Back to the Basics

The full article was originally published by HelloIOTA. Read the full article here.

We’ve been explaining the foundations of IOTA for years now. Since it’s so different from blockchains, newcomers to the IOTA space have been well served by extra-careful explanations.

We talked to @Schmucklos who curates the gold standard of IOTA German-language websites,, whose mission it is to spread information about IOTA. Here he shares his most updated explanation of what IOTA actually is.

Let’s get back to the basics.

What is IOTA?

IOTA is an open source distributed ledger technology and a cryptocurrency, which is developed and provided by the non-profit-making IOTA Foundation  (foundation under German law) with its headquarters in Berlin.

The IOTA token used in the network is a digital currency form (cryptocurrency) and is required for the value transfer within the IOTA network, the maximum number of tokens is 2,779,530,283 MIOTA. All tokens were issued (pre-mined) and are in circulation, and the four founders also had to finance their tokens from their private assets.

The goal of the IOTA Foundation is to create a level of trust for the Internet of Things (IoT) that enables the devices in the IoT to exchange unchangeable data and values ​​with each other. To enable this, the following features are fundamental:

  • Scalable –  Process a significant number of transactions per second across a large network of nodes with fast confirmation times.
  • Lean system – Low-  performing  devices should be able to participate directly in the network.
  • Toll Free – Transactions should be sent without paying network fees  .


Data structure

In addition to fees, conventional DLTs such as blockchain have other limiting factors and are therefore unsuitable for achieving the IOTA goal. For example, the inherent limitation of the speed of blockchain networks, which is commonly referred to as “blockchain bottleneck”. There is only one side of the blockchain where new transactions can be added – the end of the chain. The resulting negative effects on network throughput are shown in this simple graphic:

Read the full Article

The full article was originally published by HelloIOTA, where people are continuing the conversation by highlighting and responding to this story.

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