IOTA Platform and MIOTA Coin Review
IOTA is a platform that challenges blockchain technology and collaborates with tech giants. Its own cryptocurrency was created in anticipation of a fast-approaching revolution in the Internet of Things (IoT), where every device will be able to make microtransactions.
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The IOTA platform is recognized for its ability to conduct transactions without fees and lack of conventional blockchain. Its focus is on supporting the Internet of Things (IoT) industry, which is also where the platform's name, IOTA, originated from.
The origin of the IOTA network and MIOTA coin
In 2015, a team of four creators, namely David Sønstebø, Dominik Schiener, Sergey Ivancheglo, and Sergey Popov, came up with the idea of creating a cryptocurrency. They implemented this idea in 2016. However, Kevin Ashton introduced the concept of the “Internet of Things” in 1999. A significant analysis was conducted later in a major article published by Scientific American. This article explored the potential implementation of a computing network that enables gadgets to interact with each other through internet technologies, without human involvement.
Fog Computing is a paradigm that has developed around the Internet of Things since the 2010s. It makes use of cloud technologies by distributing data processing functions over a number of geographically dispersed devices. Upon the popularization of the concept, the Internet of Things market began to grow rapidly, with an average annual growth rate of 23 percent.
It was during this IoT hype that the IOTA ecosystem emerged, managed by the non-profit “IOTA Foundation,” which collaborates with prominent companies and institutional investors. In June 2017, Outlier Ventures… (the text ends abruptly, so the rest of the sentence is missing).
Hackers’ Interest
In addition to honest investors, hackers have also shown interest in the new platform. In late January 2018, it was reported that $4 million had been stolen from network participants' wallets, and a DDoS attack was launched on network nodes to make it more difficult to recover the funds. At that time, many critics highlighted technological issues and vulnerabilities of the network. However, representatives of the IOTA Foundation explained that the theft was not due to a vulnerability in the technology itself. Instead, it was due to users' carelessness who turned to third-party services to create their SEED phrase.
Technological Features of the Network and Tokenomics
Instead of the classic blockchain platform, IOTA uses a Directed Acyclic Graph – DAG (also known as Tangle). The network is based on the “tangled” principle and consists of transactions, where each new agreement approves two previous ones. This approach means that the size and speed of the network depend directly on how many people use the platform. System nodes verify all transactions and reject invalid ones.
This is what the DAG network looks like compared to the blockchain chain.
To enable unlimited free transactions, even microtransactions, IOTA creators set a maximum supply of 2,779,530,283 MIOTA. The system doesn't require mining or staking thanks to DAG and the maximum coin supply. IOTA's market capitalization currently exceeds $625 million, placing it at #78 on Coinmarketcap.
Cryptography and Network Security
Although the IOTA network doesn't rely on blockchain technology, it still requires a relatively simple Proof-of-Work hash puzzle to ensure network security during transaction verification.
For MIOTA, cryptographic signatures based on Winternitz hashing are used instead of elliptic curve cryptography (ECC) due to their high speed. The creators of the cryptocurrency initially used their own hash function called “Curl,” but it was replaced with the “Kerl” function (an implementation of SHA-3) after a significant vulnerability was discovered that allowed for signature forgery.
Can crypto exist without mining?
MIOTA is a unique asset that operates without blockchain technology. There are no requirements for confirmation or mining of transactions, so users do not receive any rewards. Meanwhile, the system does not charge any fees. Transactions can only be made after two previous transfers have been verified, regardless of the size of the transaction.
Because the IOTA network uses DAG technology, each user on the network is technically a validator. Those who are validators help maintain the network and receive rewards without incurring any fees.
IOTA's appeal is based on free transactions. However, as the number of users and transactions on the network increases, transaction fees will be implemented to prevent network overload.
IOTA ecosystem
In the IOTA ecosystem, users are offered the following services:
- IOTA Access – the foundation of access control to resources. It has open-source code used for control and access to “smart” devices and can be integrated into any IoT (cars, sensors, locks, etc.).
- IOTA Streams – a cryptographic platform for creating secure messaging programs. Information streams allow structured and directed secure data movement through the Tangle network. The service combines disparate information into a single and compatible structure.
- IOTA Identity – a protocol for digital identification, a simplified version of a node. It has open-source code, and there is no charge or commission for using the product. The service supports data transfer and value.
- Firefly – a wallet for MIOTA cryptocurrency. The desktop version is developed for Windows, macOS, and Linux operating systems, and the mobile version can be downloaded from Google Play and AppStore.
The native Firefly wallet
In lieu of a conclusion
As the Internet of Things industry becomes more commonplace, MIOTA may become an asset held by all investors. For now, it would be prudent to regard MIOTA as just another speculative asset, based on a promising concept and an alternative to blockchain technology.
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