What is IOTA?

IOTA is the first open-source distributed ledger (cryptocurrency) that is being built to power the future of the Internet of Things with feeless microtransactions and data integrity for machines.

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.

what is iota
What is IOTA?

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)

What influences the worth of the IOTA token?

Demand determines the price. The Internet of Things (IoT) is still in it’s early stages. It’s not that difficult though to look into it’s future. More and more machines will have processing power and the ability to connect to the internet. These machines can then connect to other machines – and interact with them.

“Imagine billions of IoT devices each having to pay each other small amounts. There currently are about 2.78 billion Miota at roughly 23 cents/Miota. Let’s say that every IoT device will hold on average 1 dollar worth of Iota and there are 2 devices for every human on the planet (14 billion). That means there is no doubt that due to scarcity the Iota price will have to go up, which means that the need to divide into smaller units may approach rather quickly.” – Eric Hop, IOTA Foundation

Which are the possible use cases for IOTA?


  • Sell and earn data
  • E-Auto recharge without transaction fees
  • Adaptable insurance to the driving style

Portable devices / smart watches

  • Change to the best provider depending on your location
  • Collect data without charges
  • Reduce the cost of insurance with fitness


  • Collecting energy and distributing it among neighbours
  • Decentralisation of networks
  • Sell energy with nanopayments


  • Non-manipulable data in the supply chain
  • IDs for products (e.g. medical products)
  • Safe conditions for quality assurance

Supply chain

  • Transparent supply chains for optimum value creation
  • Sustainable and verifiable conditions for Fair Trade
  • Guaranteed quality with sensor paths


  • Optimizing urban processes (waste disposal, traffic light systems)
  • Share WLAN securely with neighbours
  • Connect to Smartcity, but retain data sovereignty


  • Industrial revolution for all
  • Improving production sustainably
  • Communication between satellites and planets

Take a look at the possible use cases for IOTA

Thanks to Limo from the Tangleblog.