Date of Review: 18/11/17
Name: IOTA (MIOTA)
Number of coins: 2,779,530,283,277,761
Current capitalization: $ 2,217,862,260
Start date: 21/10/15
Current price: 0.8 $ / 0.0001 BTC
Current block height: no
Creator: David Sonstebo, Sergey Ivancheglo, Dominik Schiener, Dr.Sc. Serguei Popov.
History: After the creation of the product, beta tests were held for several months. Simultaneously, direct auctions of crypto currency (pre-sale) were conducted within 11 months. In 2017, Iota created a 10 million fund to support its own projects in the ecosystem. Then we entered into a bitfinex stock exchange. At the moment, the crypto-currency is in the top 10 by its capitalization. Some sources say that the tangle technology that underlies IOTA is being developed since 2011 as an alternative to conventional blockchain.
Till exact moment I traded on my own exchange iotaexchange.com. The reviewers of thetangle.org blocks, have their own forum forum.iota.org, the documentation in the form of a separate project iota.readme.io, as well as many fan projects, based on iota - https://bitcointalk.org/index.php?topic = 1298661.0
Description of the technology and the distinctive features:
At first glance it seems that 2,779,530,283,277,761 of the issued coins it is too much. But let's figure it out. One indivisible value in bitcoin is Satoshi - 0.000000001 btc. Accordingly, one bitcoin is 100 000 000 satoshi, and the maximum number of coins in bitcoin is 21 000 000. So the total number of indivisible units is 2 100 000 000 000 000. If you transfer everything into bitcoin format - Iota has about 27 million coins, not more than bitcoin. But these figures are not very convenient to operate when it is necessary to send a small amount, like 12,000,000 Satoshi, it is necessary to accurately check the number of zeros in front of the comma, that’s inconvenient. IOTA developers thought about this, and decided that one indivisible element in their network would be 1 IOTA. But the format that is used in computer systems for convenience:
- KiloIota (Ki) = 1,000 Iota
- MegaIota (Mi) = 1,000,000 Iota
- GigaIota (Gi) = 1,000,000,000 Iota
- TeraIota (Ti) = 1,000,000,000,000 Iota
- PetaIota (Pi) = 1,000,000,000,000,000 Iota
That is why a IOTA ticker on the exchanges is MIOTA. You buy millions of coins. For example, recently 520 MIOTA were bought, which means - if you transfer into bitcoin format, 520 coins were bought.
People mistakenly call this crypto-currency a token (in general, it's a little annoying when tokens are crypto-currencies, and crypto-currencies are tokens). Iota - crypto currency with 100% already issued coins. There is no mining in IOTA technology, although the node for sending the transaction needs to do some work, but we’ll talk about it later. IOTA also does not have a chain of blocks and blockchain in the usual sense, but it's good.
Crypto currency (coin) is a digital monetary unit that is used for calculations within a specific technology. In the majority of crypto-currencies this technology is blockchain.
Token is a financial instrument that an investor receives from the company in return for his money. Possession of this instrument implies warranty obligations.
Altcoin is the fork of the existing crypto currency, complementing the functions of its parent.
There are also meta coins, or colored coins, which are not a fork of any technology, but have unique characteristics. We see such crypto-currencies in the blog.
Accordingly, IOTA is a meta coin, which we love so much. And now let's talk about the distinctive technologies underlying this coin.
IOTA was conceived as a protocol for Internet of Things (I-O-T)) hence its name. To make a coffee maker or a toaster communicate in their network - they will not use a usual blockchain, since it is 1) slow 2) has commissions. For coffee makers and toasters, it is important that the payment is received quickly and without commission - which is why in IOTA - the whole concept of Bitcoin is turned upside down in the literal sense of the word.
The basis of the IOTA crypto-currency is the Tangle (tangle) technology. The tangle is essentially a directed acyclic directed graph without cyclic branches. In order to add a new transaction, you need to confirm a certain number of transactions in the graph. The Tangle technology is essentially the DAG (directed acyclic graph) fork, the difference is in the number of transactions that needs a confirmation, for DAG it is 1 transaction, tangle - 2.
The main problem in the development is not to allow the graph to grow in width, but only in length. Not allowing to confirm old transactions or to choose constantly the same. The result is a graph in which the width is several times smaller than its length. The so-called Dagchain, which contains related transactions.
That is why IOTA is called a crypto currency without blockchain, a token. But this is fundamentally not true, there is a blockchain in IOTA, but technologically different from the canonical chain of blocks.
