IOTA is a cryptocurrency related to the Internet of Things, represented by the acronym IoT. IoT refers to how anything can be connected to the Internet. It is estimated that by 2020 billions of objects will be linked to the network.
The founders of IOTA are David Sønstebø, Sergey Ivancheglo, Sergei Popov and Dominik Schiener. All of them have been in the Blockchain space from 2010 to 2011. IOTA emerged from a real need; it was not the impulse to create a new DAG technology that initiated the project, but rather the apparent problem of transactional arrangement for IoT, and the lack of existing solutions to date.
Afterwards, the IOTA Token began to be negotiated, a cryptocurrency 100% focused on the Internet of Things (IoT). At the moment, IOTA is among the top 10 cryptocurrencies in market capitalisation. Do not forget to know about How to Make Money Trading!
How does IOTA work?In general, IOTA works as follows: Transactions are issued by nodes and constitute the place of Tangle technology (i.e., the Tangle graph is the ledger for storing transactions). The Tangle continues to have the same underlying principles as Blockchain: it remains a distributed database, is still a P2P network and is still based on a consensus and validation mechanism. Its set of “edge” is obtained as follows: in IOTA there are no “blocks” in the classical sense. Instead, a single transaction refers to two past sales. This transaction reference is considered as a certification: with its transaction, it is directly attested that two transactions, and indirectly than a subsection of the Tangle, are valid and conform to the rules defined in the protocols.
There is also the “genesis” transaction, directly or indirectly approved for all other transactions. The genesis is described as follows: At first, there was an equilibrium direction that contained all the chips. Then, the tokens are sent to several other “founding” directions. All the chips were created in the genesis (no more tokens will be created), and there is no mining in the sense that “miners receive monetary rewards.” On the other hand, it is the whole network of active participants (i.e., devices that perform transactions) that are involved in the approval of operations. As such, the IOTA consensus is no longer decoupled from the operation taking process: it is an intrinsic part of it, and it is what allows IOTA to scale without any transaction fee.Users must work to approve other transactions, thus contributing to network security. For the deal to be valid, the node must solve a cryptographic puzzle similar to that of Bitcoin’s mining.
The buy-sale process in IOTA is a simple 3 step process:
Signature: Signing the transaction entries with your private keys
Tip selection: MCMC (Monte Carlo Markov chain) is used to randomly select two points (i.e., Unconfirmed Transactions), which will be referred to by your transaction (branchTransaction and trunkTransaction)
Proof of work: For your transaction to be accepted by the network, you need to do a work test similar to Hashcash (spam and sybil-resistance)
Once you have done that, your transaction will be transmitted to the network. Someone else will come, choose your trade in the tip selection process and validate it. And so, your purchase will be confirmed. You can make money trading by investing in the cryptocurrencies. People nowadays are using bitcoins and other forms of cryptocurrencies for carrying business online.