What Do You Need To Know About IOTA?
With many cryptocurrencies today, it is effortless to get lost in them if you try to learn about each one. Even the most relevant today require much dedication to keep track, crypto investing isn’t an easy task due to high volatility which already begs for regular vigilance. Now, try to keep track of more than 700 different names. The result is missing out on great projects such as IOTA.
However, to help you not miss great opportunities for you to invest in, we are giving you this quick guide on IOTA with all the basics about its functioning and how it is different from other cryptocurrencies found in the market today.
What Is IOTA?
It is an open-source distributed ledger, just how other cryptocurrencies are, fundamentally.
It focuses on providing safe payments and communication between computers interacting through the Internet of Things.
What differentiates it from regular cryptocurrencies, however, is that it doesn’t use the traditional blockchain we all know today. It uses a technology called “directed acyclic graph” called the “tangle”, which is what makes it function differently from its competitors and gives it unique advantages exclusive to its design.
IOTA has gained a lot of support from many sources; from SatoshiPay and Robert Bosch Venture Capital to some unexpected such as the Tokyo Metropolitan Government, who invited the IOTA foundation to its Blockchain Business Camp Tokyo along with companies like Sony and Toyota.
How Does It Work?
It is unique in that there is no traditional mining such as PoW (where computers solve complex equations to discover blocks and confirm transactions) or not even PoS (where users lock coins for them to stake and generate new coins).
The way IOTA maintained through the tangle distributed ledger and the way it manages transaction validation.
You see, with IOTA; whenever a user wishes to send coins to another, they must validate two other operations that are randomly selected. That eliminates the need to maintain mining pools and people dedicated to this verification process, thus removing mining fees.
For transmissions to complete, they must accumulate enough validations.
While IOTA currently works with a single administrator dedicated to confirming all transactions in a set of milestones (and, without it, it isn’t considered secure), this only meant as a temporary measure set to remove once the network grows enough.
IOTA released a public data marketplace to monetize the market for the massive amounts of data generated every day. This project has earned the support of global organizations including Microsoft, Orange S.A, and Fujitsu.
As you cannot mine it, the only way to obtain the cryptocurrency is through trading, crypto exchanges, or receiving them as payments.
Current exchanges that support the cryptocurrency include Bitfinex, CoinOne, Binance, and CoinSpot.
Once acquired, one would need a digital wallet. The official IOTA wallet is available through their Github, and you must independently generate your private key.