IOTA is a blockchain platform with a unique structure that does not use miners, blocks or chains. So how does IOTA Blockchain work? What outstanding advantages does this platform have? Let's find out in the article below.
Overview of IOTA Blockchain
IOTA stands for Internet of Things Applications - an open source, licensing-free distributed ledger that facilitates inexpensive transactions and microtransactions between different devices on the internet of things. things (IoT).
IOTA uses a unique approach to solve the scalability and transaction fee problems faced by blockchain technology by completely eliminating the block and chain. Instead, the IOTA protocol is based on a different architecture called a Directed Acyclic Graph (DAG) which the creators of IOTA have renamed 'Tangle'. Unlike various blockchain technologies, IOTA does not need miners to power the network to send transactions to the ledger, the sender must confirm two previous transactions.
IOTA is a DAG-based blockchain platform designed to serve Internet of Things (IoT) applications. IOTA is a new, revolutionary data transfer and transaction solution for IoT. In a blog post discussing IOTA's roadmap, David Sonstebo described IOTA as being developed to promote a "paradigm shift" to the Internet of Things by establishing a "paradigm shift" to the Internet of Things. the de facto standard of everything". To put it simply, this cryptocurrency will enable data exchange between devices equipped with sensors in the IoT.
The use of IOTA is expected to simplify transactions and processes involving objects with sensors. A simple use case is an IOTA-enabled vending machine, which can dispense soda without the associated transaction costs and latency of bitcoin.
History of formation of IOTA Blockchain
IOTA was founded in 2015 by four founders: David Sonstebo, Dominik Schiener, Sergey Ivancheglo and Dr. Sergei Popov. The founders share a vision of creating a new type of distributed ledger technology that can support the emerging Internet of Things (IoT) ecosystem.
In June 2016, the IOTA project was officially launched through an ICO (Initial Coin Offering) that raised approximately $500,000 worth of Bitcoin. The project has attracted significant attention due to its unique architecture and zero-fee transactions. In the years that followed, IOTA continued to develop the technology and form alliances with IoT-related businesses and organizations. IOTA joined the Trusted IoT Alliance, a group of businesses and organizations dedicated to developing open standards for IoT technology, as a founding member in 2017.
At the end of 2017, IOTA experienced a massive growth in popularity and market value, with market capitalization peaking at over $15 billion. However, the project also faced criticism and scrutiny due to security vulnerabilities and issues related to the network's consensus mechanism. Since then, IOTA continues to work on developing the technology and overcoming these problems. To make the IOTA network completely decentralized, the project introduced the Coordicide project in 2019. This initiative aims to remove the centralized coordinator node from the IOTA network. Today, IOTA remains an active and growing project, with a dedicated community of developers and supporters working to push the boundaries of distributed ledger technology in the IoT ecosystem.
Solution of IOTA Blockchain
IOTA is a decentralized blockchain platform that uses the Tangle architecture to solve the scalability, cost, and security problems of traditional blockchains. Some main solutions of IOTA Blockchain include:
High scalability: Tangle can handle a much larger number of transactions than traditional blockchains. This is because Tangle is not based on creating new blocks, but instead transactions are confirmed in linear order.
Free Transactions: IOTA charges no transaction fees, which makes it an attractive option for IoT applications where low transaction costs are necessary.
Fast transactions: Tangle can confirm transactions within seconds, even when the network has many users.
Low resource requirements: Tangle is designed so that small devices such as sensors can participate. This is because Tangle does not require as many computational resources as traditional blockchains.
Encrypted data: Tangle uses encryption to protect data stored on the network. This helps ensure that data can only be accessed by authorized people.
Offline trading: Tangle allows devices to trade offline, without a network connection. This makes it ideal for IoT applications where internet connectivity is not available.
IOTA has the potential to revolutionize the way we interact with IoT devices. By solving scalability, cost, and security issues, IOTA can help create a future where IoT devices can communicate with each other securely and efficiently.
Outstanding features of IOTA Blockchain
Unlike most other cryptocurrencies that use a traditional blockchain design, IOTA developed a new platform called Tangle, which applies the mathematical concept of Directed Acyclic Graph (DAG). For its own transaction to be confirmed, each node in the DAG's Tangle network must confirm two previous transactions at other nodes. This provides two main benefits:
Eliminate Miners: Miners are not needed to confirm transactions, solving the bottleneck that can occur when transaction speed and volume are high.
The network grows with users: The more users the network has, the faster the transaction processing speed.
Unique and different points of IOTA Blockchain
Fee-free and congestion-free transactions: IOTA charges no transaction fees and claims to have fixed scaling issues such as network latency due to block congestion associated with Bitcoin.
