The advent of the blockchain has given us hope that it could solve a lot of the world's problems as far as information can go. From finance to international trade, from social networking to games, people have touted how blockchains could mark a natural evolution in how data can flow within a decentralized, transparent, secure, accessible, and fair ecosystem. But as we'll try to learn in our IOTA review, are blockchains really the only solution for change?
IOTA is a distributed ledger and one that has – theoretically – been designed to solve some of the key limitations around traditional blockchains. More specifically, its mission is to disrupt the burgeoning internet-of-things (IoT) market, as its name might suggest. Around the world, there are billions of different IoT-enabled and connected devices, from your home appliances like smart TVs and microwaves all the way to complex industrial machinery and entire fleets of vehicles.
Now, IOTA wants to bring blockchain-esque smarts into all those IoT devices by creating a new environment in which those countess little sensors and computers can exchange an infinite stream of data around the world safely, quickly, and seamlessly with one another while unlocking new ways in which IoT-powered devices can be used. But is IOTA's non-blockchain really up to the task? Well, read along our IOTA review to learn if they can go where blockchains could not…
What Is IOTA?
IOTA is a distributed ledger platform whose main goal is to provide an underlying digital infrastructure where billions of connected devices in the internet-of-things (IoT) ecosystem can seamlessly exchange data with one another on its ledger. The ultimate vision of IOTA is to create a new ‘machine economy' by essentially interconnecting the wider network of IoT-powered systems across major industries such as transportation, global trade, manufacturing, and more.
However, this extends beyond the traditional “industrial” use case, which goes towards the current evolution of smart cities, intelligent supply chain management, or autonomous transportation models with IoT sensors that could relay information to each other on IOTA. These are areas that current blockchains cannot handle due to their immense scale, but one which IOTA hopes to solve with its own tamper-proof, fee-less, and permission-less global distributed ledger.
What Are IOTA's Unique Features And Technologies?
IOTA is built on a highly unorthodox open-source distributed ledger instead of the tried-and-tested blockchain design. They claim this is necessary to facilitate the scalability, robustness, versatility (in regards to IoT), and ease of deployment that today's blockchains might lack. That then leads on our IOTA review to “Tangle,” which is the name for IOTA's transaction settlement and data integrity layer. This is the core of what power IOTA's distributed ledger.
The Tangle presents a new way of organizing data and executing transactions. IOTA claims that it's faster and more efficient than a traditional blockchain while also solving limiting factors such as block sizing, mining power fluctuations, centralized mining power, or hard forks. This is what makes IOTA's Tangle very suitable for large enterprise and institutional or mission-critical applications. More importantly, Tangle allows IOTA's ecosystem to scale more than blockchains.
As of this IOTA review, IOTA can manage around 1,000 transactions per second (TPS). Already far ahead of some blockchains, future updates could optimize it further to bring IOTA's computational speeds upwards of 1,000,000 TPS. As for how it's been designed, Tangle is a system of nodes connected together. Here, a new transaction on IOTA's Tangle-powered distributed ledger would confirm two previous transactions. As such, this means that there's no mining on IOTA.
With Tangle, all IOTA network users are responsible for data validation. IOTA's distributed ledger is a non-sequential Directed Acyclic Graph (DAG), which allows for transactions to run in parallel by connecting the nodes in a set pattern. This means that the more systems are connected to the IOTA network, the more secure and efficient it becomes. Since it doesn't require mining, the low memory and energy usage makes IOTA perfect for use in low-powered devices like sensors.
What Else Does IOTA's Tangle-Powered Distributed Ledger Offer?
To make things operate more smoothly on IOTA's network, their distributed ledger also has a tip selection algorithm. This works by measuring how many times a transaction has occurred in the past by a certain node and see how far it moves through the Tangle. With this approach, IOTA's tip selection system makes it so that approving transactions is done faster and easier for trusted nodes. IOTA also offers other key technologies alongside Tangle too.
IOTA Access is an open-source framework used to build access control systems for connected tools or devices. With this, it makes it so that IoT smart devices can be accessed through IOTA over-the-air or even monetized. Imagine being able to access a factory's IOTA-powered mainframe and be able to quickly use their idling machines through a cost-effective subscription or a pay-per-use model. IOTA Access is designed to be lightweight and highly flexible for any number of devices.
Next, we have IOTA Streams, which is an organizational tool for structuring secure data through IOTA's distributed ledger. Powered by the Tangle, Streams organizes data by ordering it in an interoperable and uniform structure. It can be used, for example, for connecting an IoT central server to collect data from a car. Safely and anonymously, the car manufacturer can learn more about how the car is being used and offer services in return or how to make improvements.
