The Beginner’s Guide to IOTA

The Beginner’s Guide to IOTA

IOTA is a distributed-ledger protocol powered by the Tangle, a DAG-based data structure. With its feeless transactions and tremendous scalability IOTA seeks to be useful in the age of the Internet of Things

What is IOTA?

IOTA is a public and permissionless protocol that aims to be the backbone of the emerging machine-to-machine economy and enables seamless interoperability of devices in the age of the Internet of Things. It can also be used by people as a conventional cryptocurrency. IOTA is powered by the Tangle technology.

The Tangle

Instead of a blockchain, IOTA uses the Tangle, a special architecture based on a Directed Acyclic Graph (DAG). This may sound rather complex but in reality a DAG is simply a way of representing data, much like blockchain. However, whereas a blockchain is a chain of blocks each referencing (validating) the one before it, the Tangle is a web where each transaction references two earlier transactions.

Low load (top) and high load (bottom) Tangle

There is no mining in IOTA as each participant in the network has to validate two past transactions to send a new one. It follows that the more the network grows, the more scalable it becomes.

Transactions

Making a transaction includes four steps:

  • Signing: a node creates a transaction and signs it with the private key.
  • Tip selection: the node randomly selects two tips (unconfirmed transactions, grey squares in the picture above) using the Random Walk Monte Carlo algorithm.
  • Proof-of-Work: the node checks if the two transactions are valid and then attaches a small proof-of-work. This process is necessary to prevent spam attacks.
  • Broadcast: the node broadcasts the transaction to neighboring nodes and it is further propagated through the network using a standard P2P gossip protocol.

The transaction is considered 100% confirmed when 100 randomly selected tips all have a path to the transaction (confidence) or when a milestone references the transaction. Milestones are empty transactions issued every two minutes by the coordinator, an entity controlled by the IOTA Foundation. The coordinator is a temporary solution used to protect the network from attacks in its infancy stage.

A transaction has four properties:

  • Height: the length of the longest path from the transaction to the genesis;
  • Depth: the length of the longest path from a tip to the transaction;
  • Weight: the amount of proof-of-work done by the author node (usually 1);
  • Cumulative weight: the sum of its own weight and the weights of transactions that directly or indirectly validate it.

MIOTA

The smallest unit of IOTA the cryptocurrency is Iota but most operations are done in mega Iotas (MIOTA, or Mi). One mega Iota equals one million Iotas. The total supply of 2,779,530,283,277,761 Iotas has already been distributed and no more coins can be mined. The number of tokens is not arbitrary. IOTA uses ternary-based logic (as opposed to binary) and this is the largest 33-digit ternary number.

111,111,111,111,111,111,111,111,111,111,111 (base-3) = 2,779,530,283,277,761 (base-10)

There are no transaction fees in IOTA which makes the cryptocurrency a good choice for micro- and nanopayments. The same feature coupled with IOTA’s infinite scaling potential allows a great multitude of interconnected devices to constantly exchange information in the Internet of Things economy.

IOTA Foundation

IOTA was created by David Sønstebø, Dominik Schiener, Sergey Ivancheglo, and Serguei Popov.

The IOTA Foundation is a non-profit organization behind the IOTA technologies. The Foundation houses researchers, industry experts, developers and engineers who work on the development and adoption of the IOTA protocol.

The IOTA Foundation is headquartered in Berlin, Germany.

Additional Info

  • IOTA raised 1337 BTC (approx. $0.5 million) in ICO in December 2015.
  • The IOTA network becomes stronger when the number of transactions increases. A stress test conducted in April 2017 showed a throughput of 112 confirmed transactions per second in a network of only 250 nodes.
  • IOTA uses Winternitz signatures which make the Tangle impossible to compromise even by a quantum computer, anticipated to arrive within the next two or three decades.
  • To keep the ledger at a reasonable size, the IOTA Foundation creates a Snapshot every two months. A Snapshot is a pruned version of the ledger, it removes all events and addresses which do not have a positive balance. Full nodes can keep the unpruned version if they choose so.
  • IOTA used its own ternary based hash function called Curl, which was found to have critical vulnerabilities by MIT. Curl produced the same output to different inputs. IOTA later replaced it with Kerl.