Practical applications of IOTA: The use of IOTA is expected to simplify transactions and processes related to objects with sensors. A simple example is an IOTA-integrated vending machine, which can dispense soft drinks without the transaction costs and latency of Bitcoin.
Huge potential: IOTA promises to bring a revolutionary blockchain platform to the world of Internet of Things. Its highly scalable, inexpensive and secure enables efficient and secure data exchange between devices, opening up many new and exciting applications.
IOTA is still in development, but it has made significant progress in recent years. With its potential to solve IoT challenges, IOTA has the potential to become an important platform for the future of the Internet of Things.
Advantages and disadvantages of IOTA Blockchain:
Advantages of IOTA Blockchain:
Highly Decentralized: IOTA is a completely decentralized platform, without any coordinating nodes. This makes IOTA safer and more secure, while also helping to reduce transaction costs.
Exponential scalability: IOTA is exponentially scalable, meaning it can handle increased numbers of transactions without sacrificing performance. This is because Tangle is not based on creating new blocks, but instead transactions are confirmed in linear order.
Encrypted data: IOTA uses encryption to protect data stored on the network. This helps ensure that data can only be accessed by authorized people.
Compatible with IoT devices: IOTA is designed to be compatible with IoT devices, including devices that are small and have low processing power. This is because Tangle does not require as many computational resources as traditional blockchains.
Disadvantages of IOTA Blockchain
Security vulnerability: In February 2020, hackers stole more than $1.5 million from MIOTA. According to the report, hackers targeted a few high-value accounts, and IOTA founder David Sønstebø agreed to compensate victims with the network's tokens. The new and improved version 2.0 of IOTA aims to improve security issues.
Growth possibilities: The IOTA system is still in the early stages of development. As with many other cryptocurrencies, success depends on wider adoption of the network with an increased number of participants.
How IOTA's Blockchain works
IOTA is not a blockchain in the true sense that we often see in the cryptocurrency world. IOTA is completely different from other blockchains and operates based on the DAG system. To clearly distinguish between blockchain and DAG, we should understand that while blockchain is a chain of blocks containing transactions or information, the DAG system does not have such blocks in the distributed ledger. But what do all these technical terms mean? To find the answer, let's start decoding IOTA and how it works.
Tangle
If you have read a little about Bitcoin and other cryptocurrencies, you will know that they operate on a blockchain. Simply put, blockchain is a chain made up of digital blocks. Each block records the transactions that people make with each other. And since it is a chain, it must be built chain by chain, block after block. This means there is a limit to how fast the network can process transactions. However, IOTA is completely different. It operates on a tangle, not a string. And as you can imagine, this means things don't need to be organized and structured.
Each block can link to any other block and it does not have to wait in a queue to become the next block in the chain. The birth of IOTA led to Tangle, a protocol that moved away from the blockchain concept to embrace a new and little-known technology, DAGs or Directed Acyclic Graphs. This strange structure allows IOTA to be built on a new network diagram that is completely different from the blockchain system and technology.
If you don't know, DAG is a graph where we can identify different nodes (called vertices) linked together by chains. These chains are oriented, i.e. they have only one specific direction. But the most important thing about DAG is that if you start traversing it from point A, you will be able to traverse the entire graph until you reach point B without repeating the same path and most importantly without spinning return to point A in any way.
Simply put, a DAG can be organized in such a way that its operation is equivalent to a blockchain. That is, move in one direction and have no ability to go back to change or edit data. Surprising, right? We can then see that the DAG works like a blockchain, just in a slightly unique way. DAGS also offers several advantages, and Tangle knows how to use them. For example, thanks to Tangle and its structure on DAG there are no blocks in IOTA. So, the important information compression unit that we see on blockchain is completely gone in this project.
There is no block, no blockchain and this tells us about how IOTA works completely differently. The changes go beyond just removing blocks, as miners and their role in the network are redundant. So we understand that Tangle creates a structure without blocks or miners. But how does the network work? How do you process and validate transactions and how secure is this?
The answer is simple, Tangle uses DAG to turn it into an improved version of blockchain. This structure (DAG) allows Tangle to build two new concepts:
Place: Nothing more than the transactions represented in the DAG.
Nodes: These are the people who issue and validate each transaction.
So, puts are part of the graph that makes up the Tangle (part of the DAG), containing one or several interrelated transactions. Nodes are all qualified users of IOTA to issue transactions, while also validating two previous transactions on the network.
Advantages and disadvantages of the Tangle consensus process
Advantages of the Tangle consensus process:
High scalability: Tangle can handle increased transaction volumes without sacrificing performance.