How Could IOTA's Solutions Be Deployed In The Real World?
We've learned so far in our IOTA review then that there's a lot of potential for how IOTA's robust and speedy distributed ledger could upend the IoT sector. Currently, makers of IoT devices such as sensors or entire computers can't very easily interoperate with ones made by others. IOTA has instead created a foundation with which all that data could “talk” and interoperate with each other and thus open up the potential for more value instead of a siloed approach.
For our IOTA review, we've taken a look at some of the industries in which IOTA has targeted to bring their distributed ledger and innovative technologies and how IOTA could be used…
Automotive And Transportation
Using Tangle, IOTA can create a “digital twin,” which is essentially a digital copy of a real-world asset to transparently track its lifecycle and usage in real-time. Within the automotive sector – and combined with the aforementioned IOTA Streams – carmakers could make the ownership experience of their cars much more equitable and enjoyable for the end customer. For instance, the manufacturers could understand more about how the car is being driven.
This way, they can tailor services such as better understanding if there are faults within your car through its IOTA-powered digital twin and better predict service intervals. New software updates could be sped up, while owners too could benefit by tapping their car's data to better save on usage-based insurance with fairer rates. Alternatively, cars could be monetized, such as owners being able to access the sensors to adopt pay-per-use shared mobility.
With electric vehicles, owners could earn money by participating in peer-to-peer energy trading or connecting their cars to provide power to energy grids. Within the wider transportation system, data gathered through IOTA can be analyzed to improve traffic. Alternatively, IOTA's native MIOTA cryptocurrencies themselves could play a huge role. Partnered with Jaguar Land Rover, owners can receive payments in MIOTA for selling data or use tokens to pay for tolls and parking booths.
Global Trade And Supply Chains
IOTA's tamper-proof and immutable distributed ledger could push IoT further forwards in accelerating and improving the efficiency of global trade networks and supply chains. Currently, trade – as we've seen in the border crossing between Europe and the UK – is still bottlenecked by lengthy (and also costly) paperwork just to verify data such as cargo. Instead, this complexity could be avoided altogether with IoT sensors to track the cargo from A to B, secured through IOTA.
Another extension of the digital twin concept from earlier in our IOTA review, global trade could benefit by creating virtual copies of every single item that is being shipped. This could better connect producers, suppliers, and consumers to increase collaboration and data sharing. More importantly, working in tandem between IoT-connected sensors or trackers through IOTA's ledger, goods can be traced within an entire supply chain, such as food items or agricultural produce.
Customs And Border Management
One benefit, as we looked at earlier, this connectivity and efficient data gathering could monumentally free up trade, especially between borders. IOTA is already working in East Africa to connect border agencies with foreign customs and traders. The end goal here is to smoothen out the flow of trade between countries. For example, trade inspections and compliance measures can be coordinated more quickly, and you could make do without having to manually do paperwork.
The 4th Industrial Revolution (or Industry 4.0) will mark the beginning of more digitalization of industrial complexes. This not only includes complex automation and the creation of perhaps completely autonomous factories, but it also requires new ways to share data and interface with machines. IOTA's distributed ledger solves this, as well as opening up monetization models for those businesses, such as being able to rent idling machinery and tools through microtransactions.
This interconnectivity between factories using IOTA's technologies could pave the way for more efficiencies in businesses that actively engage within the industrial or smart manufacturing sectors. For example, a manufacturing company using IOTA-powered IoT smart sensors could detect that it's running low on material and could then automate a request to a nearby mill to then purchase a specific grade of metal.
One way that IOTA wants to make this easier is through the namesake Industry Marketplace, which is an IOTA-built decentralized marketplace as a central hub where vendors could buy or sell automation tools for physical or digital goods and services. Here, everything is standardized, such as contracts for automating tools or machines, individual product data, orders and bids, purchasing info, and a standard method for easy payments.
According to IOTA's research, 66% of the world's population will live in cities by the year 2050, with 1.3-million people moving to cities every day, which will double by 2060. Using IOTA's distributed ledger, the idea of smart cities could get even smarter by connecting the thousands or millions of different internet-connected sensors and devices to better inform a ‘smart' city's infrastructure.
Through data shared across countless residents, visitors, businesses, service, along with the local government, IOTA's ledger could help sensors gather information which could better serve its inhabitants, such as reducing waste or making energy consumption more efficient. Alternatively, it could work to better manage traffic flows or the timing and availability of public transportation using data gathered from vehicles, for example.
