IOTA, the world 13th largest crypto-coin ranked by market capitalisation at the time of writing is a very interesting coin. IOTA stands for “Internet of Things Application and it is a crypto technology which expedite the transactions between devices on IoT(Internet of things). By disposing the block and chain, IOTA managed to tackle the scalability and transaction fee issues commonly faced in blockchain technologies. IOTA introduced a verification step which require the users to verify two other previous transactions before submitting a transaction to the IOTA ledger. This additional step of verification eliminate the needs of miners to power the network. Consensus was established as the devices on the IOTA network verify each other’s transaction in a random manner through the web of connections between transactions. This particular type of verification is recognised as DAG ( Directed Acyclic Graph ) or as the creators of IOTA called, the Tangle. The the computational power in the Tangle has a positive relationship with the network size, the presence of IOTA promises free and fast transactions. Besides, it is also able to handle micro-payments and transactions between machine, growing a new era of machine to machine based micro economy.
Why IOTA
Due to the explosive growth of Internet of Things (IOT), the demand for micropayment experienced a significant increase as well. Bitcoin was the tool devised originally to solve and cater the needs of micropayment. However, it turns out that Bitcoin is not that feasible after all due to two primary reasons. Firstly, heavy fee was involved while using Bitcoin. The situation deteriorates as the amount of payment reduces, causing an increase in relative fee rate. Secondly, separation of role ( miners and users) often results in conflicts due to the absence of homogeneity among roles. More resources had to be utilised to handle the conflicts. Fortunately, the Directed Acyclic Graph a.k.a Tangle employed by IOTA could address the aforementioned issues effectively.
To gain more information and deeper understanding on IOTA, the PDF of IOTA Whitepaper is attached below for reading purpose .
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