Iota is a relatively new virtual currency launched in 2015 that is often said to be reinventing the Internet of Things (IoT), and widening the range of applications for blockchain technology. The number of connected devices worldwide is increasing exponentially, and is expected to reach a figure of around 50 billion within the next decade. In the context of this rapid expansion in connectivity, Iota offers new opportunities for interoperability and resource sharing that will power a host of new B2B models.
Iota is at the core of the new machine-to-machine economy. It is the cryptocurrency of the IoT based on a new innovation called Tangle, which gives it 4 main advantages over other digital currencies: Iota is free, scalable, decentralised and modular.
Iota doesn’t use blockchain in the same way as other cryptocurrencies like Bitcoin, as there is essentially no block and no chain. Tangle, the technology underpinning the Iota system, is an entirely new data structure based on the Directed Acyclic Graph (DAG) approach.
As the Iota white paper explains, “the main idea of Tangle is the following: to issue a transaction, users must work to approve other transactions. Therefore, users who issue a transaction are contributing to the network’s security”.
If there is no mining process to validate transactions, there are no associated fees. With Iota, the users themselves are the ones validating the transactions, rather than miners of other cryptocurrencies who are operating, but not using, the system. It’s also easier to scale, as the higher the number of Iota system users, the faster the system works. Iota seems to have overcome a fundamental drawback of the Bitcoin economy – the more users there are of the world’s leading altcoin, the slower the system becomes.
To sum it up in simple terms, Iota isn’t based on a “traditional” blockchain, since there is no block, no mining, no transaction fees and because there is effectively infinite scalability. Iota isn’t only a currency, but a protocol used across the IoT to enable the new machine economy.
Most cryptocurrencies trading brokers worldwide provide opportunities on Iota, Bitcoin, Ethereum, and other altcoins, making it easy for novice traders and experienced investors alike to open positions on the world’s leading cryptocurrencies. However, using a first-class broker like UFX.com will give you a competitive advantage over other traders, since you will enjoy instant access to all the latest trading innovations, plus some of the industry’s most advanced and professional tools.