What is IOTA (Miota) - Simply explained

Iota is a cryptocurrency that is very different from other digital currencies. Iota does not use a blockchain but the so-called tangle, which also offers clear advantages in terms of scalability and speed.

Miota has set itself the goal of enabling communication between machines without human involvement. Here is a small example for those who have no idea what this means: You have stored your food in the fridge.

Now you take a product out of the refrigerator and the refrigerator immediately notices that it has to reorder this product. This happens fully automatically without the involvement of the owner.

Miota uses neither the algorithm proof of work or Proof of Stake but relies on the Tangle. The Tangle is a modified version of the blockchain. The tangle does not require a miner and allows fast and, above all, cheap transactions between machines. At the same time, Iota is very scalable.

Iota is still at the very beginning in the field of IOT. But Iota is well on its way to becoming part of the IOT infrastructure.

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What is IOT? The Internet of Things

The Internet of Things is a big topic in the IT industry. More and more devices in today's world are becoming smart and are connected to the internet. But automation is also increasing very quickly in many areas. Just as we communicate with each other, machines should also be networked and communicate with each other. More and more devices are becoming smart, and are also communicating more and more with each other.

These devices form the so-called Internet of Things (IOT). The aim is to collect data from the real world and to process the information received completely automatically and to link it with various other functions.

By 2020, the Internet of Things should be completely part of everyday life.

Here are a few examples:

  • With sensors in the house, it could regulate itself and thus adjust the temperature independently.
  • The refrigerator could automatically and autonomously reorder the product when its minimum stock level is reached.
  • Vehicles could park intelligently, make fully automatic payments when leaving the car park. It would also be possible to communicate between the individual vehicles in order to consult with cars that are already parked and thus simplify the parking process.
  • Households could supply each other with electricity and use the Tangle you would pay for the amount you need immediately or even receive a payment.
  • Refuelling of vehicles
  • Tolls that are paid automatically

And this is exactly where Iota comes in. If you take a closer look at smart devices today, you quickly notice that everything is centralised. There must be centralised checks to ensure that the applications run correctly and that no misuse occurs. All those involved have to trust a middleman. As soon as this instance has a defect, there is a complete system failure.

And this is exactly where Miota comes into play. Iota has the vision of organising machines in a decentralised way with the help of tangles. Like other cryptocurrencies, Iota wants to cryptocurrencies replace the central authority with a decentralised consensus check.

How exactly does Iota work?

Most cryptocurrencies like Bitcoin ,Litecoin or Ethereum use the Blockchain. Iota uses the tangle where others rely on a classic blockchain. A tangle is a related structure of a blockchain. This structure is also called a directed acyclic graph, abbreviated as DAG. The whole thing can also be explained in a very simplified way:

A graph is a set of nodes connected by paths. However, each of these paths has a unique direction that is also fixed. This is also known as an "arrow". If the direction is fixed, it is a directed graph. If you cannot find a path of arrows to the starting point, it is called an acyclic graph, which means that it does not have cyclic paths. Every blockchain is a very simple, chain-shaped DAG.

In Iota, this graph is called a tangle. The big difference to a normal blockchain is that the nodes in the tangle do not represent blocks or nodes in the network but always individual transactions.

If a user wants to carry out a transaction, he or she must authenticate at least two other transactions. If the minimum number of authentications is reached, the transaction is considered verified and can be executed.

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Advantages of Miota over other cryptocurrencies

Like many other cryptocurrency projects, Iota is still at the beginning of its development. However, Iota has a lot of advantages over other crypto projects due to its Tangle technology. Because the tangle is arbitrarily scalable and a large number of transactions can be executed simultaneously, Iota is in the running to take a firm place in the infrastructure of the IOT or even to become part of it. Theoretically, if the number of Miota users increases, the speed will also increase.

Iota's focus is on industry standards for transactions in the Internet of Things. No other digital currency has as much potential for the IOT as Iota.

The foundation of Miota

IOTA was founded in 2015 by Sergey Ivancheglo, Dominik Schiener, David Sønstebø and Serguei Popov. IOTA is a non-profit organisation and is dedicated to the development of the Tangle technology and keeps it licence-free for all developers. There is a fixed number of MIOTA:

  • 2,779,530,283 Miota

These were distributed in an Initial Coin Offering.