Links

Official website

Official blog

Whitepaper

Roadmap

Documentation

FAQ

Github

Twitter

Wallets

Trinity wallet

Full node + light node

Latest IRI

Community

Subreddit

Stack exchange

Discord

Help

Illustrated introduction

Education Youtube channel

IOTA Simply Explained

Reddit IOTA FAQ

All-in-one IOTA thread

Tangle visualizer

Another visualizer

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IOTA Foundation Partners With UK Based NOVA to Support DLT Startups

Earlier this week the IOTA Foundation announced its most recent partnership with Liverpool-based cofoundery, Nova. The partnership will work towards increasing the number of startups that successfully utilize the next generation of Distributed Ledger Technology. Support and Guidance For Startups Using the IOTA Tangle Startups can apply for the program via the Nova Website. Once accepted, successful teams will have access to funding and mentorship geared towards developing innovative new business models using IOTA technology. With the support of both organizations, startups will have a foundation to realize their visions of implementing Distributed Ledger Technology to solve real life problems. Entrepreneurs will also have access to IOTA’s test lab to build and test their solutions on the Tangle. David Sønstebø, co-founder and co-chair at IOTA, explained how the partnership will help transform ideas into sustainable business models. The Tangle network overcomes many of the limitations and inefficiencies of blockchain technology, and as such, has huge potential to transform machine to machine transactions that are at the core of IoT. Our partnership with Nova is about enabling that innovation, by helping initial ideas come to fruition in the form of viable, scalable and sustainable business models. The Head of Partnership at Nova, Andrew Dean explained that many startups fail due to common mistakes made in the initial stages of formation. With statistics placing a 90% failure rate for startups the partnership with IOTA aims at giving brilliant business ideas a chance to become successful while utilizing the IOTA Tangle. About Nova Launched in 2014, Nova is a Liverpool-based cofoundery that partners with entrepreneurs to turn brilliant ideas into successful, scalable tech startups. Some of the industries Nova has successful guided startups include healthcare, fintech and eGaming. Nova has a team of over 20 startup mentors available to guide entrepreneurs. The firm also has over 200 designers, software engineers and marketers spread out across the globe. What are your thoughts on the IOTA Foundation partnering with Nova to guide startups through the process of creating a successful business that utilizes Distributed Ledger Technology? Is this a step in the right direction considering the failure rate of new blockchain companies? Please let us know in the comment section below.  Disclaimer: This article is not meant to give financial advice. Any additional opinion herein is purely the author’s and does not represent the opinion of Ethereum World News or any of its other writers. Please carry out your own research before investing in any of the numerous cryptocurrencies available. Thank you. The post IOTA Foundation Partners With UK Based NOVA to Support DLT Startups appeared first on Ethereum World News.
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What Is Nano? | A Guide to the Instant, Zero-Fee Cryptocurrency

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In this guide we’ll go over: How Nano Works The Perks of a Block-Lattice Infrastructure Trading History Where to Buy Nano Where to Store Nano Nano Past, Present, and Future Final Thoughts Additional Resources How Nano Works Block-Lattice Structure Like IOTA, Nano uses a directed acyclic graph (DAG) algorithm, but instead of using DAG for the tangle, the project employs its own novel tech called the block-lattice. The block-lattice infrastructure operates like a blockchain but with a few key differences. To start, each account on Nano’s protocol has its own blockchain, called an account-chain. Only an account-chain’s user can modify his/her individual chain, and this allows each account-chain to be updated asynchronously of the rest of the block-lattice network. In effect, this means that you can send and update blocks on your account-chain without relying on the whole network. 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Additional Resources Website Twitter Discord Github Reddit Medium The post What Is Nano? | A Guide to the Instant, Zero-Fee Cryptocurrency appeared first on CoinCentral.
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