There are many interesting projects taking place in the world of digital currency right now. IOTA is a project that will serve as a decentralized token for the Internet of Things ecosystem, built on top of “Tangle,” rather than a blockchain. The project looks very interesting, as the Internet of Things is becoming more popular all over the world. But how will this mix of connected devices and micropayments work exactly?
Learning More About IOTA
The IOTA project is designed to create a secure and decentralized financial ecosystem for the Internet of Things. As more and more devices will be able to communicate with each other, payments will start playing a role at some point. A decentralized cryptocurrency seems to fit the bill nicely when it comes to making micropayments.
However, IOTA is quite different from Bitcoin and Ethereum, as it uses no blockchain. Instead, it uses “Tangle“, a Directed Acyclic Graph shaping up a tangle. Once an IOTA transaction is broadcasted to the network, two previous transactions must be approved, and network nodes will need to make sure approved transactions are not conflicting. This is a different way tot tackle the threat of double-spends with virtual currencies.