Sitting in the ninth spot among top cryptocurrencies, IOTA continues to be the center of discussion and speculation. This write-up will discuss its elusive tangle technology, sponsorships, and value predictions — covering all the basics you need to know!
The last few years have seen a rapidly growing interest in digital currencies and its underlying blockchain technology. What started with bitcoin has turned into a multi-billion dollar industry, filled with investors looking to make a large profit. The list of new initial coin offerings (ICO) and crypto-startups is staggering — and for the newcomer — it can be nothing short of a headache.
This article will strip away the nonsense and provide a straightforward look into IOTA — a digital currency and network designed for use with the “Internet of Things, IoT.”
A Brief IOTA History
So What is the Tangle Anyway?
Unlike Bitcoin and Ethereum (which run on blockchain), IOTA utilizes an altered blockchain called a tangle — the first cryptocurrency network to do so. When a transaction occurs on a blockchain network, computers (referred to as miners) compute highly complex equations to verify the transaction — posting it as a block on a distributed ledger.
The ledger publicly lists all the verified transactions as blocks in a chain — while retaining user anonymity.
IOTA’s tangle is less like a chain and more like a web. When you make a transaction on the IOTA network, it’s not verified by miners, but rather, by other people posting transactions. The method of verification is still the same, requiring the user devices to solve complex equations to add previous transactions to the network.
Suppose you are person C trying to make a transaction — it can only be processed after your device has verified two previous transactions, namely those of persons A and B. Likewise, your transaction will be verified only after persons D and E have initiated new transactions on the network.
Unlike Blockchain, the tangle network does not list each transaction chronologically on a ledger. Rather, it uses a road-map system, linking each transaction to those which it verified and those which it verified.
The Tangle has many advantages over blockchain, including increased security and faster processing times. It also requires less energy than does the systems which utilize mining.
IOTA Grows Through Its Partnerships
Since its release, the IOTA Foundation has formed several significant relationships with companies looking to advance IoT development. The unique tangle network has been key in grabbing the interest of prospective partnerships.
On October 17th, 2017, The IOTA Foundation publicly announced one such partnership with Bosch — a company that estimates that 15.6 billion devices will be connected by 2020. Bosch was a co-founder of the IoT innovation space in Boston, where the announcement took place.
“There is great potential through Distributed Ledger Technologies to make each IoT project more secure, efficient, and provide increased transparency to consumers of IoT solutions,” said Dennis Boecker, Bosch IT Global Innovation Lead.
David Sønstebø said of that partnership that “IOTA and Bosch [had] been in dialog about the convergence between the Internet-of-Things and IOTA’s Distributed Ledger Technology since late 2015 […] Our official collaboration on this laboratory for exploring this overlap cements both entities’ goal of enabling an open and secure IoT ecosystem.”
Bosch and IOTA had began their working relationship when they become founding members of the Trusted IoT Alliance (TIOTA).
The Volkswagen group, heading 12 other motoring brands (including Lamborghini and Porsche), is looking to stay ahead of the technological curve. The company announced its partnership with IOTA in January 2018 — looking to combine the distributed ledger technology with the company’s driverless cars.
So far the collaboration has been fruitful, with Johann Jungwirth, Volkswagen’s Chief Digital Officer (CDO), joining the IOTA foundation supervisory board.
A tweet from Jungwirth explained that the company was already beginning a proof of concept: live test of the IOTA network.
The tweet stated:
Volkswagen, together with @iotatoken will show at #cebit18 a proof of concept how the trusted transfer of software over-the-air to vehicles can be securely documented using the #tangle. A great example of how distributed ledger technology can be used in the future
Reports of IOTA working with Fujitsu to feed data into IOTA data silos had already come forward before an official partnership was announced last year. David Sønstebø spoke about the goals of the collaboration with the large Japanese company.
“The goal is to enable a combination of a business-to-business data economy, as well as enabling researchers and even hobbyists to participate. The beauty of enabling fine-granular trade access is that we really don’t know who or how it will be used, except that we know it is a completely new paradigm.”
