There’s a new cryptocurrency on a block and it’s called IOTA. Technically it’s not a new cryptocurrency it’s been around for a while. recently it’s been listed on Bitfinex and it’s got a lot of attention – so it’s as good as new. It took seventh place in terms of market capitalization in terms of cryptocurrency
Third generation cryptocurrency:
- Fast Transactions
- Zero Fees
- Quantum Proof
How Iota achieves free transactions
Iota has an important technological change over classic cryptocurrencies like Bitcoin and Ethereum – and that’s the fact that it doesn’t use blockchain. Instead, Iota uses Tangle, a new way of achieving network consensus. To understand Tangle and the benefits of Tangle we need to understand how transactions are verified on the Bitcoin network. Bitcoin uses Blockchain technology to create a consensus ledger – that is a database of transactions that everyone on the network agrees upon. ledgers of transactions being formed and linked to each other. Instead of having a single chain of transactions, Tangle has a mesh of transactions and verifications. The beauty of tangle is that every time a transaction is sent you verify two other transactions behind you. Even Ripple has a transaction fee to prevent spam – it has a very low transaction fee but it’s still there.
Internet of things
Internet of Things is going to be huge – smart machines and smart living via an interconnected network of minicomputers. The interesting part of iota is that not only can humans use iota but machines can use iota too. This is because iota has completely free transfers fees and even small machines can use it. This allows a machine-to-machine economy to form. For example, a vacuum robot might be able to request a taxi service from a nearby drone and get transported to a different building. This creates a whole entire world of possibilities for the future of mankind – or even machine kind.
Quantum computers are coming this year and they can do one thing that traditional computers can’t – the can use Shor’s algorithm to break the cryptography used in Bitcoin and other classic cryptocurrencies. Whilst the current generation of quantum computers are powerful enough to run the calculation, future medium sized quantum computers potentially can. This means that Bitcoin might not be secure in the future as it might be possible to break into someone’s wallet. Iota is Quantum proof by design.