The Economy Of Things IOTA cryptocurrency : What is IOTA?
IOTA is a cryptocurrency designed for the Internet of Things. The main innovation behind IOTA is the Tangle, a revolutionary new blockless distributed ledger which is scalable, lightweight and for the first time ever makes it possible to transfer value without any fees. Contrary to today’s Blockchains, consensus is no-longer decoupled but instead an intrinsic part of the system, leading to decentralized and self-regulating peer-to-peer network. kamerpower.com
The Economy Of Things IOTA
As the Internet-of-Things keep expanding, the need for interoperability and sharing of resources become a necessity. IOTA enables companies to explore new business-2-business models by making every technological resource a potential service to be traded on an open market in real time, with no fees.
The Ledger Of Things IOTA
In this new autonomous Machine Economy IOTA will be the backbone. The Tangle ledger is able to settle transactions with zero fees so devices can trade exact amounts of resources on-demand, as well as store data from sensors and dataloggers securely and verified on the ledger.
Unlike Bitcoin which uses a blockchain architecture for maintaining it’s ledger, IOTA uses the ‘Tangle’ which is a Directed Acyclic Graph, known as a DAG. In summary the Tangle solves both the scalability and transaction fee issues faced by Bitcoin (And most cryptocurrencies) by requiring the Sender in a transaction to perform a kind of proof of work which approves two transactions.
Thus, the act of making a transaction and validating transactions are coupled. This removes dedicated miners and makes the system fully decenteralised – those making transactions (the systems ‘users’) are the only actors who can affect the system (whereas in bitcoin miners are not ‘using’ the system, rather they are simply enabling it to operate).
The remarkable result is that in IOTA, the network transaction speed INCREASES as the number of users increases (as opposed to blockchain cryptocurrencies which get slower with increased numbers of users). It also eliminates the need for users to pay ‘miners’ for doing the proof of work (because they do it themselves). Thus there is no Fee to make a transaction!