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In a nutshell: What is IOTA?

IOTA, brought to you by the IOTA Foundation (IF) is a revolutionary crypto currency built on the Tangle (read: Whitepaper). A blockless distributed ledger which is scalable, lightweight and for the first time ever makes it possible to transfer value without any fees.

The IOTA Foundation's mission statement is to become the de-facto currency for the IoT (Internet of Things) allowing a true M2M (Machine to Machine) Ecosystem

Our vision is to enable all connected devices through verification of truth and transactional settlements which incentivize devices to make available its properties and data in real time. This gives birth to entirely new general purpose applications and value chains. [source]

The 3 main advantages of IOTA are:

  1. Feeless
    The most popular feature is that IOTA doesnt have any fees. Mining other currencies and waiting for them to be approved can takes ages and can cost a rather large percentage of your earnings.
  2. Micro Transactions
    IOTA runs on the Tangle which for the first time ever allows a crypto currency to send micro payments. You can even send 0 IOTA transactions on the Tangle from wallet to wallet (Not on exchanges, as they impose minimum amounts)
  3. Scalable
    The IOTA Foundation have not even released all the use cases for how scalable IOTA and the Tangle are. Have a look around the internet: The distributed ledger revolution has only barely begun. There is bound to be some revolutionary tech coming soon.

Check out the how to buy iota guide if you want to get involved in the visionary project.

What is DAG?

IOTA does not use the conventional blockchain, instead it uses something called DAG (Directed Acyclic Graph). Instead of adding blocks to a chain in order to get the longest chain, it adds them in, in a sort of web like structure, as visualised by the image below:

IOTA DAG Technology Representation

So, how does IOTA (using DAG technology) compare to something like Bitcoin (using Blockchain)? Well, Bitcoin has always been inefficient due to the fundamental mechanism of which it operates. This is called proof-of-work (POW). Because blocks cannot be created simultaneously it means that it takes a long time to progress or add anything to the chain.

Blockchain is like a linked storage structure which only allows for only one chain on the whole network. When there is a high demand for blocks to be processed and validated and added to the chain this can cause the whole system to lag and become slow. Like when CryptoKitties clogged up the Ethereum chain.

DAG, on the other hand has linked transactions, from one to another, meaning one transaction confirms the next. This is the opposite to proof-of-work (POW). These links are where the term DAG comes from, just like blocks getting hashed are where the blockchain receives its name.

Keeping your IOTA secure

The best way to keep your IOTA secure is to store it within a wallet. Thankfully the IF (IOTA Foundation) have created a third party verified and audited secure digital crypto wallet called Trinity. Read more about Trinity

Getting involved

You can get involved with the IF (IOTA Foundation) in various ways:

Welcome to the IOTA community. A community that is focused on creating a de-centralised and open sourced future.