Top Things You Should Know About IOTA (MIOTA)

Top Things You Should Know About IOTA (MIOTA)

By MuyAsk | Crypto Truth Lexicon | 10 Feb 2020


Hey guys :) Now that the altcoin market is heating up once again, I’ve compiled an information-packed peace on IOTA (MIOTA) to help you fundamentally understand what this popular cryptocurrency project is all about. Hope you enjoy it!

The list of Q&A is pretty long so first comes the list of questions that I have prepared the answers to:

  1. What is IOTA?
  2. Who and When Created IOTA?
  3. How many IOTA (MIOTA) tokens are out there?
  4. What is IOTA's (MIOTA) token used for?
  5. What is The Coordinator and When will it be removed?
  6. Is IOTA an ERC-20 token?
  7. Is IOTA Decentralized?
  8. How is IOTA's tangle different than blockchain?
  9. What is IOTA’s Qubic Protocol?
  10. Does IOTA have an explorer?
  11. Can you stake IOTA?
  12. What is the IOTA Foundation?
  13. Where can you Buy IOTA?
  14. What are some of IOTA’s notable partnerships?

1. What is IOTA?

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IOTA website homepage

According to the official IOTA website, IOTA is a permissionless distributed ledger for a new economy. The project is open-source and is being built to power the future of the Internet of Things (IoT) with feeless microtransactions and data integrity for machines.

IOTA differs from most other cryptocurrency projects because its network is not based on blockchain technology, but rather a newer “revolutionary” distributed ledger technology (DLT) called the Tangle.

With IOTA’s Tangle DLT, the project aims to solve the inefficiencies of the blockchain such as sluggish transaction times and skyrocketing fees. In doing this, IOTA hopes to power a secure, scalable, and feeless transaction settlement layer for the Internet of Everything and Web 3.0.

“Our vision is to enable all connected devices through verification of truth and transactional settlements which incentivize devices to make available its properties and data in real time. This gives birth to entirely new general purpose applications and value chains.” – The IOTA Foundation

In other words, IOTA’s vision is to usher in and build a new shared economy by enabling the true Internet-of-Things with its permissionless DLT.

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IOTA's Vision

To bring this vision to life, IOTA has employed a number of unique features into Tangle.

IOTA Unique Features:

Highly Scalable
IOTA’s proprietary distributed ledger technology, the Tangle, is exponentially scalable. As network activity increases on the Tangle, transaction settlement times decrease. (More on this in another section). 

Low Resource Requirements
IOTA’s Tangle is designed for the Internet-of-Things and therefore has a high level of connectivity and enables tiny devices, such as sensors, to participate.

Zero-Fee Transactions
IOTA’s distributed ledger network has zero transaction fees no matter how large the transaction is. If you send 1 cent you receive 1 cent, or if you send $1,000,000 you receive $1,000,000. This is one of IOTA’s key features in enabling the Internet of Everything. 

Secure Data Transfer
IOTA ensures the integrity of data by encoding it, which allows for secure data transfer, storage, and reference.

Offline Transactions
IOTA enables offline transactions by allowing nodes to download a history of transactions and using this as a starting point to enable temporary transactions. Once the node comes back online, the offline transactions are broadcasted to the rest of the Tangle. Therefore, devices never need perfect connectivity.

Quantum Immune
While traditional blockchain technology may one day be threatened by quantum computing, IOTA’s Tangle uses special signatures that are resilient to the next generation of quantum computing. 

2. Who and When Created IOTA?

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Founding team behind IOTA

IOTA was founded in 2015 by David Sonstebo, Sergey Ivancheglo, Dominik Schiener, and Dr. Serguei Popov.

All of the above-mentioned gentlemen were early Bitcoin adopters and blockchain enthusiasts since 2011. They had a great deal of experience working with blockchain technology and prior to IOTA, they worked on a project called Annex II, the first proof-of-stake (PoS) project.

According to David in a Forbes interview, he said that by working on the Annex II project, they realized that blockchain technology simply could not scale at the time. He said it wasn’t capable of doing many of the things blockchain technology is often touted to do. 

Therefore, David and Sergey began thinking about how distributed ledgers could be applied to the Internet-of-Things, where huge amounts of data and value are transferred between machine-to-machine interactions. 

After thinking about this for quite some time, David and Sergey established a draft of IOTA’s very early Tangle by late 2014. Then, in 2015, they started perfecting it, optimizing it and announced it to the world.