In Tangle there are no blocks, there are only transactions, there are no miners as a separate class, but each member of the network is a miner; there are no commissions that must be paid to the miners for inclusion in the block, since there are neither miners there nor blocks. To include your transaction in the DAG chain - you need to take 2 of the last random transactions already included in the chain and confirm them, after which your transaction will be in a chain, and it will already be confirmed. To include your conversion into a graph - you need to do some work, analogous to PoW.
One of the main weaknesses of bitcoin and conventional block chains is the performance and speed of transaction processing. In bitcoin, everything depends on the complexity with which new blocks are created, the size of the block, the mempool and the commission, according to which the block includes transactions. Imagine a situation where the number of transactions created increased by 1000% - in bitcoin this will lead to an increase in the mempool and the creation of a small collapse. In IOTA, it's different - increasing the number of created transactions will lead to the fact that their processing speed will be increased.
How long do you wait for confirmation of the transaction entry in the block in the bitcoin network? IOTA does not have this need in principle. No blocks, no mining - transactions are added to the network in this minute, so there is no need to wait for the transaction to be added to the block by the miner.
The commissions in bitcoin are tied to the number of bytes that you send and depend on the workload of the network and the mempool. Thus - if you increase the load on the network - you will give more coins to the miners as the commission, or you’ll have to wait longer. What is very important for the Internet of things - the lack of a commission is laid down in the IOTA at the protocol level, as it was already written above. If you send 5 IOTA to another user - he will receive 5 IOTA, the ideal environment for performing micropayments.
In bitcoin, when an orphan block and a separate chain are created (for example, the miners have published a block on the network at one time), a situation called "double spending" is possible -double waste of coins. In the case of IOTA and Tangle, this is not possible, because double expenses can be verified by a simple graph operation that students do at the information theory practices (the smallest path between the two nodes in the graph).
Imagine that it is 16:04 now, and Bob decides to send a message. He creates a transaction that references on 2 transactions:
- First deposits 1 iota to Alice's address
-The second spends 1 iota from the Alice address
This does not lead to a doubling of costs, so at 16:07 it stops creating a transaction containing its message
After 90 minutes the bad guy Charlie decides to mention Bob's deal and another deal that spends 1 iota from Alice's address.
At 17:44, he completes the creation of a transaction that refers to a subtangle (subclass) with an erroneous registry state.
None of us cares about this, we do not know about the bad guy Charlie, because our sites continue to receive all transactions and distribute through the network.
At 19:15 a good girl Diana decides to send a message to her mother, she analyzes the Tangle and sees that she does not have to refer to Charlie's transaction, so instead refers to Bob's transaction.
Her transaction is not special, so it is not shown in the picture
A few minutes later the smart girl Eva decides to send a message to her boyfriend. She's good, but she's also smart and decides to troll the bad guy Charlie ...
She finds a transaction that saves 1 iota on Alice's address. She refers to this deal, as well as to Charlie's deal. We see Eva's deal at 19:21
Later, someone else who makes the transaction will refer to the Eva transaction without any problems, because it "fixed" the problem created by Charlie.
As we can see in this scenario for a short period of time, the register can be inconsistent. Everything will be fine if 67% + of the power of the network are controlled by honest users.
To start and synchronize a full node of bitcoin at the moment you need about 4gb of RAM and around 200Gb of hard disk space, which is quite costly in resources + the synchronization process heats up the equipment and slows down the work. IOTA was designed with an emphasis on that it will be run on small devices, like the same kettles. The IOTA protocol will work on microcontrollers with 16Kb RAM, and the circuit weight is several times smaller, because it does not store redundant information.
In addition, the IOTA official website displays the stack of technologies used in IOTA, and it's very cool that they built this stack on the OSI model, and this is exactly what I'm saying in the current situation in decentralized technologies. A chain of blocks is just the first, network layer, you need to make settings on top of it, like a litening network, which allows you to use the block system only as a repository and a more basic level, rather than a foundation. Guys from IOTA chosen this path and it is very progressive.
The more I look at IOTA, the more I like it. Developers of this asset are very deepened in the topic of decentralization and really thought through and corrected all the weak points of the usual crypto-currency, and they got an unusual crypto-currency, turned upside down in everything. But the future is behind this technology, it will certainly be in the trend. I personally have already bought it :).
The information above is an authors personal point of view and does not encourage you to buy any asset.
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