IOTA (IOT) is the native currency of the IOTA platform designed to maintain, facilitate, and create an incentive for a machine-to-machine economy. It does this by providing an information and transfer system with a protocol that allows near instantaneous, scalable, and secure transactions. The coin is sometimes listed and referred to as MIOTA, which refers to a million IOTA.
The most striking difference about the IOTA platform, compared to others, is that it uses a new distributed ledger technology and quantum-proof protocol, called the Tangle. Instead of the traditional blockchain, Tangle technology uses a method known in mathematics as a Directed Acyclic Graph (DAG). Whereas blockchain is a sequential chain of blocks in which each block references its chronological predecessor, similar to a linked list, with DAG technology each transaction (rather than a block of transactions) references two previous transactions, forming not a linked list, but a complex web structure.
Tangle aims to overcome the inefficiencies of current blockchain designs by introducing a new way of reaching consensus in a decentralized peer-to-peer system. IOTA's transactions are free regardless of the size of the transaction, it claims confirmation times are faster, the number of transactions the system can handle simultaneously is unlimited, and the system can easily scale. IOTA promises that the more people that use the network the more efficient it becomes. This compares favorably to blockchain which is often slower or unusable with increased traffic.
The platform is developed to support the future Internet of Things (IoT), for example, networks of devices such as vehicles, or home appliances that contain electronics and software that interact and exchange data.
The IOTA coin cannot be mined: the entire volume of coins was released immediately at the time of creation. If you are working in IOTA, you do not create new IOTA tokens, but simply confirm other transactions. The total token supply of IOTA is 2,779,530,283,277,761. This value is optimized for ternary computation and is the largest possible 33-digit ternary number.
Longevity of the coin is said to be bolstered by the platforms early high profile strategic partnerships with big brands including Volkswagen, Deutsche Telekom, Microsoft, and Bosche. Because the IOTA platform has the potential to manage vast automated systems, it has the potential to become the source code for IOT, or even the ‘Internet of Everything’ as contracts and transactions get faster.
IOTA was founded in 2015 by a group of entrepreneurs, mathematicians, and developers including David Sonstebo, Sergey Ivancheglo, Dominik Schiener, and Dr. Serguei Popov. In November 2017, the team created the IOTA Foundation which became the first regulated, non-profit in Germany funded exclusively by cryptocurrencies. It oversees IOTA and is dedicated to developing the technology and maintaining it license-free for all developers to work with.
In order to send an IOTA transaction, a user must validate two transactions via a device such as a laptop or a phone. The device performs low difficulty ‘proof of work’, which is essentially just a series of math problems that require a solution. This removes the need for miners and validators, the key benefit is that it prevents centralized mining companies gaining control of the network. In 2018, for example, it was said that just 8 mining pools were responsible for 75% of the Bitcoin mined.