The Official Launch of IOTA (MIOTA) Cryptocurrency

The IOTA (MIOTA) cryptocurrency was officially launched to the world from November 24 to December 20, 2015, through an initial coin offering (ICO). 

During the ICO, the team of founders behind IOTA raised a little over $500k USD worth of Bitcoin and other cryptocurrencies for selling the entire token supply (which can never change) to the ICO crowd sale participants. 

Throughout 2016, IOTA’s Tangle was in beta and the IOTA cryptocurrency was only traded over-the-counter. It wasn’t until June 2017, that the  IOTA cryptocurrency was listed on its first exchange, Bitfinex. 

This is when the IOTA cryptocurrency really took off and reached a peak price of $5.31 and a market cap of over $14 billion in December 2017.

3. How many IOTA (MIOTA) tokens are out there?

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Total IOTA (MIOTA) Tokens and System of Units

The IOTA cryptocurrency has a total fixed supply of 2,779,530,283 MIOTA tokens. Also, this entire total supply has already been fully distributed and is already in circulation.

During IOTA’s ICO, the entire token supply (which can never change) was distributed pro-rata to the crowd sale participants on the genesis transaction. 

According to the team behind IOTA, all of IOTA’s cryptocurrency tokens were distributed to ICO participants, “without any pre-allocation or special treatment of any kind to any of the Founders or developers”.

However, it is believed by some that the IOTA team later acquired a great amount of IOTA’s total supply in over-the-counter trading deals throughout 2016. In fact, it’s speculated that the creators of IOTA own roughly 50% of all the available tokens (~1,390,000,000 MIOTA). 

Whether the above statements are true or not are up for debate, but it had to be stated nonetheless.

The IOTA cryptocurrency tokens could be purchased at a rate of 1 MIOTA = 0.00059 USD (0.00000133 BTC) during the ICO. 

Moreover, following the ICO, the IOTA founders asked the initial IOTA token holders to donate a portion of their holdings back so that they could endow the IOTA Foundation. By asking this, IOTA received roughly 5% of the total IOTA token supply back and established the IOTA Foundation. 

4. What is IOTA's (MIOTA) token used for?

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IOTA Logo

IOTA’s (MIOTA) cryptocurrency is a utility token for the IOTA Tangle network and it’s heavily utilized across a wide number of potential use cases such as:

  • Real-time streaming payment services for data and energy
  • Immutable data history tracking for supply chains
  • Computational resource sharing (for bandwidth, CPU, and storage)
  • Peer-to-peer (P2P) payments and feeless machine-to-machine microtransactions

All in all, IOTA is building the transaction settlement and data integrity layer for the Internet of Everything which includes smart cities, smart grids, infrastructure, supply chain, financial services, peer-to-peer payments, insurance, and much much more. 

That being said, IOTA and its MIOTA cryptocurrency token are currently focusing on the following real-world use cases:

IOTA’s Real-World Use Cases

Mobility & Automotive

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Connecting vehicles to the Internet-of-Things 

IOTA’s cryptocurrency, MIOTA aims to become the standard for transactions and sharing data in a future of accessible, affordable, and sustainable transportation. With IOTA’s feeless microtransactions, MIOTA can be used to pay for parking, tolls, energy, carpooling, and so much more. 

Global Trade & Supply Chains

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IOTA's simplified Supply Chain structure

Supply chains supported by IOTA’s distributed ledger would allow for documents and data to be reported in real-time and made available to authorized actors. This greatly increases the level of transparency and reduces costs associated with supply chains and the transferring of data and value.

Industrial Internet of Things (IoT)

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A look inside an IOTA-enabled Smart Factory.

IOTA will enable data-driven infrastructure & new business models across a wide variety of industries such as Manufacturing, Agriculture, Automotive, Oil & Gas, Wind Power, Mining, and more.

eHealth

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IOTA provides trust in data, which is greatly needed in healthcare and can enable a transition from an institution-centric model to a citizen-centric model of healthcare.

Smart Energy

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A smart energy community powered by IOTA

The energy market is moving towards the Internet of Everything and IOTA enables smart transformation across the whole Energy sector by empowering producers, consumers, and stakeholders. 

5. What is The Coordinator and When will it be removed?

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The centralized Coordinator maintaining IOTA's network

The coordinator in IOTA’s Tangle network is like a centralized protocol node that the IOTA team installed to maintain the network’s security until it becomes more mainstream with more users and more transactions. 

