IOTA - the third generation of cryptocurrencies (Tangle technology)
It all started in 2009 when Bitcoin first appeared on the market - a digital currency created and stored electronically, not controlled by anyone, and produced by people using computers all over the world, with the help of software that solves mathematical problems.
Bitcoin represents the first generation of cryptocurrencies, and today, only 9 years later we are talking about the third generation of cryptocurrencies.
Currently, the best example of third-generation is IOTA. This is the digital currency, which just like Bitcoin is decentralized, and its value is determined solely by its use in the market.
IOTA is a cryptocurrency that has three main characteristics:
- There are no transaction costs - if you want to pay something or you want to transfer funds from wallet to wallet there are no additional charges or fees (like in a bank).
- All payments are instant - when you transfer funds - the amount you enter will automatically appear in the recipient's wallet.
*Note - the transfer of funds currently takes about 15 minutes as there is still not a sufficient number of users. When IOTA reaches a sufficient number of users. the transactions will be instant.
- The network speed increases with the number of users – unlike any other example when the number of users increases and the speed decreases drastically.
IOTA is not based on blockchain technology. It uses a new technology called Tangle. Many renowned companies like BOSCH, Volkswagen and others believe in this technology and they continue to invest in it.
The best way to explain Tangle technology is using the tree analogy. Basically Tangle is a tree with multiple branches. Every single branch eventually grows and can never go return to the size it once had.
With Tangle technology each transaction authorizes an additional two. This is why there is no need for commission for miners, like with other blockchain networks (where miners approve transactions for a fee).
In order to fully understand Tangle technology it is necessary to understand the concept called Internet of Things (IOT), and what is its potential.
Internet of Things refers to a network of physical objects connected to the Internet, which collect and exchange data using built-in sensors.
Smart machines (computers, microchips, kitchen appliances, hospital appliances,...) in that way enable smart living through interconnected minicomputers.
For example, your solar panel can contact your neighbor's bulbs to “sell” its own energy (in an IOTA cryptocurrency), completely independently, and this creates a world of possibilities for the future of humanity – and even the machines.
Every day our applications and machines become increasingly smart, allowing us an easier life, performing everyday activities, and responding to our needs. Experts predict that by 2020, IOT will contain more than 30 billion objects and the global market will be worth USD 7.1 trillion.
The difference between IOTA and MIOTA
IOTA is the name of cryptocurrency, while MIOTA is a measuring unit (the price is expressed in MIOTA). The smallest unit of the IOTA cryptocurrency is iota (denoted by a lowercase letter i).
When you see the price of the cryptocurrency IOTA, the price of 1 MIOTA is displayed, which is the equivalent of 1,000,000 iota.
You can find the the current price of IOTA here.