IOTA – The Future Backbone of IoT

This is the Gartner’s Hype Cycle of 2018. It tells which technology will evolve with time and measures its commercial viability. According to Gartner, the digital ecosystems like the Internet of Things platform (which are at the peak of inflation expectations) could emerge as the next big thing. But, what would Internet of Things at its peak would look like?

This is a small picture of lets say, 2058. You stop by your office as a part of your usual routine of the day. Unlike in 2018, where your car would sit in the parking being of absolute no use for the next bundle of hours, in 2058, the electric car you drove to office on would make use of itself when you are not around. It would autonomously go to the nearby charging setup and charge itself without you even instructing it. Now that it has the capacity to run, your car would make itself available for any passenger who needs a lift. If it is not needed on the road, your fully charged autonomous car would supply its electricity somewhere, where it is needed.

This entire procedure requires a series of seamless interactions between machines. The infrastructure that would allow these machine to machine (M2M) interactions to occur is called the Internet of Things, or IoT for short. IoT is a protocol which allows things (with chips) to connect with each other (just like the internet).

The scenario above is exactly what Terry Shane portrayed when giving talk on the startup, IOTA, called “IOTA – 100 Billion Reasons Why.”

IOTA is a foundation which uses the distributed ledger technology to power the internet of things and aims to create ecosystem that makes scenarios like the one above possible.

IOTA’s vision

In its website, IOTA claims:

“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.”

Lets see what they mean by this a little more deeply.

For any smart ecosystem, two things are absolutely necessary:
i-  Data
ii- Connection between the devices

What’s wrong with data?

IBM knew the weight of its statement, when it said: “Data is the new oil.” Everything today is tending towards digitalization, and every smart ecosystem requires data as an input to function. However, it is so easy to find false or forged data. Digital ledger technology is an innovation made to curb this complication. It authenticates data, and puts data forgery out of question, making it the ideal way to carry out secure transactions. IOTA seeks to use this innovation to connect devices and allow them to share data, thus radically transforming the IoT.

Why does the traditional IoT fail to deliver?

By 2025, it is estimated that the number of devices that will be connected to each other will be 75 billion. The amount of data that would circulate around these will be tremendous. In order to stay well connected and exchange information at appropriate rates, it is fundamental that the broadband speeds keep up with the increase in the connected devices. However, they (speeds) are expected to only double. The centralized cloud silos are also not likely keep up with the surge in the connected devices. Although, Fog and Mist computing along with some others are a solution for this, however; their distribution seems practically difficult. As in its website it is stated:

“This conundrum was the cause of the inception of IOTA. Through zero fee transactions, these devices can share these technological resources amongst one another in real time locally in a distributed network, thus avoiding the centralized points of failure,”

IOTA’s specialty – Tangle

IOTA is creating a lot of hype not only because it makes the futuristic fantasies possible, but also because the distributed ledger technology behind it is unique. It is not based on blockchain. Rather as it claims so, it uses a better infrastructure, Tangle.

IOTA’s whitepaper discusses Tangle in a lot of detail. It says that blockchain has two major problems which makes it unsuitable for the purpose of IoT:
i) it cannot scale.
ii) fees.

Unlike blockchain, Tangle uses DAG – Directed Acyclic Graphs. The whitepaper summarizes the main idea behind Tangle: “to issue a transaction, users must work to approve other transactions. Therefore, users who issue a transaction are contributing to the network’s security. It is assumed that the nodes check if the approved transactions are not conflicting. If a node finds that a transaction is in conflict with the tangle history, the node will not approve the conflicting transaction in either a direct or indirect manner”

The following video is very helpful at understanding the infrastructure.

In blockchain, miners verify a transaction, whereas in Tangle, one transaction is required to verify two other transactions to become a part of the network. These unique features mean that Tangle has no need of miners, thus, it eliminates the need for fees. Similarly, the fact that one transaction is approving the other two, means that the technology scales – more the transactions, better the technology works; and as a result its speed and security increases.

The features of scalability and the elimination of fees makes Tangle ideal for the development of IoT. This is because IoT requires a monumental amount of micro-transactions to occur. In the case of blockchain, micro-transactions are difficult to carry out because they offer fees of less values to miners, who are rather more prone to mine transactions that offer them more fees. Tangle gets rid of the miners, thus eliminating the need of any fees. Moreover, blockchain is very slow; it takes about ten minutes for one transaction to occur. In the case of IoT, machine-to-machine transactions/interactions need to occur at the blink of an eye. Tangle’s speed only increases with the number of transactions.

The Token

As any other cryptocurrency, IOTA is used to pay for transactions. The currency occurs in six different forms of measurement – i, Ki, Mi, Gi, Ti and Pi each of which corresponds to:

1i     = 1i
1Ki   = 1,000i
1Mi  = 1,000,000i
1Gi  = 1,000,000,000i
1 Ti  = 1,000,000,000,000i
1Pi  = 1,000,000,000,000,000i

The total number of the currency is 2,779,530,283 MIOTA (Mi). 1 MIOTA (Mi) is currently valued at $0.776408 and the currency is ranked at 10 in the market cap values. Given following is the chart for the market cap of the MIOTA.

The IOTA Foundation

IOTA works as a foundation, established in Germany as a formal, non-profit organization in 2017. Its primary goals include:

  • Research and secure the foundational protocol layer, and create new knowledge to benefit the ecosystem behind the economy of things.
  • Develop production ready software for the community, partners and ecosystem to use and expand upon.
  • Educate and promote technologies and use cases for new generations to understand and to ensure the foundation’s success.
  • Standardise and ensure the maturity and widespread adoption of the economy of things.

And it is funded by:

  • Holdings of IOTA tokens from community donations and unclaimed tokens from the initial crowdsale.
  • Grants from governments to perform research and development.
  • Donations from individuals or enterprises.

The Team

IOTA was established by Dominik Schiener and David Sønstebø. The team includes a wide range of professionals.


According to IOTA’s medium blog, this year on the 18th of April, ElaadNL released a charging station where charging and payment can be done with IOTA. The stations are in used in Netherlands.

Recently, this year in August it announced the public beta release of the Trinity Desktop wallet app followed by the initiation of the IOTA Hub. It also released a beta version of its new JavaScript library in the same month.

The idea behind IOTA is very interesting, no wonder why the IoT platform is up on the peak of the Gartner’s Hype Cycle. BlockPubliser had the pleasure to ask the company itself where it sees IoT on the cycle in the next two year. Here is what they had to say:

The development in IoT will bring Industry 4.0 to its zenith and open possibilities for others. The question is, will it be IOTA which allows IoT to do it?

Qirat Ayaz

Passionate about robots and how the robotics is changing everything around us. Writes about startups in the blockchain space. Contact the editor at

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