The coordinator was necessary for IOTA’s early days because the cumulative throughput of transactions is what secures the IOTA network. The more transactions that occur, the more secure the network becomes.

And this is because, in IOTA’s Tangle network, transactions only take place after the confirmation of the previous two transactions by the originator of the transactions themselves. Therefore, as verifications spread throughout the network, the network becomes “tangled” and more secure.

What does The Coordinator do?

IOTA’s centralized coordinator implements additional security measures, such as checkpoints, which come in the form of 'milestone' transactions issued by The Coordinator. 

These transactions issued in the Tangle by The Coordinator have a location tied to them, and all other transactions should not be considered confirmed until they are directly or indirectly referenced by The Coordinator’s transactions. 

This centralized aspect helped to secure IOTA’s tangle network early on but prevented the network from being decentralized. 

As time went on, the team behind IOTA struggled to remove The Coordinator because the network just wasn’t ready in terms of adoption. Many people even doubted that IOTA would ever be able to remove The Coordinator.

However, IOTA’s team realized something had to be done which is why they are replacing The Coordinator with another protocol system called Coordicide. 

What is Coordicide?

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Coordicide website homepage

Coordicide is known as the most important step to date in the maturity of the IOTA protocol as it is removing The Coordinator with an innovative system of decentralized governance to secure data and crypto assets on the network.

The Coordicide protocol can be broken down into five building blocks and will be implemented throughout a series of phases:

There is no set date as to when Coordicide will be implemented on IOTA’s mainnet, but the IOTA team is working through the phases now. In fact, IOTA recently released Coordicide Alphanet, which is a step forward in making IOTA a fully decentralized network.

Additionally, IOTA has already completed a number of goals towards its implementation of Coordicide and they are conducting on-going research and development for a number of other goals. You can track IOTA's progress with Coordicide on their Coordicide Alphanet roadmap page.

6. Is IOTA an ERC-20 token?

No, IOTA (MIOTA) is not an ERC-20 token on the Ethereum blockchain. It runs on top of its own network, Tangle. 

IOTA is completely different than Ethereum and doesn’t even run on top of blockchain technology. IOTA is built on top of Directed Acyclic Graph (DAG) technology which is different from blockchain technology.

Therefore, IOTA’s (MIOTA) cryptocurrency is not compatible with Ethereum-based ERC-20 token wallets and many other standard blockchain wallets. 

IOTA wallets are unique to themselves and for the most part, only support IOTA (MIOTA) cryptocurrency tokens.

Best IOTA (MIOTA) Wallets:

7. Is IOTA Decentralized?

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IOTA's Tangle Network

As IOTA stands today (February 2020) it is NOT fully decentralized.

As previously mentioned, the team behind IOTA implemented a centralized protocol called The Coordinator into IOTA’s Tangle network to maintain its security and verify transactions.

Currently, IOTA is in the process of removing the centralized Coordinator and replacing it with Coordicide – the next step in IOTA’s evolution that will realize IOTA’s dream of a decentralized, permissionless, and scalable distributed ledger technology (DLT).

Once Coordicide is fully implemented on IOTA’s mainnet, The Coordinator will be forever removed and no entity will have a special role in the network. IOTA will become completely decentralized and it will not be possible for the IOTA Foundation to restart it.

8. How is IOTA's Tangle different than Blockchain?

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Blockchain vs DAG

IOTA’s Tangle network is based on Directed Acyclic Graph (DAG) technology as opposed to blockchain technology. While there are many similarities between these distributed ledger technologies, there are also many differences. 

See their differences below:

Data Structure

A blockchain is a sequential chain of blocks with each block containing transactions being added to the blockchain in discrete time intervals. Therefore, each block references its chronological predecessor. 

In Tangle, each transaction (rather than a block of multiple transactions) references two previous transactions which forms a complex web structure (rather than a linked list). 

Scalability

Proof-of-Work (PoW) Blockchains are generally slow and difficult to scale because transactions must wait for the blocks of transactions to be mined which results in slow confirmations. While this is a secure method that prevents double-spending of coins and secures the network, it’s not very scalable on-chain.

IOTA’s tangle improves scalability by allowing all transactions through instantaneously and cleans up any conflicting transactions using the "heaviest Tangle" rule:

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Visual representation of IOTA's Tangle network

Consensus

Blockchain achieves consensus through PoW mining of blocks and the "longest chain" rule. This rule means that transactions cannot be confirmed until a significant number of blocks have been built on top of it. 

