IOTA: An open-source distributed ledger (Review)

Bconomist News
Dec 19, 2017 · 8 min read

What is IOTA?

IOTA technology is an open-source distributed ledger, i.e., cryptocurrency which aims at providing private and secure communications and transactions between machines on the Internet of Things (IoT). IOTA’s technology is usually free regardless of the size because of the usage of directed acyclic graph (DAG) technology rather than the traditional blockchain method. In addition to this, confirmation times are swift and, there is the unlimited ability of the system to handle a number of transactions simultaneously. The technology is developed and maintained license-free so that all developers can quickly work with it.

The Tangle is the main innovation behind IOTA, a revolutionary new block-less distributed ledger which is known to be scalable, lightweight, and for the first time recorded; to make value transfers possible without the inclusion of fees. The significant difference from today’s blockchain is that consensus is no more decoupled but instead, becomes an intrinsic part of the system which leads to a decentralized and self-regulating peer-to-peer network.

Below are various activities carried out by IOTA over the years since its inception in 2015.

IOTA Clarifies Misleading Microsoft Quote No Official Partnership

There have been several controversies surrounding the partnership between IOTA with Microsoft, and recently, such discussion was clarified. The IOTA team made a public clarification that there is no formal partnership with Microsoft as regards the misinterpreted quotes from Microsoft on IOTA’s official blog which made an open announcement about IOTA’s Data Marketplace. This quote got reactions from several investors and sponsors that saw it as a formal partnership between the two companies. The exact quote from Microsoft Blockchain specialist, Omkar Naik reads:

“We are excited to partner with the IOTA Foundation and proud to be associated with its new data marketplace initiative.”

According to an email interview with the IOTA co-founder, he defended his company’s role in the misunderstood quotes and disclosed that Microsoft was placed on the list of marketplace “participants.” His words were:

“We have never mentioned that any of the companies which are participating in the marketplace are our ‘partners.’ We call them participants.”

On Microsoft’s end, when asked about the nature of their involvement in IOTA’s Data Marketplace, they explained that IOTA is just a customer of their Azure product which would be used to test and deploy their Data marketplace.

“IOTA is a Microsoft Azure customer and plans to use Azure to test and deploy its Data Marketplace.”

However, irrespective of their official agreement, the two companies are known to be working together on various technology exercises which involves IOTA’s Tangle network. Such experiments include installing and connecting weather sensors to IOTA’s distributed ledger technology.

IOTA Drops 15% Following Clarification with Microsoft Misunderstanding

Recently, the price of the cryptocurrency IOTA has retreated to as low as about $4.20 per token, exactly after the breach of the $5 level to an intraday high of about $5.03. This drop could be due to the recent clarification that was made by IOTA as regards the partnership with Microsoft. The recognized cryptocurrency has failed to sustain changes and momentum and has recently been overtaken by Litecoin, which is known to be the fifth largest virtual currency as regards market capitalization.

The price movements of Litecoin and IOTA goes in such a form that Litecoin, which is always suggested as the crypto market’s silver to Bitcoin Gold, boosts daily, i.e., every 24 hours with about a sum of $4 billion trading volume. At press time, the digital currency is trading at about $300. However, on IOTA’s end, a 10% price loss has been registered on the trading volume of just slightly below (approximately) $500 million.

More than 40% of the known IOTA transactions were conducted on Bitfinex, a major virtual currency exchange which is known to be the first to provide support for the IOT currency. Another trading platform for IOTA is the Chinese exchange Binance, which accounted for about 25% of the trading volume; and another one from South Korea called Coinone, which conducted about 12–14% of the total transactions.

Lastly, the IOT also recently registered a major rally of its own, and in just over a week, IOTA’s price had an increase of about 450% after the official announcements of its Data Marketplace. This Data Marketplace had a misleading impact as regards partnership with Microsoft, and the reaction to this news by sponsors and investors led to a record price peak of $5.55 as at December 6th.

IOTA Interview: “Trust Systems are absolutely pivotal” today.

The value of the IOTA cryptocurrency, MIOTA has increased massively. According to CoinMarketCap, the company has moved from 9th to 4th as the largest market cap, hereby displacing Ripple, a long-standing 4th place-holder. For detailed explanation of what caused this massive explosion in value, Cointelegraph did a catch up on the co-founders of IOTA (Dominic Schiener and David Sonstebo) to get their views on what factors led to the recent events.

The interview between Cointelegraph and IOTA co-founders goes:

Cointelegraph: The massive rise of MIOTA over the past few weeks must have been encouraging. In your opinion, what led to the explosion in price?

IOTA: IOTA has been under crucial, critical, and intensive developments for over two years and no money has been spent on marketing. Our focus was on making the next generation distribution ledger technology a reality, and in this period, there is a refusal in exchanges listing IOTA to ensure everything was working perfectly and properly before it goes into the market.
This development explains why IOTA is getting a lot of public attention. People obviously have been following the project for a long time and are finally able to enter. Further validation was as a result of the listing in Korea at Coinone in conjunction with the launch of Data Marketplace and subsequent media coverage. All this makes IOTA a leading cryptocurrency and a distributed ledger protocol. This is believed to be the starting point of people who have been observing IOTA from a distance.

Cointelegraph: What specifically is the recent partnership with Microsoft and Fujitsu all about?

