My last post was about Internet of things, now I would like to continue in related topic. First thing what is Iota?
As it’s written on their own site, this is ledger that is being built to power future of internet of things. Well, this is nothing but, transactional settlement and data transfer layer. It depends on “tangle” system, and has some similarities and differences from blockchain. It offers new way of making transactions in decentralized paying system.
In last post I’ve mentioned about smart cities, it sounds perfect but is impossible without new way of fast payments. That’s actually where iota wants to conquer against bitcoin and where, we find biggest differences. Blockchain currencies(ex. Bitcoin)usually, reach transactional price > 40$ . In smart cities most of the transactions are between internet-connected devices, those are the nanotransactions and reaches below 40$. Such payments needs to happen immediately. But first, let’s make a quick reminder what the bitcoin is and we will compare it to iota.
In bitcoin [blockchain technology] transactions are verified by miners, who found proper algorithm of numbers. But It requires big computing power, and becoming more and more problematic. Blockchain technology is getting slower, when more transactions are made. It is a free process.
In iota [tangle technology] transaction creator require two last transactions to approve current one. This all happens in network that is getting bigger after each transaction and more safety. It doesn’t require any miners, and not that much computing power. If in the net there are more transactions, it gets faster. In this case more users means, more connections and more fluent working. This is why we can regard iota better than bitcoin.It is also free.
Iota discovered their own cryptographic hash function something like “ security system”, unfortunately they made few mistakes. Different inputs were hashing to the same output. This sounds like a primary school mistake, it was coders fault. Nobody is perfect, and certainly there aren’t perfect solutions, this is an example that rolling your own currency always brings a risk 😉. However, their history isn’t that optimistic from the organisational side, the idea and technological aspect are fascinating and bring a lot positive hopes for the future. So I would like to say a little more about same tangle.
This looks quite like that:
I read at the web site of iota that it is possible to store information within Tangle transactions, or even spread larger amounts of information in wide bounds or during linked transactions. I can assume my admiration by the words:
“The more activity in ‘the Tangle’, the faster transactions can be confirmed.” – this is the tag line of what decentralized payment system is .
I don’t think that iota is going to be the currency of the future, but it doesn’t mean the direction they are aiming is wrong. In my opinion for next decade as the market of IOT( internet of things) will develop, the ideas as iota will gain more and more popularity. Maybe it is not time to invest in this concrete case, but it is worth to be aware of such a opportunity.
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