With IOTA, it follows the “heaviest Tangle” rule rather than the “longest chain” rule. Therefore, the more transactions occurring in the IOTA tangle, the faster transaction finality becomes.

Security

Blockchains like Bitcoin are secured through PoW mining with more miners (more hash power) making the network more secure as it would be very expensive for someone to overrun the network with more hash power. 

With IOTA’s Tangle, every transaction has a tiny amount of PoW that's added using IOTA's curl hash function. Therefore, as more and more transactions occur, more and more cumulative PoW is added, which makes the system more secure to attacks. 

Transaction Fees

In IOTA’s Tangle, there are no miners and transaction validation is an intrinsic part of issuing a transaction, therefore there are no transaction fees. Every participant sending transactions in IOTA’s Tangle network allows it to function at scale without the need for miners and fees.

All in all, IOTA’s tangle is far more scalable than blockchain technology but it’s also far less tried and tested. As well, IOTA’s Tangle network is not yet fully decentralized and hasn’t fully proved itself that it works as described. 

9. What is IOTA’s Qubic Protocol?

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Qubic website homepage

Qubic is a quorum-based computation protocol that specifies IOTA's solution for oracle machines, smart contracts, outsourced computations, and more.

The Qubic project intends to establish a global decentralized platform that enables everyone to create new trustless applications, participate in new economic models, and enable the broad landscape of Web 3.0 and Industry 4.0.

Essentially, Qubic intends to become a platform that is similar in nature to Ethereum’s platform. It’s meant to become an IOTA-based world supercomputer, which is much like the Ethereum Virtual Machine (EVM).

It will allow people from around the world to leverage unused computing capacity for a myriad of computational needs and would help secure the IOTA Tangle network as a result.

Solutions offered by Qubic:

Oracle Machines

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Qubic’s oracle machines will access external data and provide the input data relevant for quorum-based computational tasks. Some examples of this input data include:

  • Temperature data from real-world sensors
  • Current or historical stock value data from the stock market
  • Personal attributes, like current age, marital status, deceased status
  • Election results

Outsourced Computations

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Qubic enables IoT devices to outsource intensive computations to the global, decentralized Qubic platform. The process takes place in a decentralized and secure way, ensuring that the results can be trusted.

Smart Contracts

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Qubic will support traditional smart contracts just like other smart contract platforms, but what makes Qubic smart contracts different, is that they’re combined with zero-fee transactions and general-purpose quorum-based computation. Combining these aspects with smart contracts will open up the door to new and more complex possibilities.

10. Does IOTA have an explorer?

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TheTangle.org Explorer

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IOTASearch Explorer

The IOTA Tangle network has two popular explorers, TheTangle.org and IOTASearch

Both of these explorers are similar to traditional blockchain explorers used by Bitcoin and Ethereum and enable users to search for the following:

  • IOTA Addresses
  • Transactions
  • Bundles
  • Tags

Additionally, users can view the number of transactions per second, transaction confirmation times and rates, IOTA (MIOTA) price, IOTA (MIOTA) market cap, 24hr volume, latest milestones, and much more.

Also, TheTangle explorer website features multiple other statistics including:

  • Richest addresses - Top 100 addresses with the biggest balance
  • Tokens distribution - Tokens distribution between addresses
  • Most popular tags - Top 100 most popular tags used in transactions
  • Most popular addresses - Top 100 most popular addresses by sent and received transactions

Apart from IOTA’s Tangle explorers, the project also has an IOTA Ecosystem explorer.

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IOTA Ecosystem Explorer

The IOTA Ecosystem explorer features various Projects, Events, Tutorials, Articles, Academic Research, and Communities within the IOTA ecosystem.

11. Can you stake IOTA?

No, you cannot stake IOTA. 

IOTA does not utilize a Proof-of-Stake (PoS) nor a Proof-of-Work (PoW) consensus mechanism to secure its network. Instead, IOTA’s Tangle network relies on the large flow of “honest transactions” with a tiny amount of PoW attached to each. 

This arbitrary cost on each transaction makes it costly for a malicious actor to generate a substantial proportion of the total transactions occurring on the IOTA network. Also, each transaction achieves confirmation after the confirmation of the previous two transactions.

Therefore, IOTA’s extremely high transaction throughput with many transactions is what secures the IOTA Tangle network. Neither mining or staking is required to secure the network and gain consensus in IOTA’s Tangle network.

