The IOTA team is advancing their cryptocurrency protocol to create an economy for IoT devices. The goal is for billions of internet driven devices to be able to exchange currency as well as data.
On April 29, co-founder Dominik Schiener tweeted that IOTA reached 182 transactions per second (TPS). He indicated a public release is on the way and a next milestone of 1,000 TPS. As a reference, Bitcoin can handle around four transactions per second, Ripple is around 1,000, and Visa around 2,000. Another factor bringing IOTA into the spotlight is rumors of IOTA tokens being traded on public exchanges soon.
According to the project’s website, “The main innovation behind IOTA is the Tangle, a revolutionary new blockless distributed ledger which is scalable, lightweight and for the first time ever makes it possible to transfer value without any fees.”
This means IOTA is moving away from blockchain’s system of using miners (nodes that provide computing power) to create “blocks”, or the periodic list of latest transactions that is added to the end of the blockchain. With the IOTA Tangle, millions of nano payments can go through instantly from machine to machine (M2M) without human input. They would all be recorded in an open and distributed ledger hosted by the network of devices, and do so for free. A one million dollar transaction would be free, as would a transaction of one millionth of one cent.
People can still purchase and sell these coins like many other cryptocurrencies, and at the moment that's all these digital tokens can do, but that's not the point. A popular IoT prediction is how many billions of IoT devices there will be by 2020. By creating a system of services and payments for the IoT web, the IOTA team hopes to create a new M2M economy. One company's IoT structure can leverage the services or products of a different company's IoT structure without any human communication.