IOTA (MIOTA) Cryptocurrency Overview

The Internet of Things concept involves linking things around us into a global M2M (machine to machine) network. It was first conceived at the end of the last millennium by Kevin Ashton, head of the Auto-ID research center at the Massachusetts Institute of Technology. According to scientists’ idea, all home appliances, life support systems, goods equipped with radiofrequency labels should be united in a single computing system. The Internet of Things requires an internal financial instrument for mutual settlements in the global network. And it has already been created – it is the cryptocurrency IOTA (MIOTA).

What is IOTA (MIOTA)?

Official website – https://www.iota.org

IOTA is a new generation cryptocurrency powered by Tangle technology. The IOTA coin project team is working together with technology giants like Google, IBM, Microsoft, and Samsung to realize the idea of a worldwide M2M computing network.

The IOTA digital token was created to serve the Internet of Things (IoT). The IOT system is billions of small computing devices with radio frequency modules that are increasingly being embedded in various appliances and other objects around us, allowing them to send and receive data. IOTA turns these connected machines into autonomous economic agents, creating an entirely new ‘economy of things’.

In IOTA’s distributed ledger, each connected machine can maintain its own virtual wallet and perform transactions with other connected machines, even if the value is a fraction of a cent, with zero fees.

By 2025, it is predicted that more than 75 billion devices will be connected to the Internet of Things. Until the IOTA cryptocurrency becomes more widespread, the network has adopted a base unit of 1 MegaIOTA (MIOTA). As of today, 1 MIOTA = $1.20.

Characteristics of the cryptocurrency IOTA (MIOTA)

Let’s do a comparative analysis of Tangle with Blockchain.

Data structure:

Blockchain is a sequential chain of blocks, similar to a linked list. The blocks contain data about completed transactions and are created over a period of time. In Tangle, as the English word Tangle translates, each transaction (rather than a block of transactions) refers to the previous two, forming a complex web structure known in mathematics as a “Directional Acyclic Graph”, or DAG for short. The DAG structure allows transactions to execute simultaneously, asynchronously and continuously, as opposed to a linear extension of the blockchain.

Scalability:

By parallelising transaction processing, IOTA increases network throughput. In blockchain, multiple subsequent blocks must be created to validate each block to insure against the problem of double spending. IOTA verifies transactions using the “heaviest Tangle” rule. What it consists of we will now explain.

Consensus:

Unlike other ecosystems where the “longest chain” rule applies in Iota blockchain the consensus follows the “heaviest tangle”. In order to send funds, a user must verify 2 transactions on the network. The more active MIOTA holders are, the more checks are made and the faster the transaction is confirmed. When double spending or other types of fraud occur, the “invalid” branch of the Iota Cryptocurrency Tangle becomes orphaned and forgotten.

Security:

The IOTA system does not require a lot of computing power to verify transfers, so there are no fees. Unlike other blockchain networks where Proof-of-Work resembles a decentralised lottery, in Tangle transaction verification is a spam and sybilla prevention measure.

IOTA Foundation

The IOTA Foundation, was officially registered in autumn 2017 in Berlin.

Main objectives:

Research and modification of the protocol baseline;
Development of off-the-shelf software for the community, partners and ecosystem;
Promotion of Internet of Things technology.
The IOTA Foundation is funded from three sources:

Iota cryptocurrency reserves, consisting of community donations and unclaimed initial crowdsale tokens;
Grants from governments for research and development;
Donations from individuals or businesses.
The IOTA Foundation is governed by a formal charter and includes:

A Board of Governors to define and implement the Foundation’s vision and manage its activities;
A Supervisory Board to guide and supervise the work of the Governing Board;
An Advisory Board to provide independent advice, perspective and direction.
In February 2019, the IOTA Foundation, entered into a cooperation agreement with Nova. The teams are working together to promote successful start-ups using next-generation technology.

IOTA (MIOTA) mining

Each MIOTA token holder is responsible for maintaining the network. The developers have set the maximum supply of the cryptocurrency at 2,779,530,283,277,761 coins. There is no mining in the IOTA ecosystem. Most of the coins are distributed to users, with the rest being controlled by the IOTA Foundation.

Buy and sell IOTA Coins (MIOTA)

IOTA exchange to other cryptocurrencies or fiat currency is supported by 30 exchanges. Most of the trades are on Binance and Bitfinex. The main trading pairs are IOTA/BTC, OTA/ETH, IOTA/USD, IOTA/EUR.

The principle of acquiring IOTA is as follows:

It is necessary to register on one of the given sites after registration you need to pass KYC at once. It is better to choose Binance exchange.
Next, you will need to top up your balance with the required amount. In the virtual terminal select tab “Replenish from card”.
Once you have topped up your balance, select a trading pair on the spot market and buy coins. The trading pair for trading IOTA/BTC.

You may also replenish your balance through the P2P section, this option is considered the most optimal and with minimum fees. There is a detailed instruction on our YouTube channel.

How to install IOTA wallet

A new version of the wallet, called Firefly (Firefly) is available. You can download it from the official website of the project https://firefly.iota.org. All you need to do is to download and install the wallet for the OS of your choice. The application has been designed to help you set up your profile, secure it and successfully transfer tokens.

