A couple of years ago, the idea of self-driving cars, smart homes, smart finance or intelligent drones was just something we could only see, and experience through movies. Now, with the rise of AI (artificial intelligence), cryptocurrencies or the Internet of Things (IoT) it seems that those SF scenarios are coming to life.
In 2009, an unknown person or group of people under the pseudonym Satoshi Nakamoto released the Bitcoin cryptocurrency. This digital currency is independent and decentralized, meaning that nobody can have total control over it. Transactions can be made on personal computers in a public distributed ledger called blockchain.
Since then we have witnessed a boom in cryptocurrencies (altcoins) and saw an exponential growth in interest from people all over the world.
Since its inception, the Bitcoin cryptocurrency faced a few major problems, such as:
Although IOTA is considered an altcoin, there is much more to it than that.
First of all, IOTA doesn’t rely on blocks in a blockchain; it is rather an extension of the blockchain ecosystem. Iota works with Tangle.
Tangle is based on the same principle of a public distributed ledger and also ensures secured and transparent transactions. The difference is that Tangle uses Directed Acyclic Graph (DAG) instead of blocks.
Here are some of the main improvements that DAG brings:
Almost Perfect, Isn’t It?
With IOTA there is no need for other nodes in the blockchain to check the transaction because the user and the validators are the same. Thus, every transaction creates a block that is verified by itself. Every new transaction can, thus, verify two transactions in the blockchain, so the scalability is endless with zero cost as opposed to Bitcoin cryptocurrency.
Smart this and smart that becomes Smart Everything and the Internet of Things becomes the Internet of Everything (IoE). Right now we are witnessing an increased demand for smart devices development.
That is where IOTA plays a huge role: it allows devices to communicate, connect, and evolve and that implies a considerable amount of data. However, due to its software, IOTA could allow more transactions than Bitcoin or other cryptocurrencies.
The purpose of IOTA is to solve the problem of interoperability. It is an open source project based on the idea of communication between machines that can transfer data securely, on-demand and with minimal resources.
IOTA closes the gap in the cryptocurrency market. And, it looks very promising as there will be no fees. Moreover, IOTA is in the TOP 10 cryptocurrencies by market capitalization.