IOTA is a public distributed ledger that stores transactions in a directed acyclic graph (DAG) structure, called a Tangle. The Tangle removes the cost of the energy inefficient mining process required by many bitcoin based cryptocurrencies. Instead each transaction helps confirm previous transactions on the network, allowing microtransactions to be made without transaction fees.
IOTA is a cryptocurrency designed specifically for the Internet of things (IoT), IOTA enables secure sale and sharing of data streams.
In November 2017, Microsoft’s Blockchain specialist, Omkar Naik was quoted saying “We are excited to partner with IOTA foundation and proud to be associated with its new data marketplace initiative. This next generation technology will accelerate the connected, intelligent world and go beyond blockchain that will foster innovation real world solutions, applications and pilots for our customers”. Several online publications subsequently ran misleading articles claiming a Microsoft and IOTA Foundation partnership without noting the context of the data marketplace, or the Trusted IOT Alliance. The Iota Foundation was derided when it clarified no formal partnership existed. Despite being a founding member, Microsoft is no longer listed amongst companies participating in the Trusted IOT Alliance, or IOTA Foundation’s data marketplace to avoid further confusion.
The economy of things
As the Internet-of-Things keep expanding, the need for interoperability and sharing of resources become a necessity. IOTA enables companies to explore new business-2-business models by making every technological resource a potential service to be traded on an open market in real time, with no fees.
Ledger of things
In this new autonomous Machine Economy IOTA will be the backbone. The Tangle ledger is able to settle transactions with zero fees so devices can trade exact amounts of resources on-demand, as well as store data from sensors and dataloggers securely and verified on the ledger.
The main innovation behind IOTA is the Tangle, a revolutionary new blockless distributed ledger which is scalable, lightweight and for the first time ever makes it possible to transfer value without any fees. Contrary to today’s Blockchains, consensus is no-longer decoupled but instead an intrinsic part of the system, leading to decentralized and self-regulating peer-to-peer network.
For the first time ever true micro and even nano-transactions are enabled due to the unique IOTA Tangle architecture, providing developers with a brand new set of tools for their applications in both IoT and Web. This nurtures brand new business opportunities for companies that prohibitive fees has kept in the realm of the impossible until now.
Core feature of IOTA is the ability to transfer data through the Tangle. IOTA gives you several options to do so, making it possible to establish secure and authenticated communication channels between devices. All data which is transferred through IOTA is fully authenticated and tamper-proof – making attacks impossible.
Although IOTA is uniquely suited for the Internet-of-Things, the Tangle enables a variety of different use cases that involve secure data transmission, especially for eGovernance. An important part of this sector is e-Voting. The exploration into this field of use-cases has already begun by several companies and academics.
As the first extensible module of the IOTA core, MAM enables nodes to exchange data through the Tangle, fully authenticated and encrypted. This means that your devices can transmit valuable and sensitive data with quantum-proof security through the Tangle, ready to be analyzed later. MAM makes it possible to share data with multiple parties easily, similar to a radio, multiple parties can simply tune in on your frequency and get the broadcast data.
Everything as a service
While the whole world has adopted the ‘Sharing Economy’ in areas like driving and accomodation, IOTA enables a whole new realm where anything with a chip in it can be leased in real time. Most of our belongings stay idle for the vast majority of time that we possess ownership of it, but through IOTA a lot of these things like Appliances, Tools, Drones, eBikes etc. and resources such as computer storage, computational power, WiFi bandwidth etc. can be turned into leasing-services effortlessly.
Anything that needs a scalable ledger
The distributed ledger revolution has only barely begun, the vast majority of use-cases has not even been thought of yet, and with the next generation ledger that IOTA created developers will be able to invent even more solutions.