network, can be very attractive to investors.

How Many IOTA (MIOTA) Coins Are There In Circulation?

IOTA (MIOTA) was first launched through an ICO, where it raised 1300 BTC from investors. When translated into USD, this amount of Bitcoin corresponded to approximately $500,000 at that time.

IOTA’s native token, MIOTA, was created with a maximum supply of 2,779,530,283, with the complete maximum supply being distributed to the investors. 5% of the total supply was granted to further the development of IOTA and establish the IOTA Foundation, but this was agreed upon by the participants in the network (the investors).

IOTA (MIOTA) is, at the time of writing, holding the 25th spot in the top market cap cryptocurrency list, with its current value sitting at $3.51 billion.

Other Technical Data

IOTA reached its current all-time high of $5.27 in December 2017. Though the price has struggled since, especially in the overall market conditions seen after December of 2017 (read: bear market), MIOTA is now rising in price and slowly gaining momentum as the crypto sector gains more popularity.

How is The IOTA Network Secured?

IOTA’s network is fully decentralized and theoretically secure. The network ensures the validity and authenticity of all the data being exchanged on the network. The IOTA network is also considered tamper-proof.

How To Use IOTA?

While IOTA is considered a currently-underutilized project, it has some very interesting use cases.

In January of 2018, Taipei and the IOTA Foundation signed an agreement to begin using IOTA and its Tangle tech to transform the capital city of Taiwan into a cutting-edge smart city. With the capability to run an entire city, IOTA is a project that could attain a form of “mass adoption” at an infrastructure level.

The cryptocurrency is also used by projects such as Elaadnl, Ehealth, Volkswagen, etc. However, while IOTA has some fascinating applications in the public, institutional, and industrial sectors, it has not found adoption by retail users just yet.

How To Choose an IOTA Wallet?

While IOTA is a well-known cryptocurrency, it isn’t as supported as other large cryptocurrencies due to its non-blockchain structure. There are, however, more than enough wallets to pick and choose from. Each user, depending on their needs, must determine the wallet that’s right for them.

Kriptomat offers a secure storage solution, allowing you to both store and trade your MIOTA tokens without much hassle. Storing your MIOTA with Kriptomat provides you with enterprise-grade security and user-friendly functionality.

Buying and selling MIOTA, or exchanging them for any other cryptocurrency, is done in mere moments when you store on our platform.

The Bottom Line

IOTA is a very unique cryptocurrency project that differs from the norm in the industry. Investors that love pondering the future of smart cities and industrial revolutions should certainly take a look at this project.

Though it hasn’t happened yet, IOTA may also become a very attractive payment option for end-users due to its feeless, almost instant, and tamper-proof transactions.

IOTA FAQ

How to Buy IOTA?

Buying IOTA (MIOTA) is as easy as visiting our guide on how to buy IOTA.

How to Sell IOTA?

If you already own IOTA and hold it on a Kriptomat exchange wallet, you can easily sell it by navigating the interface and choosing your desired payment option.

IOTA Price

The current IOTA price is 1472.38 EUR.

The 24-hour trading volume of IOTA is 30,976,225,921.38 EUR. IOTA is currently ranked #7 of all cryptocurrencies by total market capitalization, with a market cap of 168,516,155,359.00 EUR. It has a circulating supply of 30,976,225,921.38 IOTA.

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