Internet of Things Applications (IOTA) is a cryptocurrency that facilitates transactions between the Internet of Things. The new cryptocurrency aims to establish itself as fuel efficient option, for machine-to-machine transactions.
IOTA cryptocurrency addresses transaction fees and scalability issues commonly associated with Blockchain technologies. The crypto uses an Acyclic Graph instead of the Blockchain, to enable free transactions regardless of the size of the transaction. The number of transactions that a system can handle is simultaneously unlimited.
How Does IOTA Work?
IOTA boasts of four huge advantages over normal Blockchain cryptocurrencies. The cryptocurrency is scalable, decentralized, modular and has lower fees. Unlike normal cryptocurrencies that use a Blockchain architecture, IOTA uses a ledger dubbed the ‘Tangle’ which is a Directed Acyclic Graph.
Tangle solves scalability and transaction fees issues, associated with Bitcoin, by requiring a sender in a transaction to perform a kind of proof of work. In order for a person to submit a transaction, they must first verify two other transactions.
A person is required to pick two other transactions at random and check whether their associated keys and balances are valid. If everything is okay, they must then couple the two transactions with their own transactions and a little Proof-of-Work. After Proof-of-Work, the bundle is normally sent to the network for review.
The validation and Proof-of-Work protects the network from spam attacks given the entire process requires an attacker to issue a high volume of transactions. IOTA promises free and fast transactions as the computing power of Tangle continues to grow. The technology also promises a whole machine-to-machine economy with the growth in payments between machines.
History of IOTA
David Sønstebø, Sergey Ivancheglo, Dominik Schiener, and Dr. Serguei Popov founded IOTA cryptocurrency in 2015. A fixed supply of 2,779,530,283,277,761 tokens were created, which means there will be no mining.
Beta Testing of IOTA cryptocurrency began in 2015 as trading over-the-counter between users kicked in. The IOTA cryptocurrency was listed by its first exchange Bitfinex in June 2017, consequently followed by a seven-figure investment by Outlier Ventures.
IOTA Foundation forged a partnership with REFUNITE in August 2017 as part of an effort that will enable the usage of IOTA technology to help reunite families during and after conflicts.
IOTA Token Price Analysis
The fact that IOTA is still in the early stages of development raises questions whether the price is overhyped. Trading volume has also taken a hit in recent trading sessions from an average of $101 million to $36 million. Trading volume has also been limited by the fact that the cryptocurrency is only traded in a few exchanges compared to other cryptocurrencies.
A decline in trading momentum could have a significant impact on the IOTA coin price even as it continues to trade near its record highs. Correction of the price could also come into play as concerns that the price might be inflated.