IOTA Overview

There are quite a few things that make IOTA unique among Altcoin varieties of cryptocurrencies. Its distinct features have positioned it as one of the top alternatives to Bitcoin for investors. IOTA is regularly ranked in the top ten Altcoins at major cryptocurrency exchanges. One of its hallmarks is that the coin does not function with blockchain technology but uses a platform known as a tangler to facilitate transactions.

The History of IOTA

IOTA first appeared in 2014 with a very unique architecture. It was intended to function as a lightweight ledger that was also scalable. Like other cryptocurrencies, IOTA is decentralized and was envisioned first as a method of paying for things on the Internet. The developers also designed the digital currency in a manner that would be easily made applicable to brick and mortar establishments as well as used in other non-digital scenarios.

The underlying principle behind the IOTA technology was to make it a derivative of the blockchain platform that is common to Bitcoin and other popular cryptocurrencies. The developers claim that their tangler method is more secure, and the innovations associated with the coin have garnered the attention of magazines like Forbes and the International Business Times. Many academic institutions have also praised IOTA’s tangler platform and are working with it in classroom environments as a model for digital currency applications.

The most recent whitepaper issued by the developers of IOTA was released in October of 2017. It addresses the stigmas that are associated with blockchain technology and also reflects on human failures that have contributed to blockchain failures. One of the hallmarks of the tangler method is that it eliminates the process of mining and therefore any associated transaction fees.

The open market has displayed an early affection for IOTA. When it began to appear on cryptocurrency exchanges like Bitfinex in the summer of 2017, the response was immediately enthusiastic. It was immediately available to be traded in IOT/USD and IOT/BTC pairs. It had no trouble hitting its $1.5 billion market cap.

IOTA’s developers state that they want the currency to facilitate new business-to-business models. The goal is to make technological resources a commodity that can be traded on an open market. Benefits of trading for services with IOTA include transactions that are carried out in real time with no fees.

IOTA Mining

IOTA is not mined in the way that Bitcoin and Ethereum are mined. Instead, it relies on something known as the Tangle for transaction processing. The Tangle is a ledger like a blockchain but it does not possess blocks. The process of verifying blocks is removed and has become intrinsic to the platform itself. The currency remains decentralized and self-regulated while preserving peer-to-peer function.

The Tangle also enables micro and nano-transactions. Security is heightened by the Tangle platform because data can be transferred. The data which is transferred through IOTA is fully authenticated. It is also tamper-proof which helps to eliminate the possibility of attacks on the architecture.

The fact that IOTA cannot be mined like other cryptocurrencies is not a large negative. Today, the mining of Bitcoin and Ethereum has become largely impractical for the cryptocurrency hobbyist because the equipment required is costly and consumes vast amounts of electricity. More individuals today are choosing mining pools like those offered by Genesis Mining as alternatives to mining their own coins.

The advantages of a mining pool is that it requires a much lower investment, there is no equipment to maintain, and the participants in a mining pool share the rewards. Genesis Mining uses top of the line mining farms and maintains all of the mining equipment. Of course, IOTA is not one of the coins that can be mined. Still, the coins that are mined can be traded on currency exchanges for IOTA.

IOTA Use and Acceptance

IOTA is still relatively new and mainly used in online applications. It is expected that the use of the currency will grow by leaps and bounds in the coming years. In the meantime, the most common use of IOTA today is as a method of exchange.

Cryptocurrency exchanges allow those who possess digital coins to trade them in a real time environment similar to hard currencies. Users can trade various cryptocurrency pairs against one another. Like all other forms of trading, this carries an inherent risk and should be done with an expectation that loss could occur.