Overall Rating: 4.2 out of 5
IOTA is a cryptocurrency that facilitates transactions between devices on the Internet of Things (IoT). The name derives from the 9th letter in the Greek alphabet, and also stands for ‘the smallest possible unit’. IOTA addresses the transaction fees and scalability issues of blockchain technologies by getting rid of the blockchain entirely, instead opting to use DAG technology. In order to submit a transaction to the IOTA ledger, you must verify two other previous transactions. This method of verification means there’s no need for miners to power the network. As the devices on the network randomly verify each other’s transactions, they build consensus through the web of connections between transactions. This network is called ‘Tangle’.Read the full analysis here
Since computing power in the Tangle grows as the network grows, IOTA is promising free, fast transactions. It’s also designed to process micro-payments and payments between machines, facilitating a whole machine-to-machine micro-economy.
While the technology is very new and exciting, there are critical issues to be resolved, such as replacing the coordinator, and limiting attack vectors. Nonetheless, the team is packed and talented, and IOTA is regarded as a project with game-breaking potential.
At 28 pages long, IOTA’s whitepaper is very methodical and technical. It is designed more like a scientific article than a sales pitch, and there is a broad use of technological terminology in describing the mechanisms behind IOTA’s DAG implenetation – the Tangle. There is heavy use of mathematical equations that exceed the layman’s field of knowledge, therefor it is not as readable and accessible as other project’s whitepapers. Nonetheless, the technology IOTA are trying to implement has the possibility to be ground breaking, and their approach shows that this is their main concern. It doesn’t elaborate past the technicalities of the Tangle network, its assumed resistence to attacks, the infrastructure, and the crowdsale IOTA had that raised roughly 1300 BTC is not mentioned. Overall it is a very dry, thorough, technical piece of information that indicates how much thought and analytical work was put into this project.
IOTA is a cryptocurrency that has no transaction fees and requires no miners in order to process transactions. It does, however, require some computational power to submit a transaction, making it perfect for machines to use as a currency and distributed communication protocol for the Internet of Things, or IoT in short. Some of the major issues IOTA is trying to solve are the same problems that plague PoW based blockchains such as Bitcoin – Scalability, security and fees. In IOTA, which implements a Directed Acyclic Graph based design, every user is both submitting and verifying transactions. So every user contributes both to verification, and security. Transactions are verified multiple times by different users, as it keeps getting approvals, the degree of confidence for that transaction increases.
Since we’re dealing with the Internet of Things, the use cases are practically endless, with physical devices, smart vehicles, home appliances and other common items embedded with hardware that can connect to the internet being more and more prominent. Experts currently estimate that the IoT will consist of about 30 billion objects/devices by 2020, and the IoT global market value will be around 7 trilliong USD. Some of the more feasible, short to medium term use cases for IOTA can be named as example: IoT based transportation (Imagine an IoT connection between your smartphone and the train you’re about to miss, that allows to you pay in advance/pay for distance traveled, help you determine whether there are available seats, and more) and IoT based tellecommunication systems (Your smart TV can pay Netflix and HBO directly, your iRobot can clean your neighbor’s apartment while you’re at work).
IOTA’s appeal is massive – the western world is rapidly becoming more interconnected. Smart TVs, smartphones, tablets, smart home appliances – all of these are more prominent than ever. If IOTA can truly implement their vision properly, the target user base is, well, everyone on Earth. Innovation-wise, the Tangle is an impressive feat, with its only weak point, or Achilles’ Heel if you will, is the Coordinator, a centralized point of access that is there to serve as ‘training wheels’ for the infrastructure in its infancy stages.
Competition-wise, there are some competitors in the blockchain scene (Xage, Slock, Exxor and more) but IOTA is by far the most established and trusted one. No DAG based infrastructure that tackles the IoT currently exists out there to the best of this review’s author’s knowledge.Read the full analysis here