IOTA is an ultra-fast speed decentralized ledger for the internet of things (IoT) and machine economy. It capitalizes on the global trend towards automation and connectivity of “smart” devices. Smart devices are powered by artificial intelligence (AI) and fueled by data. IOTA focus is IoT, the technolgy involved in it, and its data support system.
IoT – Internet of things
The goal of IOTA is to develop the inter-operability between smart devices such as phones, appliances, vehicles, security systems, remote monitoring, drones, etc. The communication, commands, and data exchange between them creates the need for a system that can handle millions of transactions per second. A blockchain is simply inadequate to do this. This is where IOTA’s technology comes into play.
IOTA is a leap forward over conventional blockchain computing. Instead of using time and energy consuming Proof-of-Work algorithms, it uses a data structure called Directed Acyclic Graph (DAG) or “Tangle.” In short, a DAG is a forward directional system where new transactions serve to verify two previous transactions. As more transactions enter the Tangle, more connections are created, each verifying two transactions. As a result, instead of slowing, the Tangle speeds up.
Using a DAG, IOTA will be able to scale up and handle an unlimited number of transactions per second. In addition, IOTA is extremely efficient as it has no storage or miners. Instead of storing a full copy of the blockchains, it only stores a few previous transactions. And by transactions checking each other, there is no need for miners and fees, making IOTA free to use. Lastly, it uses a trinary hash function called Curl which is quantum computer resistant.
IOTA plans to manage data for two reasons: One, the more data smart devices receive the faster and more efficient they become. And two, data is valuable; the global data economy value is $3 trillion. Therefore, in addition of serving as a crypto currency, IOTA plans to offer a data marketplace. A place to exchange and sell data.
Change the world
There is a global shift towards smart devices, homes, and cities. For example, the city of Taipei chose IOTA to develop the infrastructure to transform the city into a truly smart city. A city where all services conduct free, micro transactions using MIOTAs (IOTA’s token). In summary, IOTA will change the world by making IoT’s interaction possible to make a ‘Smart’ world a reality.