IOTA Firefly uses a mnemonic of 24 words. Save these to restore access to your tokens in Tangle. You will be able to back up your recovery phrase using the recovery kit you create when setting up your wallet. You need to save a so-called ‘citadel file’ and write down 24 words.

The cryptocurrency IOTA is on the list of coins supported by the Ledger Live app. You can sync Trinity with the Ledger hardware vault and feel completely safe.

Transactions can be tracked on https://explorer.iota.org/mainnet services.

Pros and cons of IOTA (MIOTA)

Let’s look at the main advantages and disadvantages of the IOTA crypto project. As for the practical application, the transactions in this payment network are free, which is undoubtedly a big plus. IOTA, unlike Bitcoin or Etherium, allows instant micropayments. Proponents call the Tangle system a third-level blockchain, but by and large that name is incorrect because no blocks are actually created in Tangle. The project collaborates with major business corporations and financial institutions, which allows it to speak positively about it.

The IOTA development team offers a ready-made solution to a number of problematic issues common to many traditional blockchain networks, these are:

Loss of decentralisation. In PoW ecosystems, miners pool together to speed up hash matching and get more coins. As a result, most of the hash rate falls under the control of two or three servers, and the system becomes vulnerable to a 51% attack. Switching to the PoS consensus algorithm does not fundamentally solve this problem.
The complexity of microtransactions. The Internet of Things requires a system with high bandwidth and low transaction fees.
Inability to unbundle. Most decentralised blockchain ecosystems do not allow for the separation of any part. In IOTA, it is possible to conduct a transaction autonomously without a complete connection to the network, which is not possible in traditional blockchains.

High hardware requirements. Bitcoin and many altcoins use unique proof-of-work processing scenarios. Computational complexity is constantly increasing and it is not possible to mine coins on anything. Other ecosystems use Proof of Service (PoS). This requires an investment in network tokens, and somewhat reduces the cost of cryptocurrencies. However, the complexity of this method of blockchain generation is also steadily increasing.
Is the IOTA project network so perfect? Of course not. Let’s take a look at the vulnerabilities of this platform as outlined by Ethereum team member Nick Johnson:

The rationale for using ternary code in the IOTA protocol sounds very unconvincing. The network is served by hardware that only uses binary code. This means that all internal ternary values (trits) must be recoded, which requires additional storage and processing power.

The developers of IOTA have neglected the basic tenets of cryptography. The choice of ternary code implies a “reinterpretation” of the basic cryptographic hashing operation. This violates the first rule of cryptography, which prohibits the unreasonable creation of new algorithms. According to outside experts, this approach has led to serious vulnerabilities in the Curl hash function that IOTA uses.
The project developers acknowledged the error and rewrote the programming code. The network was updated, with a new version called Chrysalis, or IOTA 1.5, launched in April of this year. As a result, all controversial decisions, primarily the ternary coding and quantum security level, have been replaced by established standards.

At the same time, IOTA project co-founder Sergei Ivancheglo said that the developers were aware of the Curl hash function bugs and left them in place intentionally, to protect against counterfeiting. If someone wanted to clone IOTA, they would have published a list of vulnerabilities. What is this, a good minefield for a bad game, or a clean-smelling confession? Either way, the IOTA team disregarded the established practice of publishing open source projects, and demonstrated hostility towards the blockchain community.

IOTA and Tangle’s technology has not yet worked to its full potential, which means that one cannot be 100% sure of the project’s reliability. The speculative nature of the crypto market has a negative impact on the development of the technology. It is very difficult to make any predictions about the value of IOTA. The potential of the Tangle system will only be unlocked once the Internet of Things concept is implemented.

IOTA (MIOTA) cryptocurrency outlook and forecast

In 2018, the European Commission formally approved the development of + CityxChange, which has become a new Smart City project, under the theme of Smart Cities and Communities.

The + CityxChange project is divided into several work packages, each dedicated to a specific area of the future energy efficient smart city. Each work package consists of several sections. IOTA works on 12 tasks ranging from standard project management activities, to developing and planning the commercialisation and operation of new technologies.

The two main sectors where Tangle is used to develop innovative solutions are:

Public network development and platforms for local energy trading;
Wireless networks for environmental management and environmental auditing (emaas).
IOTA Foundation collaborates with the Linux Foundation on the LF Edge project, Zuhlke, a service provider for innovation projects across Europe.

Prospects for IOTA (MIOTA)

The system can be used for e-voting, secure communication channels and the transmission of encrypted messages. The widespread implementation of Tangle will make it possible to rent out anything with a chip. For example, household appliances, transport, computing resources, Wi-Fi channels.

Conclusion

If the Internet of Things project is successful, the cryptocurrency Iota will become in demand. So far, the IW technology does not have a well-established infrastructure to function properly. And society is not yet ready for widespread use of Internet of Things, but it is a very promising area of activity.

Full integration of blockchain technology into the economy will take at least 5 years, so investing in IOTA should not expect instant returns. Buying any cryptocurrency is a long-term investment.

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