IOTA coin : what is it ?

IOTA coin is a recent cryptoccurency focusing on IoT (Internet of Things) and micropayments. Contrary to other DLT, IOTA does not use the blokchain, but the Tangle, a directed acyclic graph. In everyday language, it means that transactions, instead of being linear and sequential like in blockchain, append to the distributed ledger by attaching themselves to 2 existing transactions. This approach has several advantages : it is scalable, fast and by getting rid of the mining.

The Tangle, the backbone concept of IOTA

Why IOTA was created ?

As the official IOTA website puts it :

As the Internet-of-Things keep expanding, the need for interoperability and sharing of resources become a necessity. IOTA enables companies to explore new business-2-business models by making every technological resource a potential service to be traded on an open market in real time, with no fees.

The introduction of the white paper also explains well why hte IOTA coin or token is worth :

The rise and success of Bitcoin during the last six years proved that blockchain technology has real-world value. However, this technology also has a number of drawbacks that prevent it from being used as a generic platform for cryptocurrencies across the globe. One notable drawback is the concept of a transaction fee for transactions of any value. The importance of micropayments will increase in the rapidly developing IoT industry, and paying a fee that is larger than the amount of value being transferred is not logical. Furthermore, it is not easy to get rid of fees in the blockchain infrastructure since they serve as an incentive for the creators of blocks. This leads to another issue with existing cryptocurrency technology, namely the heterogeneous nature of the system. There are two distinct types of participants in the system, those who issue transactions, and those who approve transactions. The design of this system creates unavoidable discrimination of some patricipants, which in turn creates conflicts that make all elements spend resources on conflict resolution. The aforementioned issues justify a search for solutions essentially different fro from blockchain technology, the basis for Bitcoin and many other cryptocurrencies.

IOTA coin is only for IoT ?

Some people might be confused and believe that IOTA has only machines as scope. This is wrong : since IOTA proposes a great solution for micropayments, it has the potential to be used by humans in daily life as a payment method, something that is out of reach of Bitcoin right now.