What is IOTA?
IOTA is a distributed ledger designed for the Internet of Things (IoT). A distributed ledger is a shared database by various institutions and organizations. The native cryptocurrency of the platform is mIOTA. What sets IOTA apart is its innovative Tangle technology. Almost all major cryptocurrencies employ the block chain technology. The purpose of IOTA is to connect devices in the Internet of Things and become the mode of transactions.
The Tangle distributed ledger uses directed acyclic graphs (DAGs). Unlike the block chain technology, Tangle does not require any nodes or miners which also, effectively, eliminates transaction fees. The cost of a transaction processing is processing two other transactions on the network – which creates a web, hence the name.
The Tangle technology of the network has been regarded as the future of cryptocurrencies because it solves many major problems facing cryptocurrencies. Tangle ensures that the system stays truly decentralized and no single group is able to get dominance which is possible in the Proof of Work (PoW) block chain technology – albeit not easily. Moreover, Tangle also ensures that IOTA will not face any scalability issue and the transaction processing speed is high.
Since the all-time high of $5 established in the bull-run of 2017, IOTA has been giving subpar performance. However, some major developments have brought the cryptocurrency to the limelight. With the unique value proposition of the network and its innovative technology, analysts predict a price explosion of IOTA is only a matter of time.
The cryptocurrency had been operating below $0.4 but as the bulls picked up during the new year, IOTA’s price surged. The coin went as high as $1.5 and had stabilized above the $1 mark. At the time of writing, IOTA stands at a price level of $1.3.
The leading cryptocurrency exchange, Bitfinex, has added IOTA as a collateral on its loaning platform, Bitfinex Borrow. The decision was taken after a poll on Twitter was organized by Bitfinex. IOTA will now be added to the list of other major cryptocurrencies like Bitcoin and Ethereum that are offered are collateral.
IOTA in decentralized finance
The development team is underway brining the cryptocurrency to the world of decentralized finance. IOTA will bring feeless smart contracts to the platform which will allow decentralized app developers to charge their own fees to users. The Tangle technology will boost the efficiency and flexibility of smart contracts on the IOTA platform.
Historically, IOTA has been supported by multiple client libraries like C, Python etc. The problem originated when the diversity led to the availability of certain features in a particular library. Users were also required to have ample knowledge about the IOTA to be able to use the libraries. To tackle this issue, the developers have created new libraries that are better, faster and stronger with the programming language Rust as the reference.