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IOTA is one of the most popular cryptocurrencies on the market. Its versatile application and revolutionary model of the graph make it remain at the forefront of cryptocurrencies by. rankings.

IOTA created the succession of the traditional blockchain

Blockchain 1 and 2 generation.


A standard chain of cryptocurrency blocks such as Bitcoin (BTC), Ethereum (ETH) or Dash(DASH) has a chain-like structure, meaning that each block is a "child" of the preceding block.

This simple rule says that each block in the chain is verifiable and once verified and confirmed it remains forever in the transaction history. The simple rule required assuming a simple solution which was assigning many transactions to one block. Solving blocks and calculating them hashes and thus the confirmation of the transactions in them are now dealt with by specially specialized computing units called colloquially excavators.

Because extracting cryptocurrencies are commonly called "miners"Because"copy" in this way kryptowaluty.

In the case of the first cryptocurrencies (BTC) and second (ETH) Generation it looks like that the transactions have to get into the block, which then has to be "kicked" or solved. It is different with these transactions, sometimes you have to wait longer in the queue to get to the block and then sometimes you have to wait longer for confirmations (before the block is excavated).

It all makes the Bitcoin chain and Ethereum chain optimal only for a certain number of users and thus the transactions carried out. As the users and transactions increase, there is less and less space in the blocks. The situation of increased user activity means that you have to wait for the transaction, of course you can pay a higher transaction fee (so-called fee for miners) and speed up our transaction, but it is quite expensive.

During the so-called cryptocurrency bubble that took place in December 2017, when BTC "knocked" to the price of $ 20, the fee for a transfer in BTC ranged from $ 000 to even $ 50. Ethereum at that time, unfortunately, was not better, due to the many emerging applications based on smartcontracts (famous cats) the ethereum network was also "jammed" and users had to pay high transaction fees to speed up their transactions.

Graf IOTA or Blockchain 3 generation


Directed Acyclic Graph this mathematical name exhausts the technology behind it IOTA.

Technical readers probably know the nuances of mathematics and do not need to explain to them what this name means from the kingdom of the Queen of Sciences. For less technical readers who are already afraid of this name I have prepared a description that should help you decipher this shortcut.

Graf is a set of vertices which in the case of IOTy are single transactions, directed means nothing but an orderly one-way course, and acyclic in turn is a cyclic one, which means that there is no repeating cycle.

Okay, how is it going to blockchain and the transaction, someone will ask?

If you translate this into blockchain technology, it will mean:

  • every user who performs a transaction becomes a block (top of the graph)
  • the transaction is irrevocable after the first confirmation (one-way)
  • acyclic means that transactions take place differently (no route in the graph is repeated)

What advantages does IOTA have compared to the standard blockchain?

Structure DAG (Direct Acrylic Graph i.e. Directed Acylic Graph) allows you to get a very large amount of transactions at once

Who confirms these blocks-transactions?

Answer: Users themselves. Each user who makes a transaction must confirm two other transactions (of course, the confirmation is done automatically within the network). This solution makes that the more users there are, the faster the network is. This is a breakthrough solution because, as I mentioned before, the first and second generation cryptocurrencies have a scaling problem (more users and transactions mean more network load).

No transaction fees - yes transfers in IOTA are completely free!, no blocks to extract and hence the lack of standard miners and mines. The possibility of making transactions offline as in Lightning Network BTC - after turning online, the given convolution, i.e. the graph after being matched to a larger graph, will be confirmed and included in the network. This means that transactions in a smaller graph can be made offline without the rest of the network. IOTA therefore remains the only cryptocurrency that is decentralized and has a fast network that works without fees.

Let it not be so rosy ...

The IOTA network is very innovative, and like any innovation, it has some drawbacks. The two confirmations are quick, light and pleasant, but are also a serious logical flaw. The attacker can theoretically "flood" the network with very many false trades: as a result of the two-confirmation rule, some of these false trades can be confirmed and "enter" the graph. The attack can be additionally supported by the above-mentioned offline graph case. This means that an attack can additionally use a large number of transactions that go from offline to online state. IOTA Foundation it defends itself that it has the right algorithms that are able to detect and reject false transactions. So far, there has not been a confirmed attempt of such an attack.

coordinates - it is a special node of the IOTA network, which is more trusted by the network, designed to minimize the chances of an attack on the network. Unfortunately, the coordinate is centralized, so the foundation can theoretically manipulate the transaction book based on a graph.

What is the biggest advantage, i.e. the speed of the network depending on the number of users, works well when we have a large number of users, unfortunately in the case of a smaller number or a sudden drop in the number of transactions in the network is created cork. There is no possibility to speed up the transaction as in BTC or ETH. It remains then politely to wait for confirmation.


IOTA Foundation sees the use of its cryptocurrency as the main carrier for the transaction internet of things (IoT - Internet of Things). Their intention is that in the future even the least important elements of the network, such as smartwatches, smart refrigerators, smart washing machines, etc., could make microtransactions in the network. We can imagine an autonomous car in the future, which pays for the highway itself or a smart fridge that sells the food itself. This is just a part of the possibility of using a graph that does not require transaction fees for its operation. And that can act completely autonomously.

The foundation itself works all the time and acquires new contractors for its project. Currently, the project that ICO collected in ICO in 2015 year just below 600 000 $ is one of the best promising projects on the cryptantine. IOTA has confirmed cooperation with many large corporations, among others Microsoft, Fujitsu, Bosch and Volkswagen

Due to the great interest on the part of large corporations before the IOTA foundation and their cryptocurrency MIOTA, an interesting future is emerging. Is this a good investment measure? As always, in such a case, to be 100% sure, a time machine would be useful ...

Meanwhile, if someone would like to be tempted and purchase some IOTY for HODLING, he can do it on one of the largest stock exchanges in the world Binance

5 / 5 - (8 votes)
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