What is IOTA? Old School Crypto for the Internet of Things

2022-06-22, 02:53

What is IOTA? IOTA, with its token IOTA, is the first known project who sought to make Distributed Ledger Technology (DLT) to the Internet of Things (IoT). Therefore, the main goal of the project is to provide decentralized tech that is able to bring such IoT devices and platforms to their maximum potential - and therefore utility to our everyday lives.

Crypto for the Internet of Things: IOTA is already being applied to several segments of our daily lives, including ecological sustainability, digital identities, digital wallets and payment systems for electric vehicles and peerless collaboration for urban mapping (smart cities).

IOTA’s past crypto security issues: In September 2017, researchers from MIT were able to break the consensus protocol by exploiting a particular function in the network of a has called Curl-27 - which was dropped by the foundation. In January 2018, over 10 million dollars in IOTA tokens were stolen from the network by a user who managed to create a seed-phrase generator that could impersonate other wallets - he was arrested a year later. Then in November 2019, a major exploit through IOTA’s Trinity wallets lasted several months and resulted in IOTA shutting down its network for 11 days in February 2020.

How to buy IOTA: Once you have created a Gate.io account, head over to the Trade section and select Spot Trading. You will be directed to Gate.io’s main trading hub. From the top-left corner, search IOTA to see what pairs are available to trade from.

How to store IOTA: When assets are purchased in Gate.io, they are immediately provided with state-of-the-art custody which can be accessed through the Wallet menu on the top-right corner. Just head to Funds Overview and select the chosen account that you’d like to view your assets on.

How to stake IOTA: Gate.io offers staking options to thousands of cryptocurrencies, and that includes staking IOTA. To stake IOTA, head to the Finance menu on the top toolbar, then click HODL & Earn. From there, click on the Flexible Term category to see what IOTA staking options are currently available.

Keywords: what is iota, crypto for the internet of things, crypto security issues, ico boom, 2017 ico, initial coin offering, iot devices, iot blockchain, smart cities, electric vehicles, dlt networks, distributed ledger technology, how to buy iota, how to store iota, how to stake iota

[Full Article]

The year 2017 was marked by many things in the crypto community; the official rise of cryptocurrency as a whole into mainstream media and mainstream investors, the boom of Initial Coin Offerings (ICO) with countless new projects arriving pretty much every day, the beginning of the official DeFi framework for smart contracts, the first NFTs minted and more.

It was also a massive year for one altcoin project in particular. IOTA. Having lost part of its steam over the past few years, IOTA was definitely a project ahead of its time. Despite not being seen much in the headlines recently, IOTA paved the way for novel applications for cryptocurrencies that hadn’t been seen before - and also created the first altcoin case of a fervorous community engaged in market hype and intense shilling.

In this article, we explain what IOTA is, and the frameworks behind this project which became a massive leader during the notorious ICO boom of 2017.

What is IOTA?

Source: Globo

IOTA, with its token IOTA, is the first known project who sought to make Distributed Ledger Technology (DLT) to the Internet of Things (IoT). Therefore, the main goal of the project is to provide decentralized tech that is able to bring such IoT devices and platforms to their maximum potential - and therefore utility to our everyday lives.

The project was founded back in 2016 in Germany, by computer scientists and software developers Dominik Schiener, Sergey Ivancheglo, David Sonstebo and Sergey Popov. The project was financed entirely through its decentralized Initial Coin Offering, without the team reaching out to particular investors and enterprises looking to hold a large share of the organization - as happened with the Ethereum Foundation in 2015, for instance. With a funding of $500 thousand dollars, or 1.300 Bitcoin at the time (can you imagine?!) the journey began to create a fully scalable and secure IoT crypto chain.

Crypto for the Internet of Things

All areas that IOTA seeks to impact. Source: IOTA

As previously mentioned, IOTA’s goal is to create a scalable DLT network with the goal of connecting IoT devices in a peerless, fast manner. The more decentralized and quick this network is, the more such devices are able to connect and share information with each other close to real-time thus aiding in general efficiency for the hardware.