Another use case for IOTA's distributed ledger is having cryptographically secure patient data within the world's healthcare systems. This is to ensure maximal protection against identity theft, fraud, data tampering, or private information getting leaked. For instance, IOTA could use its tech to securely and remotely monitor patients and keep logs of their personal health, and then transferring that data securely onto more conventional healthcare records.
IOTA's network could thus be expanded beyond individual patients and safeguard confidential information such as medical treatments and data concerning clinical research to be safely coordinated across the entire healthcare network. An extension of our previous point made in this IOTA review, IOTA's distributed ledger could also be used to keep a check on pharmaceutical supplies or trace the supply chain and deployment of vaccines in real-time, for instance.
What Are IOTA's MIOTA Cryptocurrencies?
The native cryptocurrency of the IOTA network is MIOTA tokens. Since IOTA's distributed ledger doesn't charge any transaction or network fees, MIOTA tokens are mostly used as a currency for network users to interact with. As we noted earlier in our IOTA review, IoT-connected devices can be monetized with microtransactions, such as lending your car out for ride-sharing or if factories want to rent out unused machinery. This, in turn, allows users the option to earn MIOTA tokens.
Alternatively, network users can also use MIOTA tokens to buy goods or services across the IOTA network. One example would be a factory buying automation services through the Industry Marketplace. Another marketplace built by IOTA is the Data Marketplace. As a secondary option, it allows for various streams of data to be collected anonymously – if the users choose to – which can then be sold. One example would be selling weather data collected from an outdoor sensor.
Thanks to this immense utility, MIOTA tokens have seen a fair amount of appreciation since late-2020. As of this IOTA review, one MIOTA cryptocurrency is priced at $1.91. Every single MIOTA token has been pre-mined, so its entire supply of 2,779,530,283 MIOTA is in circulation. This gives it a market capitalization value of $5,304,275,614, which makes IOTA's native MIOTA cryptocurrency the 25th-most valuable token on the market.
What Are IOTA's Future Roadmap Updates?
IOTA is working very actively with over 100 different major companies institutions to help evolve and adopt IOTA's distributed ledger beyond just a proof-of-concept phase. IOTA also has several other initiatives, such as the Tangle EE, which is a working group where IOTA's developers can brainstorm new ideas with the industry, or the IOTA Ecosystem Development Fund, where $39-million in grants is made available to support emerging technologies and projects.
They have a firm roadmap for 2021 and beyond. While writing this IOTA review, their first network upgrade would be codename ‘Chrysalis,' or IOTA 1.5. This is where small optimizations would continue to be made – which some have already been completed – as well as seeing IOTA work on improving their smart contracts functionality. One key criticism of IOTA is that it's currently a centralized network, with its whole ledger being moved to a central “Coordinator” node.
Although intended to increase security, a centralized network as such would give IOTA's entire system just a single point of failure while also slowing down processing speeds as it could not compute transactions in parallel. This is where the ‘Coordicide' update will come in, or IOTA 2.0, which will remove the Coordinator node altogether and turn IOTA into a fully decentralized distributed ledger. This now decentralized network will ensure better security, robust operations, as well as maintain IOTA's top-notch scalability.
IOTA Review – Conclusion
In concluding our IOTA review, we decided to find out how much of an impact IOTA and its distributed ledger could make if it grew its market share and adoption within the IoT space around the world. According to data gathered by Statista, there were 8.74-billion unique IoT-connected devices globally, which is expected to grow to a whopping 25.44-billion by 2030 in following this growth rate. That there is enough for us to understand how much potential there is for IOTA.
Even if IOTA could gather and stream data from just a tiny fraction of that, it alone could make for a huge difference. Between small households, large industrial complexes, and an entire city's worth of infrastructure, our daily lives are becoming more and more dependent on the internet, even if we don't realize it. It can play a huge part in transforming our world for the new age and could certainly be made better thanks to IOTA in making sure that even the tiniest bytes of data can be kept safe.
See Also: Best IOTA Wallet
Ease of Use
- Can run on very low-power and low-processing devices such as sensors or onboard computers.
- Permission-less and fee-less, which helps to encourage more adoption, as well as encourage new forms of monetization such as microtransaction.
- Is widely compatible and can be integrated readily within the billions of IoT devices already in use.
- Backing and support from many major companies, academic institutions, as well as government and non-governmental organizations.
- The design of its Tangle distributed ledger remains very unusual and is untested compared to more ordinary blockchains.