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- 1 IOTA uses the Tangle, a blockchainless structure, to enable fast and private transactions.
- 2 IOTA was founded in 2015 and is run by the not-for-profit IOTA Foundation.
IOTA is a technology that lets us have our own private data, run programs that are tamper-proof, and trade and own assets without middlemen. It is a type of DLT, which means it keeps track of token ownership across multiple nodes. But not all nodes can be trusted, so IOTA needs a way to defend itself. IOTA is different from other protocols in how it does that.
IOTA uses the Tangle, a structure where new transactions confirm the old ones, while most other DLTs use a blockchain instead. A blockchain has to group transactions in blocks and link the blocks one by one. That creates a natural limit: imagine moving the world’s cargo in a single train car by car. IOTA avoids that completely.
IOTA is still being researched. It has two public networks: the IOTA mainnet is the stable network that handles IOTA tokens, and Shimmer is the testing network for the latest and best protocol updates. Changes are tested on Shimmer before they come to the mainnet. The next big update is Stardust. The future update that finishes the decentralization effort is called Coordicide.
IOTA started in 2015 with four co-founders: Sergey Ivancheglo, Serguei Popov, David Sønstebø, and Dominik Schiener. The IOTA Foundation now has team members from over 25 countries.
Sønstebø and Schiener are still co-chairmen of the board of directors, while Popov is a board member and the foundation’s research director. Ivancheglo left the project based in Berlin in June 2019, but still gives advice as an unofficial advisor. He said: “I don’t think the IOTA Foundation is the best place for me to achieve what we wanted to create in 2014 and 2015. I have always worked better in a more flexible environment. I am excited to keep working on both hardware and software development of IOTA on my own.”
What Makes IOTA Different
It doesn’t use a blockchain at all, which is quite unusual.
Tangle has another name: the Directed Acyclic Graph — and Sønstebø said in a blog post in 2015 that this technology tries to keep blockchain’s ability to do secure transactions. The only difference is that it doesn’t have blocks.
He also said: “IOTA is not a different coin (altcoin) from other cryptocurrencies like Bitcoin, it is an addition to the growing blockchain ecosystem. It works well with these other platforms to make harmony and mutual benefits. IOTA is made to offer one solution that no other crypto does: effective, secure, lightweight, real-time micro-transactions without fees.”
New transactions are confirmed by approving two previous transactions from another node — and this is a new approach because it means that the network’s size and speed will depend on how many people are using it.
And while some cryptocurrencies are run like a business, the IOTA Foundation says it is not for profit — and it only wants to make the network as successful as possible.
Lastly, IOTA has set itself apart from many other crypto rivals by working with the carmaker Volkswagen, and helping the city of Taipei to do smart projects.
With a background in journalism, Ritika Sharma has worked with many reputed media firms focusing on general news such as politics and crime. She joined The Coin Republic as a reporter for crypto, and found a great passion for cryptocurrency, Web3, NFTs and other digital assets. She spends a lot of time researching and delving deeper into these concepts around the clock, and is a strong advocate for women in STEM.
