IOTA: Everything you need to know

Cryptocurrencies like IOTA not only arose from the need to find an alternative economic system that would allow better control and equality of wealth. They are also the natural response to the constant evolution that we are subjected to after the arrival of technology in our lives.

IOTA emerges as a natural response to this process in which cryptocurrencies are becoming solutions and exchange platforms. As we will tell you later, IOTA has a clear objective, more than being a simple cryptocurrency, it will be a protagonist in the digitization of our world.

▶ What is IOTA?

IOTA

IOTA is the acronym for "Internet of things" which in Spanish means, internet of things. This term refers to the concept in which it is stated that the internet can be part of a large number of day-to-day processes in order to integrate technology and make it simpler.

Thus, IOTA was born as a cryptocurrency and digital platform which were designed to promote and support the new collaborative economies. Thus, it is possible to create bridges between users, computers and resources, which encourages the birth of these new forms of collaboration.

The idea is simple, allow people to take advantage of other people's unused resources, for example, power or capacity on your computer or servers, in exchange for some benefit. Simply put, IOTA wants to drive collaborative networking so that you both get a win, win.

Unlike other cryptocurrencies, IOTA works under a technology called Tangle, which is different from the traditional Blockchain. Tangle is a network made up of P2P protocols which is decentralized and also self-regulated, so it does not require blocks or mining or user verification.

▶ Differences between IOTA and Bitcoin

It is important to take into account that the comparison between cryptocurrencies is a good tool to know which option meets our needs and best technology. Here we will tell you what are the 5 main differences between IOTA and Bitcoin, the most used cryptocurrency in the world.

  • Commissions: One of the ways to generate income for developers and participants in the Blockchain process is by charging commissions. While Bitcoin, Ethereum and other cryptocurrencies charge commissions, in IOTA the commissions are practically zero, there is no charge for the use of this currency.
  • Does not use Blockchain: Perhaps one of the most surprising points is that IOTA does not operate through the famous blockchain or Blockchain that cryptocurrencies use. This means that the participation of the user is not necessary to validate the transactions and blocks. The Tangle system is used here, which is a decentralized P2P network.
  • Unlimited transactions: The main point against Bitcoin is that it has a limit on transactions due to the processing capacity of its block network. Instead, IOTA has the possibility of carrying out unlimited transactions thanks to the fact that each transaction makes the sender verify two more.
  • Faster transactions: Another advantage of using Tangle as a way to support transactions is that their speed becomes higher. The more transactions carried out, the greater the capacity and speed to manage them.
  • Without mining: It could be said that the birth of cryptocurrencies arose through a genesis block, that is, they were created at the beginning of this platform. That is why we can only find a limited number of IOTA coins, they can no longer be mined, it will not increase or decrease, the number will always be fixed.

▶ How does IOTA work?

The Blockchain system is well known, it is a chain of blocks which has information on each transaction. Once the transaction is confirmed and the algorithm scrambled, then the block is added to the chain.

Furthermore, IOTA's system is different, since it operates under Tangle technology which is a parallel transaction protocol which works through the DAG (Directed Acyclic Graph). Its main functions are that this system performs more transactions in less time and with better security.

Within this Tangle system we find an algorithm known as MCMC which is responsible for sampling invalid movements using the Tangle parameters. Thus, it is possible to distribute transactions and validations in a balanced way, which makes the operation more efficient.

Another point that you must take into account is the fact that IOTA is programmed in an improved basic binary language known as ternary. This system works better than the traditional binary system, as well as offers the possibility of adding better functions and more complete tools.

▶ Mining 

Mining in the case of IOTA does not apply, since by not having a Blockchain it is not necessary to have miners to validate transactions. This is a great advantage because here the user validates a transaction by making one more, which helps to generate a graph.

The genesis transaction, with which all the IOTAS were launched making it impossible to mine them in the future, is a neutral initial and automatic transaction. This did not need to be validated, as it could be considered as the mother of all transactions or the Big Bang transaction that started all the others.

IOTA

▶ How to get it?

There are two options to get IOTA coins. The first is to buy these virtual Tokens which you can do through pairs, for example, IOTA / US or ETH / IOTA. Of course, you should know that this is not a virtual currency that is so widely used so it is not available in all exchange houses.

The next option to have your own IOTA is found in investing with an online broker. Namely, You can buy MIOTA CFDs (IOTA cryptocurrency) which allows you to trade easily and have your money safe in the best brokers.


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About Pedro Martinez Gonzalez

I'll tell you a little about myself! I am a financial analyst and economist with a master's degree in finance.

About my studies: I studied at the University of Salamanca for a Degree in Economics and then did a Master's in Finance in Madrid.

Do you want more information? You can read more about me here in my biography.

2 comments on «IOTA: Everything you need to know»

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