12. What is the IOTA Foundation?

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The IOTA Foundation is a non-profit, open-source organization with the focus to develop the next generation of protocols for the connected world with IOTA distributed ledger technology (DLT) and other related technologies.

The IOTA Foundation was established in Germany in 2017 by Dominik Schiener and David Sønstebø. During its establishment, the IOTA Founders asked early IOTA adopters to donate a portion of their holdings to the foundation to help with funding. This resulted in the IOTA Foundation receiving roughly 5% of the total IOTA supply in donations. 

Additionally, the IOTA Foundation has since received unclaimed tokens from the initial crowd sale, grants from governments to perform research and development, and further donations from individuals and enterprises. 

With all of this funding, The IOTA Foundation’s primary goals are:

Research
The Foundation continuously conducts research for IOTA’s foundational protocol layer and creates new knowledge to benefit the IOTA ecosystem behind the economy of things. Many academic research papers have been published by the IOTA Foundation.

Develop
Leading developers work on the IOTA core protocol development, theory to working code, protocol standardization, and new technologies. They also develop production-ready software for the community, partners, and ecosystem to use and expand upon.

Educate
The Foundation publishes blog posts, promotes, and spreads awareness about IOTA’s potential and use cases for the economy of everything.

Standardize
They focus on industry adoption, account management, proof-of-concept development, strategic development, and alliance management to standardize the widespread adoption of the economy of things.

Moreover, the IOTA Foundation is governed by a formal charter that includes:

  • A Governing Board - to set and achieve the Foundation’s vision and run its operations.
  • A Supervisory Board - to guide and oversee the performance of the Governing Board.
  • An Advisory Board - to provide independent advice, perspective, and direction.

13. Where can you Buy IOTA?

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You can Buy IOTA on Binance

IOTA is one of the most popular cryptocurrencies and can, therefore, be bought, sold, and traded on many major digital currency exchanges. Typically though, for the majority of exchanges, you will have to fund your account with fiat, buy BTC or ETH, and then buy IOTA (symbol MIOTA). 

However, since IOTA is built on top of DAG tech rather than blockchain tech, it is more difficult for exchanges to support. Therefore, some of the leading cryptocurrency exchanges do not support IOTA.

That being said, see a list of the top exchanges to buy MIOTA below:

  • Binance
  • Huobi 
  • Bitfinex
  • Gate.io
  • OKEx
  • HitBTC
  • Coinex
  • Coinone
  • Upbit
  • Bitpanda

14. What are some of IOTA’s notable partnerships?

Out of all the 5000+ cryptocurrencies out there, IOTA is one of the leading cryptocurrencies when it comes to partnerships and known entities interested in IOTA. 

According to stats from IOTA Archive (an IOTA ecosystem tracker), there are a total of 700 unique entities with a known interest in IOTA. 

IOTA’s ecosystem of connections include:

  • 121 official partnerships/collaborators
  • 174 entities engaged in joint projects with the IOTA Foundation
  • 84 known IOTA Data Marketplace participants
  • 93 entities that developed one or more IOTA-based proof-of-concept
  • 390 academic references from 235 academic institutions

The total of 700 unique entities with a known interest in IOTA is collaborating with IOTA, in some way, in the following industries:

  • Academia (233)
  • Automotive (1)
  • Communication (16)
  • Consulting (18)
  • Electronics (33)
  • Ended (5)
  • Energy (41)
  • Finance (39)
  • Health (6)
  • Information Technology (138)
  • Infrastructure (37)
  • Mobility (38)
  • Policy (33)
  • Other (45)

IOTA’s most notable partnerships/collaborations include:

  1. Microsoft (Source)
  2. Volkswagen (Source)
  3. Mobility Open Blockchain Initiative (MOBI) (Source)
  4. DnB (Source)
  5. BOSCH (Source)
  6. Fujitsu (Source)
  7. Audi (Source)
  8. SinoPac (Source)
  9. ENGIE Lab CRIGEN (Source)
  10. Jaguar Land Rover (Source)
  11. AKITA Blockchain Solutions (Source)
  12. Alliander (Source)
  13. Avery Dennison (Source)
  14. Topocare (Source)
  15. IAMPASS (Source)

All in all, it’s safe to say that IOTA’s ecosystem is truly expansive and they have many partnerships/collaborations with very notable companies.

Hope you enjoyed that read :) Let me know if I have missed something in the comments.


MuyAsk
MuyAsk

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