Currently, under development and execution through the IOTA Foundation based in Germany, IOTA is already being applied to several segments of our daily lives. The list is quite large, but the main focuses are:

- Sustainability, and management of natural resources
- Decentralized digital identity verifications, in a citizen-centric form of governance
- Decentralized digital wallets and charging payments for electric vehicles, as well as their connection to their surroundings
- Peer to peer collaboration in urban management and mapping - the so-called “smart cities”
- Decentralized trade certificates for global trade, ranging from digital documents to even physical containers

These are just a few of the many applications related to IOTA, which has made its key goal to branch into all forms of the Internet of Things to make the ecosystem more efficient and trustworthy.

So how does IOTA accomplishes this? Through its Tangle consensus, which has an extremely efficient transactional speed by making the network not distinguish between node operators (responsible for the active function of the network) and mere users. Not only so, but creating a node to operate in the network is extremely cheap compared to other large crypto projects - which are usually priced in the tens of thousands of dollars.

Such high speeds and novel networks not distinguishing between types of interactions did come with a price, however, as IOTA suffered some major breaches from 2017 to 2020.

IOTA’s past crypto security issues

The first major problem regarding IOTA’s security framework was in September 2017, when researchers from MIT were able to break the consensus protocol by exploiting a particular function in the network of a has called Curl-27. The exploiters were merely researchers and not hackers, notifying the IOTA team of the matter immediately - which resulted in IOTA dropping this hash for other options. Despite the swift response, IOTA’s foundation was heavily criticized for denying the allegations of a breach until it was clearly evident that the issue existed (similar to Do Kwon’s recent approach to Terra prior to the crash).

Then in January 2018, over 10 million dollars in IOTA tokens were stolen from the network by a user who managed to create a seed-phrase generator that could impersonate other wallets. It was an extreme case of fraud only resolved a year later in 2019, when the perpetrator was captured.

Then in November 2019, another hacker found a breach in the Trinity wallets managed by IOTA and stole over 2 million dollars in tokens. IOTA seemed to have fixed the issue but the hack went on, even reaching a third-party app in IOTA called MoonPay. In February of 2020, IOTA finally decided to shut down its network until the issue was officially resolved - which took 11 intense days of problem-solving for the community.

Since then, the IOTA ecosystem has been very functional and with several different IoT applications active - including major organizations such as Dell, Linux and the City of Austin, Texas.

How to buy IOTA

IOTA’s native token IOTA can be purchased at Gate.io multi-services platform through several ways; from a cash deposit, crypto deposit, credit card and P2P trade.

Once you have created a Gate.io account, head over to the Trade section and select Spot Trading. You will be directed to Gate.io’s main trading hub. From the top-left corner, search IOTA to see what pairs are available to trade from - the most popular one being IOTA/USDT.

If your account already has the proper funds to pair with the trade, you are ready to execute your order!

How to store IOTA

When assets are purchased in Gate.io, they are immediately provided with state-of-the-art custody which can be accessed through the Wallet menu on the top-right corner. Just head to Funds Overview and select the chosen account that you’d like to view your assets on.

How to stake IOTA

Gate.io offers staking options to thousands of cryptocurrencies, and that includes staking IOTA. To stake IOTA, head to the Finance menu on the top toolbar, then click HODL & Earn. From there, click on the Flexible Term category to see what IOTA staking options are currently available - with new opportunities potentially added at any time. The same format applies to any other asset available on the platform. Browse around and see what investment options interest you!

Author: Gate.io Researcher: Victor Bastos

* This article represents only the views of the researcher and does not constitute any investment suggestions.

*Gate.io reserves all rights to this article. Reposting of the article will be permitted provided Gate.io is referenced. In all other cases, legal action will be taken due to copyright infringement.