Cryptocurrency investors looking for opportunities besides the top names of Bitcoin and Ethereum, can find ripe investment potential in altcoins. One showing clear potential, IOTA, traded as MIOTA, offers a platform with an unique twist on the blockchain – the Tangle – and a token with rising value. It recently gained strength due to a December announcement of partnership with a number of major corporations, including Microsoft. This article provides a fundamental analysis potential investors can use as a starting pointing to guide their research and decision-making. This analysis includes the following six elements:
- an overview of IOTA,
- the problem it tries to solve that requires blockchain technology,
- IOTA products,
- its scalability,
- the IOTA community,
- IOTA founders and board of directors.
IOTA Overview/Description of IOTA
The Internet of Things Application, or IOTA, ranks ninth on the global cryptocurrency value list, according to Global Coin Report. Currently, IOTA has a market cap of $11 billion dollars with 2.7 billion MIOTA coins circulating. MIOTA’s value grew more than 500 percent from August 2017 to January 2018.
You may guess by its full name, IOTA supports the Internet of Things (IOT), which collects and transmits information from electronic devices as diverse as airplane parts to refrigerators. IOTA provides business and financial support to the IOT’s Economy of Things. As an IBM Institute for Business Value report explains, while IOT digitizes the physical world, its partner the Economy of Things enables “liquification of the physical world.”
IOTA offers an unique set of features. While it remains decentralized, it enables IOT interoperability. While it protects privacy, it enables resource sharing. While it offers its own highly ranked token, MIOTA, it devised a fee-less transaction method for it. While most crypto platforms and currencies try to be all things to all people, IOTA targeted the business-to-business crowd. IOTA devised a way to turn each available technology into a tradable service on its real-time, open market. Just think of it as the “ledger of things.”
What problem does IOTA try to solve?
Think of blockchain technology, cryptocurrencies and cryptoplatforms in terms of application versions. That makes Bitcoin the first Blockchain version. By adding a development platform and messaging, Ethereum became the second version. IOTA’s introductions to the technology make it Blockchain 3.0, explains The Bitcoin News. Its additions take the technology in a new direction, literally.
IOTA introduced the Tangle. Blockchain technology can only write one transaction at a time and only in one direction, an historical path. Each block added continues in a line traveling in the same direction. One block writes, then another, one after the other forming a chain. While separate blocks written once provide a good, secure informational environment, it produces a slow business or financial transaction environment, limiting scale. IOTA introduced Tangle technology which enables writing multiple blocks simultaneously in multiple directions. (Since two or more can write at once, they could be side-by-side instead of following one another, for example.) Think of it as blocktangle technology.
That means that using the Tangle ledger allows simultaneous, multiple IOT transactions. Why would you want that, you ask? Because the IOT is already everywhere. You probably used something connected to the IOT today without realizing it. If you passed by an automated coupon dispenser in a grocery or drug store, flew on a plane, or used a smart TV or refrigerator, you used the IOT. Each device transmitted data using tiny sensors or chips. As the IOT grows and develops, it needs to enable people and businesses to interact and trade with it. The IOTA platform enables those transactions and purchases via its Tangle ledger and cryptocurrency MIOTA.
Another innovation of IOTA, its zero fee transactions, allows trade in a true peer-to-peer environment. Imagine an economy with no ATM, banking or trading fees. Its like a return to barter and trade, but better. On the Tangle, all transactions remain secure, verified and exact. They’re exact because as fee-less transactions, you can share the precise resource amount.
IOTA Board of Directors and Founders
IOTA has no Board of Directors. It has an egalitarian Foundation with members admitted by experience in a necessary field or industry and an express interest in Blockchain technologies, especially the goals of IOTA.
Its founder, David Sønstebo, remains a mystery. No one in its founding members – Sønstebo, Ivancheglo, Dominik Schiener, Serguei Popov – has a LinkedIn, nor links to other social media that shows up in Bing or Google results. Its developers do have experience. The IOTA Foundation attracted Dr. John D. Halamka, the International Healthcare Innovation Professor at Harvard Medical School and CIO of the Beth Israel Deaconess System. His interest in IOTA extends to its ability to interface with and update electronic health records.
The other members include: Jesse Babbra, Nick Beglinger, Oliver T. Bussmann, Wilfried Pimenta de Miranda, Vassil Dimitrov, John Edge, Lewis Freiberg, Cyril Grunspan, Regine Haschka Helmer, Bartosz Kuśmierz, Anders H. Lier, Per Lind, John E. Mattison, Julie Maupin, Dr. Navin Ramachandran, Samuel Reid, Alexander Renz, Jochen Renz, Carsten StöcRen, Joachim Taiber, and Danny Wu. Its development team consists of:
- Chris Dukakis, software engineer,
- Alon Elmaliah, core developer,
- Sabri Goldberg, designer,
- Paul Handy, core developer,
- Alfred Keller, core developer,
- Andreas C. Osowski, developer.
Its products already prove extremely popular with big business. IOTA has proof of concept projects with more than 30 corporations including Accenture PLC, Bosch, Cisco Systems, Fujitsu, Microsoft and Samsung. The corporations take part in a data exchange. In this information marketplace, they exchange data collected by IOT sensors for MIOTA tokens. This includes items like air quality or weather data, but not user’s private data which is protected by the privacy agreement of the IOT device from which it transmitted.
IOTA’s products, The Tangle and MIOTA, coupled with its fee-less environment enable businesses to engage in micro- and nano-transactions in a decentralized, distributed digital ledger. Rather than relying on the computational mining like Bitcoin, to transact with MIOTA a user must mine, or verify, two other transactions when submitting one. This builds automatic scale into its architecture by making faster transactions as transaction numbes rise.
Its ingenious method of causing scale to increase verification speed ensures growth. Ironically, its early growth period provides the problem, as Steemit.com reports. When the network isn’t jam-packed with transactions, it slows down. In our instant coffee, soundbite world, the 12 hours it took a Steemit journalist to have their transaction verified must have seemed excruciating.
It offers another benefit to contribute toward its scalability, offline transactions handled by sub-tangles which can connect with the main tangle when re-connected. While traditional blockchain technology can drain energy, this allows businesses in areas with limited electricity or Internet connection, like Pitcairn Island, to leverage the technology without down time. Areas with frequent brownouts or blackouts, like California, need not experience business downtime. While Ethereum continues to green its processes, IOTA devised a way to continue business while offline, enabling its ledger to write to sub-tangles offline, then quickly process when connectivity become available. It provides a built-in business continuity solution.
IOTA has a mix of crypto fans, businesses on board and a hefty dose of media buzz. If the announcement of its Data Marketplace players including Microsoft wasn’t enough, it also landed a major venture capitalist in December. Robert Bosch Venture Capital provided them with an early Christmas present by investing in IOTA. Bosch’s firm described the investment as a “substantial amount” of MIOTA.
Its Foundation members actively participate in Internet of Things, Blockchain and distributed ledger conferences and hackathons. They actively work to build the brand and attract new businesses. The founder, Sønstebo, blogs regularly on the IOTA blog.
The technology has more steps to develop, like a smart contracts implementation and a more user friendly wallet. It has the interest of major corporations, a well known venture capitalist and the media. Its Foundation leadership may seem quirky, but their advisor has relevant credentials and experience in healthcare-related blockchain technology. As an investment, it hit its high in December. It continues to hold a place in the top ten cryptocurrencies entering at nine and rising to four at one point.