Who may have predicted that a new currency, made without using the blockchain technology would outclass the Bitcoin’s value?
Well, the 2017’s Epic Bitcoin Bull Run may have captured many buy surprises and indeed taken over the mainstream media, tagging along with it a host of other coins. As the hot streak continues, however, word has it that a new cryptocurrency is set to usurp the now-popular BTC.
IOTA is an intriguing example that has benefitted from the sudden and unprecedented rise in the value of bitcoins. However, in a surprising twist of events, this coin has shot in price from just below $4 billion to over $10 billion in two weeks. That isn’t what has shocked many, though!
Sure, it is among the growing coins fraternity. But its structure is not based on the popular blockchain technology. This controversial cryptocurrency rests on a unique mathematical “tangle” that its founders allege it will make it a lot faster and efficient to run.
The sudden run of success started in late November, immediately after its founders, IOTA Foundation, announced that it was partnering with a host of tech firms. IOTA Foundation is a German non-profit organization, and they created this currency as a way of developing a “decentralized data marketplace.”
According to David Sønstebø, the cryptocurrency’s co-founder, the protocol’s original idea was to develop a system that suits connected devices. Right now though, IOTA tokens function pretty much like all the other conventional digital currencies.
In his words, “Organizations amass a massive chunk of data from tech gadgets. Data from weather tracking systems, sensors that work in industries to monitor the working of heavy machinery and other systems are used, and the siloed at companies databases. This means the owner dumps this information.”
The system, however, addresses this phenomenon in two different ways. First, it secures the integrity of the data, essentially storing each of it in a tamper-proof decentralized ledger. Thereafter, IOTA’s system allows a free transaction between whoever owns the stored information and anyone who would like to purchase it.
Maybe you are wondering what’s so unique about this that the coin’s value raises at a terrific rate. Since IOTA is founded, not on a blockchain system, but rather what is called “tangle,” – a mathematical concept known as an acyclic graph, this coin then runs faster and efficiently.
Sønstebø admits that they had to settle for this approach owing to the too much demand and the costly nature of blockchains, nowadays costing as much as $20 per BTC transaction. Moreover, what made the founders sick is the issue with having “miners” expected to verify transactions.
IOTA’s system allows the user to issue a transaction and validates two randomly chosen previous transactions. As the list of investors grows, the “tangled web of confirmation” expands. He, however, admits that in spite of the bloom, IOTA is still in its infancy.
High-profile names responsible for its piloting include Deutsche Telekom, Microsoft, and Fujitsu, which gives a glance of how good it will be. In recent months, however, several respectable members of the cryptocurrency research community voiced their misgivings regarding this coin’s design and security. Brilliant minds from Boston University and MIT even reported “serious vulnerabilities” of this cryptocurrency.”
IOTA has since patched the weakness and supposedly added more security measures to prevent loss of funds. Sønstebø says that a third-party firm is currently helping develop the currency further.
Will IOTA really outdo Bitcoins to become the most sought-after coin? And with it being $10 billion, do you think this will hurt the value of other cryptocurrencies. Please, let us know what you think below.