IOTA is an open-source distributed ledger that does not use blockchain technology. However, it offers far greater speeds than the projects using the blockchain for transactions and data transfers.
A distributed ledger helps in keeping track of information related to the amount of cryptocurrencies owned by an individual by storing the details of all the transactions publicly on multiple computers across the network.
Initially it was created with the idea to support and revolutionize distributed communication for IoT devices. It uses a technology called Tangle; a framework that is based on directed acyclic graph (DAG).
And IOTA has no transaction fees because there are no miners in the system since it is not running on a blockchain. It is designed in such a way that it provides an efficient micropayment transaction channel for various organizations around the world.
To understand a project’s nature and the potential it possesses to get adopted in the long run we need to analyze the underlying use case which will help it to achieve the goal.
In January 2018, IOTA signed an agreement with the Taipei City Government to test its technology to transform the city into an innovative smart city. The Tangle technology was used for creating digital ID card for its citizens and it was also integrated into the city’s air pollution monitoring system.
This will eradicate identity theft and voting fraud that persist and is one of the major problems faced by governments across the globe.
IOTA has been in collaboration with ElaadNL since 2017 and has created many smart charging stations for electric cars. With the help of IOTA technology, the smart grids can autonomously balance the energy consumption levels.
At the same time, transfer of data and payments occur automatically between the car and the charger.
Data integrity has been hindering the growth of healthcare sector and eHealth services. IOTA believes that it can improve this by offering relevant data to the providers of these services.
During clinical visits, health sensors are helpful in providing valuable information about a patient’s health. But securing such information or data streams remains a task, but this is being achieved with IOTA Streams. IOTA Streams helps in integrating these streams of health sensor data into healthcare records.
There are various projects in the IOTA ecosystem that will help in accomplish the project’s goal of making data secure and reliable in every sector of the market. We have listed below few projects that will give you a brief idea of its ecosystem.
As the name highlights it is a project that involves a vending machine which is integrated with the IOTA. The vending machine allows the sale of various products in return for payment in the form of IOTA tokens.
The payment can be done using a smartphone and the IOTA Trinity wallet app. Once you select the product you need you will be provided with an QR code address and the number of IOTA tokens to be paid will be displayed on the display of the vending machine.
HoneycombOS is an embedded Linux which was specifically designed for IOTA nodes, clients, and Tangle related tools. The project is part of the Meta-iota, which is already funded by IOTA Ecosystem Development Fund.
It was built as lightweight as possible so that all CPU power is used for Tangle related computations.
Fognet uses Bluetooth and IOTA technology to provide peer-to-peer internet routing and design system for accessing the decentralized web. The peer-to-peer structure is used for transferring data.
There is no single point of control because the Fogent routers automatically organize themselves into a mesh network. Even with little or no access to internet the router can be connected to phones and laptops in the area to distribute data.
ALFRIED is one of Germany’s largest publicly funded roadside infrastructure project which will use IOTA protocol to provide accurate geographic reference points, road, and weather conditions.
IOTA will also help in maintaining confidentiality of data and increase security and traceability of devices.
IOTA was founded in 2015 by Dominik Schiener, an entrepreneur who has previously founded companies like Bithaus and Fileyy, also Professor Serguei Popov, who has previously worked as a professor of mathematics at the University of Campinas in Sao Paulo Brazil, who is also the co-founder and author of the IOTA whitepaper. The list of co-founders also includes David Sonstebo who parted ways with the team due to differences in interest.
The team is spread across 25 countries and the IOTA foundation has rapidly gained pace in time.
There have been many developments in the IOTA ecosystem and currently there are many projects in its pipeline. The most awaited project has been Coordicide in which it aims to replace the centralized node called Coordinator with a consensus mechanism. This has yet to be completed but there has been positive progress on the project. The IOTA roadmap can be found here.
IOTA is not only capable of connecting devices but has also created a network that can power microtransactions between IoT device. And MIOTA makes this possible because even the smallest amounts of payments can be paid.
IOTA is mandatory for many applications within the ecosystem such as payment of services or monetary compensation when data or goods need to be traded.
It is a fact that IOTA tokens were fairly issued and none of them were reserved for the team. However, to ensure the sustainability of the project and to support the foundation, 5% of the tokens were donated by the community.
There has been a lot of criticism that IOTA had to go through over the years because of various reasons like the theft that occurred in 2018 where $11.4 million worth of IOTA was stolen by creating fake seeds. And the hack that took place later in 2020 where it had to suspend its network for the investigation.
It also faced the heat when few flaws within the network were identified but all those problems have been resolved or are under progress. Also, the person responsible for the fake seeds was apprehended by the law enforcement authorities in the UK.
It has partnered with the leading organizations in the market, and it has built a reputation that follows its technology. Volkswagen, Dell Technologies, DnB, Bosh, Fujitsu, Jaguar Land Rover, etc., are a few of the well-known names that it has been collaborating with for a long time.
We see great potential in the IOTA ecosystem and the progress it has been making for data connectivity.
The project already stood out when it was not created on the blockchain, and it has displayed the power of Tangle in various sectors. The data market is being flooded with innovation and we expect more surprises from IOTA.
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