why join the navy.
[
With bitcoin becoming booming in the past six year, Blockchain as Bitcoin’s underlying core technology has attracted the attentions from the world and proved its amazing real-world value in many industries. However, one notable drawback of this technology is the concept of a transaction fee for transactions of any value. With the rapidly increasing of IoT industry, Machine to Machine economy is and will be based on micro-transaction, which means using Blockchain technology could lead to that transaction fee being even larger than the amount of value transferred due to its high transaction fee [3]. To solve this problem, a cryptocurrency called IoTA , was designed specifically for the IoT industry. IoTA is a new cryptocurrency that utilizes the tangle technology as its core instead of Blockchain technology. With the tangle technology, IoTA is capable to serve the open market for real-time and zero-fee transactions involving IoT resources such as data, computation power, storage capacity, bandwidth, and anything else which is useful with its scalability, decentralization and quantum-immunity.
As for the real examples, there would be many of IoTA use based on M2M(Machine to Machine) examples which are connected to our life tightly.
In the Internets-of-Things economy, smart devices or sensors are made to create or exchange value by collecting data, controlling or implementing more complex functions. As these devices or sensors need to provide value, a means of exchange of currency is needed to represent that value: that is IoTA. Imagine in the future, if your smartwatch wants to gather weather data from a network of sensors which is deployed by someone or other organisations, the owner of data could either make the data free or charge for, but if they charge for their data, then they would need a whole infrastructure to support it, and that is IoTA network.
Also, usually we need to call the telecommunication companies to set up the Internet connection in our house and pay for it monthly or yearly. However, with IoTA platform, we do not need to subscribe for the internet connection/data or buy any credit upfront, because everytime we browse the Internet, our devices will get connected to the Internet and they would buy data feeless from the station of telecommunication companies in real-time [2]. With the IoTA platform, all these following use cases could become reality [4]:
IoTA was first conceptualized in 2014 and later founded by David Sønstebø, Sergey Ivancheglo, Dominik Schiener, and Dr. Serguei Popov(2015). According to The Tangle, IoTA is a new cryptocurrency which is designed specially for the Internet-of-Things (IoT) industry [14]. As the internet of things has been evolving, the another technology is developing rapidly as well. That is the use of sensors, electronic tags, actuators, observe and control objects in the physical world, these devices which increases in the computational capacity are now able to communicate information about real world via fixed network with M2M solutions [13]. This also leads to micropayment requirements for charging, billing, and auditing among M2M services or resources. However, Serguei Popov(2016) pointed out that the development of paid M2M services or resources in IoT is hampered by relatively big transaction costs of payment operations.Based on this, Serguei Popov proposed IoTA as the novel approach to enable real-time microtransactions and be resistant to the threat of quantum computing.
The comparison will cover the following aspects:
Bitcoin, as the most famous blockchain based cryptocurrency. According to bitcoin, A Peer-to-Peer Electronic Cash System, was offered a Proof of Work mechanism by Satoshi Nakamoto (2009). In such a system, miners are responsible for processing the transactions that build these blocks and hence contribute for maintaining integrity of the system. In comparison there is no separate miners in IoTA, IoTA is built on the Tangle,a Directed Acyclic Graph (DAG) as Serguei Popov(2016) pointed out in the Tangle. With such a data structure, each participant in the network that wants to make a transaction has to actively participate in the consensus of the network by approving 2 past transactions.
As explained by Divesh Aggarwal, Gavin K. Brennen, Troy Lee, Miklos Santha, Marco Tomamichel [10] in Quantum attacks on Bitcoin, and how to protect against them, The key cryptographic protocols used to secure the internet and financial transactions of today are all susceptible to attack by the development of a sufficiently large quantum compute, and blockchain based cryptocurrency like Bitcoin could be completely broken by a quantum computer as early as 2027. In comparison with IoTA, Serguei Popov(2016) indicated that IoTA uses ‘exclusively quantum resistant cryptographic algorithms’ which are immune to this brute force attack (unlike current blockchain projects). In addition, the Tangle decreases impact of a Quantum consensus attack by 1 million times.
As the incentive is funded with transaction fees in bitcoin system [12], there would be transaction fees for transactions of any value. This also set a threshold on the minimum amount of a payment below which money transfers become inexpedient. In IOTA, there are no transaction fees with the consensus mechanism [14], hence it is low-cost and friendly towards micropayments with these peer-to-peer confirmations.
As the fundamental mechanism and remarkable features of IoTA have been detailed discussed in the previous reports, the potential challenge and security risk which accompany IoTA platform in the future is still worth mentioning in this study since IoTA system has not yet been proven on a mass scale.
The first concern comes with fee-less system conception. IoTA is made to be fee-less, which means you do not need to pay any transaction fees to have your transaction implemented in the distributed ledger, the validation of your transactions would be processed by new transactions referred to yours. However, in reality each participant needs to do small PoW to create transaction, thus each transaction does pay a fee, in the form of proof of work. This means every user need to spend some computational power as well, which is perfect for CPUs of personal computers. But considering that IoTA is made specifically for IoT where CPU resources are extremely limited, it’s only a matter of time before ASIC processors are released for IOTA, these will make local PoW extremely slow as the difficulty will increase to keep a high PoW cost. [28]
Another important issue is that IoTA cannot do generalized smart contracts as which is known from Ethereum.[28] This is due to the design of the Tangle, transaction order is subjective to each node, which is much less the case with a blockchain. For Blockchain based cryptocurrency like Ethereum, all nodes must agree on the order of the blocks, with forks only happening occasionally. Forks would happen constantly if smart contracts were implemented in IoTA, as IoTA don’t have strongly ordered transactions. As most of the proposed use cases by IOTA, a smart contract cryptocurrency would be a huge advantage. This makes IoTA not a competitor to Ethereum. Once a scalable cryptocurrency releases that implements smart contracts, IoTA might be popped out of the market very soon.
For IoTA users, the wallet is still hard to use right now, as there is no good graphical user interface. It is usually happened that the user’s IoTA balance “disappear” after snapshots, so the user has to go through a process to get their balance reappear. Thus, to make IoTA be the backbone of IoT manufactures, wallet problems is urgently needed to be solved [27].
The biggest problem now could be IoTA is still in beta phase [27]. Considering the history of Blockchain, every single defects, bugs and faults are highlighted by blockchain developers and users alike. For IoTA, it is only two years since it is conceived and there’s still so much to prove. For example, scalability is a big plus of the tangle, but the tangle has yet to prove that it can maintain eventual consistency within a reasonable timeframe in a network. Also, it is worth considering that what will happen if the monetary value of IoTas becomes very large as has happened with Bitcoin? So IoTA still needs a long time to prove itself.