IOTA, a very interesting new cryptocurrency

IOTA is currently the rising star among the cryptocurrencies. I have been looking into the interesting technology behind IOTA.

Although I am not an expert on cryptology it seems to me that the tangle could be an interesting improvement on the bitcoin/blockchain architecture. The tangle will cause the processing of transactions to get faster when more people use it, unlike the blockchain where scaling is an issue. Another important improvement is that IOTA doesn't require miners. Currently in bitcoin the PoW effort, that has to be delivered by the miners, is wasting a lot of electricity. More than 90% of the mining is now done in countries with relatively cheap electricity. This has moved the vast majority of mining to China where one company (Bitmain) now controls more than 30% of the mining. To me that seems to be an undesirable form of centralisation of the mining and the associated power over bitcoin. In IOTA the PoW mechanism of bitcoin has been replaced by an effort that needs to be done by every user who makes a transaction. There is no mining fee and this makes IOTA useful for very small transactions. This will make IOTA useful as a currency for the internet of things were machines make a lot of small payments for services delivered by other machines.

The market seems to agree with my positive opinion on IOTA because although Bitfinex is the only main exchange that supports IOTA the value of IOTA has gone up from USD 0,20 to USD 0,70 in the past month. With Bitfinex as sole trading platform the trading volume and the marketcap are now in the top 10 of cryptocurrencies. I assume that because of that the other main exchanges will also start support for IOTA soon and that could give the value an extra boost. So far I have not seen announcements from Kraken, Poloniex or Bittrex that they are going to support IOTA trading.

PS If you decide to buy some IOTA you could request Poloniex to add IOTA here: https://poloniex.com/coinRequest.