On April 23rd, 2018 the company showcased its first demonstration of IOTA’s technology at the Hannover Messe Exhibition held in Held in Hannover, Germany. The exhibition is a respected place for showcasing and trading future industrial technologies.
While no official partnership has been announced — the relationship between IOTA and Microsoft has been under intense debate. Following a statement by Omkar Naik, the leader of Microsoft’s enterprise Blockchain and Data Platform, it was assumed that the companies had formed a public partnership. The statement read:
“We are excited to partner with IOTA foundation and proud to be associated with its new data marketplace initiative. This next generation technology will accelerate the connected, intelligent world and go beyond blockchain that will foster innovation, real-world solutions, applications and pilots for our customers”.
The statement was later refuted by Microsoft and IOTA — but both maintain that they are working together on projects. IOTA Co-Founder Dominik Schiener reported that they had had meetings with the Microsoft offices in Chicago and Paris.
IOTA’s lists of partnerships don’t end there. A mass of smaller companies have begun collaborations in hopes to benefit from the tangle network.
The IOTA Token
Running alongside the tangle network is the IOTA Token, or MIOTA. This is the digital currency which makes transactions and purchases possible. While the IOTA foundation initially conceived the digital currency for use on IoT devices — its success has provided equal stability for use in the micropayments market.
The value of the IOTA coin has suffered the same ebbs and flows as other digital currencies — receiving a significant boost at the end of last year following the purported partnership with Microsoft.
IOTA suffered an alleged security flaw on September 2017, determined by the MIT-affiliated Digital Currency Initiative. The claim was later debunked but it has had a lasting effect on IOTA’s reputation. Competition from other new digital currencies and distributed ledger projects also pose a threat to IOTAs infrastructure and continuation.
Despite all this — its not the end for IOTA.
IOTA Value and The Future
IOTA has continued to show an initiative to push further. In February of 2018, they announced the release of their IOTA Ecosystem — bringing developers, startups, hobbyists, and initiatives together for application development on the IOTA network.
The value of the IOTA coin now depends on where the Foundation goes next. Continuing to develop strong partnerships will be key to promoting the real world uses of IOTA —including e-government, smart cities, and public transportation.
Adding to IOTA’s benefits is its infinite scalability. Unlike Bitcoin’s blockchain, which requires consensus from multiple miners thus slowing down transaction speeds — IOTA’s tangle relies on users for transaction verification, making transaction speeds much faster.
The proposed IOTA chip JINN would be an extreme game changer for the value of IOTA. The initial projection outlined a chip that would allow objects to communicate with the Tangle network without the need of a computer.
In essence, you could place these chips in household appliances, cars, and other objects — enabling them to pay themselves for their services rendered.
Many companies have expressed interest in utilizing IOTA’s JINN chip — but are holding off until the technology stabilizes and can accommodate modular updating in their systems. If more companies continue to adopt the IOTA network and JINN chip its value could be explosive.
Qubic : Quorum-Based Computation for Oracle Machines, Smart Contracts, and Outsourced Computation
Not to be outdone by the latest wave of programmable blockchain tech, IOTA has long planned for a quorum-based computation system. This protocol, known as Qubic, will enable IOTA-connected functionality that expands far beyond data streams. Qubic will open a new market of abundant computing resources by tapping into our empty hard drives and idle computing devices. Qubic will also provide fresh access to Oracle Machines, which are external data sources that can be fed in, and acted upon in IOTA-based applications or Qubic smart contracts. The possible uses for this technology are near-infinite as they can be adapted to fit any industry in a similar manner that the Internet was adapted to meet universal demand.
The Big Picture
IOTA is a unique technology that is vastly different in both purpose and design from other digital currencies on the market. The technology behind it is very new and still being tested, making it vulnerable in the current market, yet potentially world-changing if its ambitions are met. IOTA will need to move at a rapid pace as new challenges emerge in the industry such as other major projects, like the Perlin-ICO, which touts it will make “supercomputing economically viable and accessible globally.”
If IOTA’s technology continues to work as planned — its projected value could be very high.