Summary

The IOTA Foundation was founded by Dominik Schiener and David Sønstebø and is a non-profit organization whose goal is to build the backbone of The Internet of Things (IoT). IoT is becoming increasingly popular as the world becomes more digitized. The vision of Iota is that we’ll live in a world in the future where machines transact and do business with each other completely autonomously.

A use-case might be your self-driving car dropping you off work, then going at work itself to make itself money. It will work as an autonomous taxi-service and when it has no customers it will park itself at a parking lot and pay the parking fee from its own wallet. When it needs fuel it will pay for it by itself, as well as its own insurances, taxes etc.

To realize their dream, the IOTA Foundation understand that they must develop a completely free, decentralized and secure payment-network, that can handle nano transactions, scale with adoption and operate autonomously. Since transaction speeds do not increase with increased adoption on the blockchains we know today, IOTA decided to implement a completely different data type for their network. It is called a Directed Acyclic Graph (DAG).

A DAG consists of nodes and edges. Nodes in this case are transactions and edges connections between transactions. With blockchain transactions are bundled together in blocks by miners and are then connected one-dimensionally, each block points to the next. With a DAG transactions are not bundled together, but each new transaction points to (and verifies) two older ones. There is no need for 3rd parties like miners to reach consensus The users are the miners. When transacting, you are verifying two other transactions in the process. The amount of PoW required from each participant of the network is incredibly tiny, hence usage of the network is virtually free. IOTA call their DAG “The Tangle” and if you visualize how the above would physically look, you’d understand why. You can do so here http://live.iotaknot.com/ .

The technicalities of IOTA makes it impossible for the network to grow from nothing to something without being vulnerable to security breaches. As such IOTA is currently secured by a centralized node, The Coordinator, run by the IOTA Foundation. The Coordinator will be shut down when the network increases enough in size to be secure on its own.

Swot analysis of IOTA

Strengths

• No mining, no blocks, no difficulty
• No transaction fees
• Scales almost infinitely, unlike Blockchains
• Not solely made as a currency but as an interoperability protocol that solves the problems of the IoT
• Wants to enable the machine economy

Weakness

• Wallet issues
• Fairly centralized and not trustless for now
• Very hard for exchanges to list IOTA since it is not a blockchain

Opportunity

• Project “Q”
• Long list of partners and connections can be leveraged
• Multiple giant tech companies participate in The IOTA Data Marketplace
• The Trinity Wallet might fix all IOTA’s wallet issues and trust in IOTA might be reestablished
• IXI HUB will make it much easier for exchanges to list IOTA

Threat

• Core IOTA Foundation members tend to get into wars in twitter which might impact their image
• An attacker only has to outpower the computational power of the network at any given time (which might occasionally drop)

Where to buy IOTA?

• Binance Click here to register a free account
• Bitfinex

Several other minor exchanges that I do not think is relevant to mention.