IOTA video notes - What is it? How does it work? Invest Yes or No?
I talk about
- WHAT IOTA is
- WHY it is so interesting
- HOW it works and whether you should invest in it or not.
These are just my cliff-notes for my IOTA video on YouTube.
English: coming soon
Official Websites: https://iota.org/
Check out Slack for info! https://ten-x.herokuapp.com/
Talk about problem first: SCALABILITY OF TRANSACTIONS!
- • Connect Internet of Things (Explain what it is!) will have billions of things and will need many Micro- and Nanopayments (will explain in separate video!)
- • BTC: ca 6/sec (Lightning Network & Larger Block size will help) also COMIT!
- • ETH: ca 15/sec (PoS will increase that though)
- • most blockchains can’t handle the scalability problem
WHAT IS ITOA?
- IOTA seems like a 3rd generation decentralized ledger (after Bitcoin and Ethereum) trying to solve that. So far: great idea - no application yet - purely speculative.
HOW DOES IT WORK?
- Tangle - open source distributed ledger - no fees, no blocks
- no difference between user und validator (miner)
- • data structure is a graph, not a blockchain
- • graph: objects connected by vertices
- • objects are transactions
- • in order to create transaction you have to validate 2 other Tx
- • arrows point towards confirmed Tx
- • no blockchain - no blocks and no chain
- • direct and indirect confirmations
- • tangle is more regional - not everyone checking everyone! Example of shared work: not everyone doing everything, but trusting others until they confirm.
- • The more arrows to a Tx, the more confirmations
- • Tangle is the revolutionary part of IOTA
- • Slack: find neighbours etc - be careful of scams!
- ¥ Tips: transactions which have no other transactions referencing them.
- • Seed: String consisting only of uppercase latin letters and 9's which is used to access an account. A seed is like a private key/password. Keep it secure and don't share it with anyone. If someone has access to your seed they can access your account.
- • Consisting of 81-chars, only latin letters and 9's
- • Quantum resistant cryptography: Winternitz Signature instead of ECC
- • https://eprint.iacr.org/2011/191.pdf
Nonces are NOT for PoW - it is for spam protection! Spam protection:
- 1. fees (ripple)
- 2. limit (bitcoin)
- 3. work (iota)
- • consensus is part of TenX mechanism - no fees (TenX fees are for consensus from Miners)
- • Miner vs. User
- • Nodes have “weight”: the more the deeper the more confirmed
- • Depth = Time
- • Weight = confirmations
- • Height = distance from Genesis TenX
- • Score: how much have you verified (directly and indirectly) - the higher the better
WHEN IS IT TOO LARGE? Snapshots are being made - coordinators! https://pastebin.com/NdQjLWbK
- • Go, Rust, C++ too… that’s all good!
WHAT ARE THE TECH CHALLENGES:
- • system for NO lazy notes (only certain amount is considered new and ok - f.e. 50%)
- • Confirmation takes a few hours on a phone - less than a minute on a good computer – better to outsource? Fees could come in there!
- • Scalability - coordinator right now - should be switched off at some time – should “snapshots” be totally decentralized?
- • high load vs. low load to keep load low! Goal: keep tips low
- ¥ ATTACKS!
WALLETS / EXCHANGES:
- • https://github.com/iotaledger/wallet/releases
- • Initial trading on Slack
- • Today on bitfinex - why no other exchanges?
- • New tech! Liquidity squeeze - helps price!
- • No inflation! Huge amount - MIOTA = million!
- • 1 MIOTA has 1,000,000 iotas
- • Why is the price that high? Well, think of how many Satoshis there are!
- • miota = million
- • Healthcare , Microsoft, Refugee non-profit, trusted IoT alliance - many other companies:
- • https://azure.microsoft.com/en-gb/blog/azure-blockchain-update-5/
- • https://www.cryptocoinsnews.com/iota-spearheads-dlt-research-in-norway/
- • https://www.cryptocoinsnews.com/iota-foundation-enters-historic-partnership-with-refugee-nonprofit/
- 1. TX mostly (micro etc. cause no fees)
- 2. oracles in the future
- 3. smart contracts in the future
This simple rule leads to:
the more people use IOTA, the more transactions get referenced and confirmed
- ¥ Will it actually work?
- ¥ Will hardware integrate this system? Big challenge.
INVEST - Yes or No? relatively low volume for it’s size (1 billion vs. 10 million cap) & billion dollar market cap… be careful
Users? 0 Businesses? 0 Devices? 0
I put some money into it - it is risky, but I like when companies push tech forward.