Designed to become the token that will harness the power of the Internet of Things (IoT), the IOTA coin is a currency that aims to provide free and permissionless transactions. Moreover, these transactions can be easily accessed by anyone through the use of their devices such as smartphones, tablets, and computers.
Introduced by the IOTA Foundation, a non-profit organization, the company has collaborated with popular companies such as Bosch and Volkswagen.
The IOTA coin is not your regular cryptocurrency because unlike Bitcoin and other altcoins, it runs on Direct Acrylic Graphic technology called the Tangle. What IOTA does is connect different devices in the Internet of Things and execute crypto transactions claimed to be faster and more scalable than any other cryptocurrencies that run on a blockchain.
IOTA: How does it work?
In a hyperconnected digital village, billions of devices are now connected through the chips embedded in them. This can then be used to exchange data with any other device connected to the internet.
Because of the convergence of high-tech devices, all the signal, sensor, and analytics they receive contribute to the ever-growing information in the Internet of Things.
What the IOTA does is act as a bridge that can execute transactions across devices. This means that everyone who wants to access the information on the ledger will be able to utilise it.
The creators of IOTA envisioned to create a more robust asset that can address the issues faced by digital currencies that run on regular blockchains. Some of the most common crypto problems include mining, scalability, centralization, and slow processing of transactions.
Issues that arise in regular blockchains are due to the inability of blocks to expand and the taxing set of mathematical codes to be solved for transaction verification. What the IOTA does is reconstruct the framework of the blockchain into a web of information called Tangle.
IOTA: Inside the Tangle network
Instead of using a standard blockchain, the IOTA uses Tangle, which is a reconfigured version of the ledger. What this new network does is eliminate the presence of miners and allows near-infinite scalability. This removes the long waiting time for a request to be confirmed.
When a transaction goes through Tangle, it must also process two other transfers before it can come through the network. Moreover, it needs proof of work but there’s no need to solve a complex algorithm so any device is capable of handling it.
Since there are no miners present, the fees in maintaining the network are removed, making it free and accessible to anyone.
Aside from the near-infinite scaling and the absence of miners, Tangle is also quantum-proof. It uses a hash-based signature that allows more seamless and faster processing of transfers in the network.
Sites and Nodes
Inside Tangle, there are sites and nodes that issue the transactions within the network. Meanwhile, the sites are the transactions linked together by these nodes.
For a transaction to be verified, the nodes must process two previous requests that allow the network’s function to expand further because it connects more devices inside Tangle. Nodes are incentivized for their work and are also apprehended by their fellow validators if they fail to process the minimum amount of transactions.
MAM (Masked Authenticated Messaging)
One of IOTA’s core functions is the Masked Authenticated Messaging or MAM. This feature allows the nodes in the network to communicate seamlessly with each other through encrypted channels.
Additionally, people within the network can also share information without compromising the safety of the whole network.
What do experts say about IOTA?
IOTA is still in its infancy and still has a lot to improve on, so it’s still too early to say how it will fare in the long run. A lot of experts in the crypto sphere have their share of mixed feelings towards the new technology it offers.
According to a review from MIT, IOTA can outperform Bitcoin, however, some people from the MIT media lab rallied against this statement and said that the statement was incorrect and said that the IOTA protocol is vulnerable to attacks and breaches because of its weak code.
Despite the MIT addressing the issue, the MIT team said that IOTA beats the purpose of decentralization. Meanwhile, tech expert and security specialist Bruce Schneir said that IOTA is leaving itself vulnerable to attacks because of its weak cryptography algorithm.
Should you invest in IOTA?
As mentioned earlier, IOTA is still a fledgling crypto coin that still has to prove its worth in the industry. Despite the adversarial sentiments surrounding its technology, it is still an asset worth investing in because it offers an alternative for crypto users who want to explore more digital assets.
Additionally, IOTA also improved in the latter part of 2020 when its market capitalization surged up to US$446 million. It then climbed up further to more than US$900 million on December 19, 2020. Currently, IOTA’s market capitalization is at US$3.21 billion.
Where to purchase IOTA coin
Here are some of the crypto exchange sites where you can purchase IOTA tokens:
Coinbase is one of the top crypto exchange sites in the market. In this platform, you can purchase IOTA coins along with major tokens such as Bitcoin, Ethereum, Ripple, and Litecoin. Additionally, you can also convert your crypto coins to USD.
Kraken is a US-based exchange established in 2011. Currently, it is one of the biggest crypto exchanges in the world that offers a wide selection of crypto tokens in its portfolio.
Additionally, it is available in 48 states in the US and 176 countries across the world. Kraken also posts articles on new and existing cryptocurrencies that can help beginners become more familiar with digital assets.