What is IOTA?
IOTA is a digital payment system (cryptocurrency) developed for use on the Internet-of-Things (IoT). The primary purpose is microtransactions. Machines can exchange services or data with each other and pay for them with MIOTA. What makes it stand out from other cryptocurrencies is that it has a data layer as well as a value layer.
In addition to the traditional business areas B2B and B2C, M2M (machine to machine) is gaining momentum. The Internet-of-Things consists of small and large machines and its network is continuously expanding. Machines such as refrigerators, drills and coffee machines don’t have high computing power. With IOTA, transactions can be carried out without high computing costs, securely and without fees.
The development of the IOTA token is led by the IOTA Foundation (IF). The IF is a non-profit foundation based in Berlin. Its aim is to improve the world in a sustainable, fair and transparent way. Since I was a young person, I have dreamed of making the world a better place. With the IOTA Community, for the first time I have the impression that I have a realistic chance.
IOTA differs from Bitcoin in several ways:
- There are no transaction fees.
- Instead of a “block chain”, transactions are carried out on the tangle.
- Currently 800 transactions are possible – instead of 7 with Bitcoin.
- The more transactions are executed, the faster they become.
- The low computing power required makes IOTA currently the greenest crypto currency.
The price of both fluctuates strongly. This high volatility does not facilitate the establishment of IOTA as a means of payment. At the same time, it makes crypto currencies a risky investment. The Bitcoin dominance is still a strong factor. If BTC rises or falls, the altccoins usually follow suit.
How does IOTA differ from the Blockchain?
The blockchain with the currency Bitcoin (BTC) is completely different in regard to its “character” and use. Originally it was designed as a means of payment that makes middlemen like banks superfluous. The blockchain concept was developed in response to the 2008 financial crisis. This had exposed the extent of the greed (and inability) of some bankers. The suspicion of middlemen filling their pockets is theoretically solved by a blockchain. Blockchains are chains of entries in a “ledger”. A ledger is a list whose entries cannot be changed afterwards. The blockchain can be downloaded as a file and can be viewed by anyone. Its huge disadvantage is the immense energy consumption.
An entrepreneur from Russia bought two power plants to cover the energy needs of his mining farm. Bitcoin is currently traded more as digital gold because it has similar attributes.
- Only minable with considerable effort
- limited available (maximum just under 21 million bitcoins)