IOTA has a unique platform and system when it comes to blockchain technologies.
IOTA is typically a distributed ledger that has been developed for use over the IoT (Internet of Things) platform. This means that it would be able to facilitate transactions between machines. Through this platform, the mIOTA exists as a cryptocurrency. Instead of the blockchain used in other such systems, IOTA adopts a DAP or Decentralized Acyclic Graph platform. What it wants to do is to be the standard mode of transaction for devices that are connected to the internet. Through mIOTA, there is a micropayment transaction platform for the devices. In other words, you can now use mIOTA to buy your groceries through your fridge which is connected to the internet.
Solving problems of other cryptocurrencies
Ultimately, IOTA wants to address (and potentially solve) the 3 problems that are found in Bitcoin which are:
- Transaction fees
This is where IOTA is lighter in the network and a lot faster than other bitcoin platforms.
This is the very difference for IOTA. The DAG is what makes it stand out among other blockchains. Where other systems use a configuration of nodes that generate blocks to the chain in order for coins to be mined, the DAG works in another way. It does not use a blockchain which means it does not need to depend on miners. This is done through the connection of the nodes and transaction approvals. In the IOTA network, there is no need for consensus. Every incoming transaction will have to approve the 2 previous ones before it becomes a valid transaction. This allows for a more self-propagating network instead of a chain-reaction type.
The network is called the Tangle and all transactions are at the outset, present within it. Even if the IOTA is strong and seemed more robust, this technology is still very new and is still a work-in-progress with a few major problems having surfaced recently including a phishing attack where about USD4 million worth of cryptocurrency was stolen.
IOTA – 2021 Updates
It must first be noted that the IOTA has an unusual design and that has often come under the microscope as to whether it actually works the way it should. Because of such criticisms, the IOTA has been rewritten from scratch. That was when the Chrysalis was envisioned otherwise known also as the IOTA 1.5.
2017 saw a group of early IOTA investors donating 5% of the total token supply to help with the development of this platform. This would be the start of the IOTA Foundation which would then be chartered a year later in Berlin. The idea behind this foundation was to help in the research and development as well as for the standardization of IOTA and its infrastructure. To date, the foundation continues to play a pivotal role as an active board member of the INATBA or the International Association for Trusted Blockchain Applications. It is also among the founding members of the Io/T Alliance and the MOBI or Mobility Open Blockchain Initiative.
One of the founding members Sergey Ivancheglo had in June 2019 left the board of directors after a dispute among the members. Another co-founder David Sonstebo leaving the foundation in late 2020.
Running on a centralized network, the IOTA needs a coordinator to validate transactions. The IOTA Foundation has decided in 2019 that the coordinator would no longer be needed and be replaced by a 2-stage network update. This was the concept behind IOTA 1.5 called the Chrysalis and then IOTA 2.0 called the Coordicide. In late 2020, a testnet of the Coodicide was launched and the plan is to launch the final version in 2021 while the Chrysalis went live in April 2021.
The IOTA price has been hovering around US$1.20 to US$2 for most of 2020 and into 2021. Since 2021 started, it has been performing steadily and is expected to breach the US$2 mark throughout the year. In May 2021, the price is around US$1.3 but it should start moving upwards as the year progresses and would be around the US$1.80 to US$2 by the year-end before staying there for the first half of 2022.
IOTA Partners with Bosch with advances in IoT
As IoT becomes more popular, it is only natural that device manufacturers are also jumping onto the bandwagon. To put money into IoT is one thing but to do so with a blockchain is pushing it further. The IOTA Foundation had in late 2017 announced the partnership with RBVC or Robert Bosch Venture Capital GmBH. Prior to that, the IOTA’s price spiked up to more than 400%.
RBVC is the venture capital company of the Bosch Group that produces some of the best and cutting-edge devices in the world. Dr. Hongquan Jian, a partner of RBVC had then joined the advisory board of the IOTA Foundation after the company bought a lot of IOTA tokens which is seen as the company’s direction moving into the IoT segment. With IOTA’s distributed ledger technology that automates secure transactions, it is an ideal option for companies venturing into IoT. By the end of 2018, IOTA has already facilitated over US$10 billion in transactions used in vehicle management like parking and maintenance.
While the cooperation with IOTA is a sound one, RBVC is still assessing other options moving forward. With IOTA meanwhile, it goes beyond just automation and into a more autonomous of machines.