Low costs: Tangle requires no transaction fees.
Strong security: Tangle uses encryption to protect data stored on the network.
Disadvantages of the Tangle consensus process
Complexity: Tangle is a complex system that can be difficult for new users to understand.
Decentralization: Tangle is a completely decentralized system, without any coordinating nodes, which can make the network vulnerable to attacks.
The Tangle consensus process is an innovative solution to the scalability, cost, and security problems of blockchain. However, this process also has some disadvantages, which need to be researched and resolved in the future.
Applications developed on the IOTA Blockchain
IOTA is a decentralized blockchain platform designed to solve the challenges of IoT. IOTA uses the Tangle architecture, which is a decentralized network of mutually confirmed transactions. This allows IOTA to achieve high scalability, low costs, and strong security. With these advantages, IOTA has the potential to become an important platform for the future of IoT. Here are some specific applications that can be developed on the IOTA Blockchain:
Payments: IOTA can be used to pay for goods and services in IoT applications. For example, a user could use IOTA to pay for a self-driving car or a smart air conditioner.
Money Transfer: IOTA can be used to transfer money between IoT devices. For example, a company can use IOTA to pay for its IoT sensors.
Sensor networks: IOTA can be used to create secure and efficient sensor networks. For example, a city could use IOTA to monitor air quality or traffic flow.
Information: IOTA can be used to store and share information securely and efficiently. For example, a company can use IOTA to store sensor data or historical data.
Control: IOTA can be used to control IoT devices securely and efficiently. For example, a company can use IOTA to control robots or automated machinery.
In addition, IOTA can also be used in other applications such as:
Supply chain management: IOTA can be used to track goods throughout the supply chain, from manufacturer to consumer.
Healthcare: IOTA can be used to store and share medical data securely and efficiently.
Education: IOTA can be used to store and share educational materials securely and efficiently.
IOTA is still in development but the blockchain has made significant progress in recent years. With its potential to solve IoT challenges, IOTA could become an important platform for the future of the Internet of Things
Cryptocurrency based on the IOTA Blockchain
MIOTA Token
MIOTA token is the native cryptocurrency of the IOTA platform, which is used to pay for transactions on the IOTA network as well as to authenticate those transactions. MIOTA is a decentralized cryptocurrency which means the token is not controlled by any organization or individual. This blockchain is based on Tangle technology, a decentralized network of mutually confirmed transactions.
Key Metrics MIOTA
Token Name: IOTA.
Ticker: MIOTA.
Blockchain: Tangle.
Token Standard: Updating...
Contract: Updating...
Token Type: Utility.
Total Supply: 2,779,530,283 IOTA.
Circulating Supply: 2,779,530,283 IOTA.
MIOTA Token Allocation
All 2,779,530,238 MIOTA were launched at the same time so there is no Token distribution like other projects. The ICO project to raise capital took place on November 24, 2015 - December 20, 2015, only about 5% of the ICO number was sold.
Advantages of MIOTA Token
High scalability: IOTA can handle a much larger number of transactions than traditional blockchains.
Low costs: Trading on IOTA has no fees.
Strong security: IOTA uses encryption to protect data stored on the network.
Disadvantages of MIOTA Token:
Payments: MIOTA can be used to pay for goods and services in IoT applications.
Money Transfer: MIOTA can be used to transfer money between IoT devices.
Sensor networks: MIOTA can be used to create secure and efficient sensor networks.
Some other coins of IOTA Blockchain:
In addition to the platform's main coin, MIOTA, there are several other cryptocurrencies based on IOTA's blockchain. These coins include:
IOTA Access: An open source framework that allows access to the control system.
IOTA Smart Cities: A platform that enables cities to build IoT solutions.
IOTA Data Marketplace: A marketplace that allows users to buy and sell data.
IOTA Identity: A platform that allows users to securely and efficiently authenticate their identities.
The above coins all use IOTA's blockchain to provide specific functions and services, such as IOTA Access uses IOTA's blockchain to authenticate access to control systems while IOTA Smart Cities uses Use IOTA's blockchain to store and share data from IoT sensors. Several IOTA blockchain-based cryptocurrencies have ceased operations in recent years. Overall, IOTA's blockchain has the potential to be used to create new and innovative cryptocurrency applications.
Conclude
IOTA is a decentralized blockchain platform that has the potential to revolutionize the way we interact with IoT devices. By solving scalability, cost, and security issues, IOTA can help create a future where IoT devices can communicate with each other securely and efficiently. However, IOTA is still in development and needs to address some challenges such as security and performance. In the future where IOTA can solve these challenges, it can become an important platform for the future of the Internet of Things.
