What Is IOTA and How Does It Work?

Ask any technology enthusiast about the next hot thing after artificial intelligence (AI) and the answer will likely be the Internet of Things (IoT). IoT technology is gaining prominence, with our lives increasingly intertwined by high-tech devices like wearables and health monitoring gadgets. Blockchain is one of the key technologies aiming to facilitate machine-to-machine and human-to-machine interactions in IoT.

However, standard blockchain technology struggles with the monumental volume of microtransactions required for IoT data exchanges. One project that eloquently tackles the technical limitations of blockchain in order to enable these decentralized, tamperproof IoT applications is IOTA (IOTA).

Using a cost-free and extremely scalable alternative to blockchain called directed acyclic graph (DAG), IOTA enables a vast array of IoT use cases. Having launched its mainnet, now referred to as IOTA 1.0, in 2016, the project has recently announced plans for a significant upgrade: IOTA 2.0. The new version will further improve the platform's decentralization and network consensus properties, and introduce smart contracts and tangible rewards for network participants.

Things are definitely on the move for the project. In late November 2023, IOTA announced the launch of a $100 million IOTA Ecosystem DLT Foundation, with headquarters in Abu Dhabi, UAE. The news has put the crypto world's attention back on the project and led to a sharp spike in IOTA’s price. The industry is once again talking IOTA and IoT.

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