What is IOTA? – New Zealand’s IOTA Overview
IOTA is a fast, scalable and cheap network to operate on. The secret to its speed is the tangle technology. Curious? Read more about it.
IOTA is highly unique in how it works, and is often referred to as the “third-generation” cryptocurrency. Where most cryptocurrencies are based on blockchain technology, IOTA works on a different kind of technology, called tangle.
Now, IOTA is still a decentralised cryptocurrency, much like Bitcoin and Ethereum. However, tangle technology have resulted in some impressive results and features that other cryptocurrencies may not have.
What makes IOTA different?
IOTA has a few notable features:
- It requires no miners. Instead a network of computers called validators work together in sync to keep track of value transfers. However, the energy and computational requirements can be said to be so small that the fees are practically null.
- It’s super fast. Unlike blockchains, a tangle data structure doesn’t have to be ordered linearly to remain secure. This gives IOTA flexibility, and as an added bonus, speed.
- It’s super scaleable. When more validators join the network, rather than slowing down the network, the validators maintain the network speed.
In a nutshell, IOTA is a fast, scalable and cheap network to operate on. This is due to the tangle technology.
Now, to understand how IOTA manages to do all these things, let’s start with looking at the infrastructure that IOTA is built on – the tangle.
Learn more: What is Hedera Hashgraph (HBAR)?
What’s a tangle?
A blockchain is, quite simply, a chain made up of digital blocks. Each block records transactions that people make to each other. And as it’s a chain, it has to be built in a linear fashion, one block after the next. This means that there is a limit to how fast the network can process transactions.
IOTA, however, is entirely different. It runs on a tangle, not a chain. And as you might imagine, this means things don’t have to be ordered and structured linearly.
Each block can link into any other block, it doesn’t have to wait in a queue to be the next block in the chain.
The tangle is created by IOTA’s protocol, which requires that each block verifies any two other blocks. This means that blocks can be added to the tangle in any order, and as long as another block verifies them, then they’re good to stay.
It also means that parts of the tangle can go offline for a period, and link back into the main tangle later.
How can IOTA have almost no fee?
Typical cryptocurrencies have blockchain network fees, which are the fees you must pay to get your transaction included in the blockchain.
Fees can change from day to day, but can get quite expensive. For example, Bitcoin fees can get up to $80 per transaction when there’s lots of traffic on the network.
For IOTA , the tangle innovation removes the need for fees. Instead of having to pay someone (e.g. a miner) to verify your transaction and include it in the chain, each block in the IOTA tangle verifies two other blocks, fully removing the need for mining.
Talk about fees, do you wonder how much is the trading fee on Easy Crypto? Have a look at this article on our fees.
What is IOTA good for?
We’ve learned that IOTA is super fast, can handle any number of transactions at once, and that it has almot no fees and so secure that when nodes go offline, things still work the way they should be. Those are some pretty powerful features!
With these, IOTA might help us unlock whole new micro-economies, which would never have been feasible without IOTA’s tech.
For example, NIWA might be interested in buying data from your home weather station at one-millionth of a cent per data point – currently, that’s too ridiculous an amount for anyone to bother about, but with free-of-charge super fast transactions, it might make sense.
And then your weather station could use that IOTA to buy power off your solar panel, which is also making IOTA from drones that are re-charging at it.
The possibilities are endless!
And if this is starting to sound like IOTA could be a currency for the Internet of Things (IOT), that’s exactly what IOTA (aka Internet of Things Application) is aiming to become!
Other IOTA use cases
Let’s say you own a Fujitsu heat pump, and Fujitsu as a company would like to see how their heat pumps are performing after they have been purchased by a customer.
There are many bite-sized bits of data that Fujitsu would like to acquire, such as peak usage times, fan speeds, fan temperatures and what temperatures are prefered in certain geolocations around the globe.
Each heat pump has a little computer chip that gathers all this data that Fitjitsu wants from its customers, but the transaction fees and speeds are too slow to get this in real time with fiat money.
This is where IOTA comes in, as you could create an IOTA wallet, and have your Fujitsu heat pump automatically send you IOTA for every single little droplet of data that they harvest, in real time with no fees.
Another example of how IOTA could be utilised would be if you were to own a Tesla smart car, and Tesla wants to know how their battery is performing, how congested traffic is, average daily commute times, whether there is a pothole on that street you’re about to drive down, how loud you like your music, how many times the car is driven each day, how humid the weather is and so forth.
Clearly, all of this data has value, but it’s worth so little that it’s not worth being traded with fiat due to the high transaction fees.
The use case for IOTA is that your Telsa could pay out IOTA in tiny doses every time that your car automatically generates data. You could make money for just being!
Mainstream Support for IOTA and IOTA Applications
Mainstream technology companies consistently support IOTA. These include Volkswagen, Microsoft, Jaguar, Land Rover, Fujitsu, Samsung, and several others. This is thanks to the fact that the IOTA network can be used to run IOTA applications, as well as process machine to machine (M2M) transactions.
- Masked Authenticated Messaging (MAM) can be used to send encrypted messages & RSS feeds over the IOTA distributed ledger.
- IOTA is already being used by CognIOTA to allow users to rent idle CPU power from other network users in real time.
- Deutsche Telekom, Bosch, and Microsoft are already using IOTA technology to monetise big data.
How to buy IOTA in New Zealand
Now that you have an idea of what IOTA is, its underlying technology, and applications, can you get your hands on some IOTA in New Zealand? The answer is — Yes! You can buy IOTA in New Zealand using Kiwi dollars.
Through Easy Crypto, you can easily buy and sell IOTA using NZD, and even swap between various cryptocurrencies. Here’s how to do it:
1. Sign into your Easy Crypto account.
2. Use the exchange panel on the homepage to enter the amount of NZD to exchange into IOTA.
3. Click ‘Buy Now’ and this page will guide you through the buying process.
4. Enter your wallet address. Be very diligent in checking that you have entered your wallet address correctly. If you send your crypto to the wrong address, there’s very little chance you can recover it. Use the one-click copy-paste feature or QR code if your wallet provides.
5. Pay and wait. Choose your preferred payment method, make your payment in NZD, and then wait for your IOTA wallet balance to increase as we make the delivery.
That’s all the steps you need to get some IOTA into your very own crypto wallet!
We’d also like to take this opportunity to remind you that crypto is very volatile in the market, and prices can change dramatically.
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Disclaimer: Information is current as at the date of publication. This is general information only and is not intended to be advice. Crypto is volatile, carries risk and the value can go up and down. Past performance is not an indicator of future returns. Please do your own research.
Last updated October 11, 2022