IOTA: Microsoft is one of the cloud solution providers with their Azure platform. Fujitsu, Samsung ARTIK, Accenture, and many others are participants in the Data Marketplace exploring the concept of trading safe, secure, and immutable data on a decentralized ledger. These are the first initial steps towards an open flow of data in IoT to realize the Big Data vision.

Cointelegraph: How is your platform Tangle different than Traditional Blockchain?

IOTA: The simple thing is IOTA goes beyond Blockchain in getting rid of scaling limitations, fees and centralization issues. This is done by making validation an intrinsic property of using the protocol. When a transaction is issued in IOTA, there is a validation of two previous ones, which also, in turn, references their own respective transactions and so on, thereby building DAG (directed acyclic graph) which we call a Tangle.

This also means users are validators, which allows miners to be gotten rid of and also get rid of fees and centralization that usually occurs in Blockchain architecture. The more the activity, the more the validation.

Cointelegraph: How do you see trust systems changing in the future?

IOTA: Trust systems are absolutely pivotal in an age where decisions are automated and can act globally in an instant. It is believed that Data integrity which is gotten for free in IOTA, is a main component of this. Beyond that, work is going on Identity of Things (IDoT) which makes it easier to safely secure components and develop reputation systems to detect for intrusions and malware protection etc.

IOTA: Bridging Gaps Between the Major Cryptocurrency Paradigms

Recently, cryptocurrency use has become widely acceptable and mainstream, and in the last 6 months, there have been significant developments in crypto’s progress towards widespread adoption. Cryptocurrencies that have easy accessibility, provide versatility, and bring platforms together are very successful and are recognized as the best. Regarding compatibility and interoperability, the name of the game Hcash (abbreviated for Hypercash) is recognized. Hcash is a Chinese/Australian cryptocurrency project aiming to provide a wide set of features that would create an increase in adoption.
Among Hcash’s features is the ability to support integration in such a way that positively influences block-based and blockless-based transactions and currencies. Bitcoin and Ethereum are currencies that use conventional blockchains while others like IOTA operate on a blockless paradigm. Obviously, there is room for various currencies to flourish but those with interoperability and compatibility stand to get a chance in being major players in their own right.

Linking tangle-based and blockchain-based systems is a big challenge. This is exactly the principal aim of the Hcash solution. The Hcash creates sidechains to both types of systems which allows he flow of both data and value from both, therefore, becoming an intermediary platform. The Hcash platform team has built several features into their solution that makes usability more fluid, safe, and secure. Among these is the unlimited nature of transactions which allows Hcash users to transfer unlimited times with a limited block size, no matter the speed of transfer or amount of transfer.

There is also a novel governance structure that incorporates and accommodates both Proof-of-work (PoW) and Proof-of-Stake (PoS) mechanisms which balance the needs of both miners and users. Hcash also supports privacy (with the use of Zero Knowledge Proof technology) which has been future-proofed against the rise of quantum computing with quantum resistant safeguards. These features all make up the technology that will help to bridge the gap between DAG and blockchain currencies at the same time allows for a direct user experience.

IOTA Blockchain to Help Trace Families of Refugees During and After Conflicts.

There is a formal partnership of IOTA with the largest missing person’s database, REFUNITE, to reunite lost families during and after conflicts. The deal is a non-profit one which will provide REFUNITE expertise with a Decentralized Ledger Technology (DLT) and making sure all hands are on deck for participation. There is a record of about 28,300 people forced to flee their homes on a daily basis due to global conflicts and oppression. There is an indication of an anomalous growth of 65.6 million people as figured by UNHCR that has been forced to flee their home.

On a recent briefing of the deal with Cointelegraph, David Sonstebo who is the co-founder of IOTA explained clearly that it is an impressive advancement on IOTA in which it represents the onset of a long and fruitful journey as a bid of exploring how Decentralized Ledger Technology (DLT) can help refugee camps and refugees. His words were:

“When dealing with the sheer size of refugee camps and refugees, you need a scalable solution. And IOTA is the only scalable distributed ledger with no fees at the moment. In addition to this, the IOTA foundation is currently engaged in utilizing technology for the improvement of the condition of refugees and people in impoverished nations. For example, we took part in “Hack4Farming” in Kenya last year to explore who to use distributed ledger for farming optimization.”

Currently, REFUNITE is operating across 25+ countries helping refugees who have become separated from the loved ones over many years to reunite. The co-founder of REFUNITE told Cointelegraph that families became separated in the wake of conflict often never to find each other again. About 700,000 refugees are currently helped in a bid to search for their families. The reason for the creation of REFUNITE in 2009 was as a result of help rendered to a young Afghan named Mansour who lost track of all his entire family during their escape from Taliban.

This invention will help to build a more inclusive and exciting future, and IOTA will enjoy the privilege of being the first public distributed ledger to ensure scaling and getting rid of fees. This makes it a great match for REFUNITE. This process is the only way to find an approach (a better one) in helping people and scaling at a diminishing cost.

Disclaimer: This article is based on previous writeups about the company and their product. This version does not claim rights to this story and is meant to serve as reference to the original.

bconomist

bconomist

Your strongest link in the (block)chain. Get the latest information and news about global crypto-finance, coin index, current market analysis, ICO reviews, and the latest trends in blockchain technology and fintech.

Bconomist News

Written by

bconomist

Your strongest link in the (block)chain. Get the latest information and news about global crypto-finance, coin index, current market analysis, ICO reviews, and the latest trends in blockchain technology and fintech.