IOTA for beginners

IOTA is a new and groundbreaking distributed ledger that uses no blockchain. IOTA’s innovative, quantum-proof protocol, also known as Tangle, enables unique features such as no transaction costs, fast transactions, infinite scalability, secure data transfers, and more. IOTA initially focuses on serving as the backbone of the Internet of Things (IoT).

As an introduction, I have picked out 2 different videos. A short version:

and a long detailed version:

IOTA has entered into a number of partnerships in recent weeks. For example, with the help of IOTA, automotive supplier Bosch wants to influence the value chain in the automotive and Internet-of-things sector. Bosch is investing in the IOTA currency, which, for example, would allow autonomous e-vehicles to charge directly to a charging station.

Source: Bosch Connected World 2018

No transaction costs

To send an IOTA transaction, a user’s node must acknowledge two other transactions in the tangle (the network). To confirm this, simple POW must be done (simply put mathematical problems to be solved). POW can be used on all modern devices, including laptops and cell phones.

The User and Validator (Miner, Stronger, etc.) are no longer decoupled units in IOTA. This allows for the elimination of a) very much mining and b) the inevitable centralization of validation. Perhaps more importantly, due to the omission of miners, neither new monetary units nor transaction fees need to be removed from the system and IOTA thus works completely without transaction fees.

The proof-of-work in IOTA should not be compared to proof-of-work in a blockchain system. IOTA’s POW is directly comparable to Hascash and has two functions: avoiding spam and Sybil attacks. If necessary, the POW can also be outsourced to, for example, servers.

Infinitely scalable

Since each new transaction forces the sender to confirm two other transactions, more and more transactions are confirmed as the number of senders increases. This means that IOTA scales proportionally with the number of transactions. IOTA’s scalability is roughly illustrated in the following graph.

Fast transactions

The confirmation times of the transactions is inversely proportional to the number of transactions in Tangle. The more transactions, the faster each transaction is confirmed.

The number of all IOTA is limited

All IOTA that will ever exist were generated in the Genesis block. This number will never rise or fall. The number of 2,779,530,283,277,761 ((3 ^ 33–1) / 2) IOTA is optimized for trinary processors and is used with SI units.

IOTA System of Units

quantum Secure

IOTA uses hash-based signatures instead of elliptic curve cryptography (ECC). Not only are they much faster than EEC, they also make signing and confirming transactions easier (and simplifying the complexity of the Tangle protocol).

The tangle

IOTA uses the tangle. This is a software protocol that is fundamentally different from blockchain protocols. The brilliant thing about Tangle is that transactions are processed in parallel. The Tangle differs from the Blockchain in two main points:

1) IOTA can process many transactions per second by processing them in parallel. The larger the tangle becomes with increasing transaction numbers, the faster and safer IOTA becomes.

2) In a blockchain, consensus is achieved through a rigorous mechanism in which multiple parties “fight” each other for the next block and block rewards. Since miner and user are decoupled entities, the block rewards may consist primarily of transaction fees. At Tangle, these entities are no longer decoupled.

To confirm a transaction in a blockchain, a certain arbitrage block creation window must elapse. The tangle allows asynchronous acknowledgment, which means that there are no specific time slots between acknowledgments.

The Tangle is trinary programmed, which is a deviation from the binary code. Trinary is more efficient than binary and allows some improvements in functionality. The Tangle still works on both binary and trinary systems.

Paradigm Shift

You are certainly aware of Bitcoin scaling problems and long office hours due to growing user numbers. The opposite will happen with IOTA. Confirmations of transactions take the longest time when the network is very small and are close to zero if IOTA has a large number of users. Similarly, the capacity of Tangles to absorb new transactions increases as more transactions are performed. This is a new concept that you have to get used to. It is essential to understand that the Tangle does not work optimally before a critical mass has been reached.

Tangle versus Blockchain

Short summary of the history of IOTA

IOTA was presented in 2015 by David Sønstebø, Sergey Ivancheglo, Dominik Schiener, and Dr. med. Serguei Popov founded. Serguei Popov, who has a doctor of mathematics, laid down the necessary mathematical foundations of the tangles, which were programmed by Sergey Ivancheglo and Dominik Schiener. The project is led by David Sønstebø, a business and technology expert. This team has been active in the crypto scene for many years.

To support the founders as well as the growing development team, a significant part was donated to launch the so-called IOTA Foundation. The IOTA Foundation is a charitable foundation based in Berlin. In addition to the original funding, the Foundation may receive government grants and company support.

Furthermore, the IOTA community has successfully donated for the realization of the so-called “Big Deal”. This deal helps to build collaborations with several large companies of the IoT, which at the moment can not be named due to secrecy.

IOTA entered the public BETA test phase in the summer of 2016.

Finally, it has to be mentioned that the IOTA Foundation also works on hardware for the IoT (JINN). Details will appear in the future.

In our next articles, we’ll show you

how to safely buy IOTA’s

how to build a safe Wallet and

how you can earn with services related to IOTA

Our own IOTA idea

Our project idea is called “public IOTA”. In this way, we want to create a platform with which we will make IOTA and its applications more widely known to the public and present concrete IOTA projects (applications) in detail. It should not be a platform for developers or people who already know very well about IOTA and the Tangle, but a platform that is intended with the most diverse media formats for the wider public. Furthermore, the possibilities of investing in IOTA or the technologies that use IOTA should be better known, so that everyone can profit from it.

When the baker tells the customer about the applications of IOTA, the hairdresser is enthusiastically talking about his fullnode and the grandma is dancing the Tangle and telling her grandchildren about the IOTA facility, IOTA has come out of the niche and arrived in the general public , as far as our idea.


Thank you!


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