Wednesday, May 12, 2021
The digital transformation can not only mean great economic success for companies, but can also be the key to a resource-saving world of the future. But this is only possible if the technologies that drive it have the smallest possible ecological footprint. Just like IOTA.
First, a brief introduction: IOTA is a distributed ledger technology (DLT), i.e. a decentrally managed network in the form of a digital account book. It is a framework for cryptographic applications based on a directed acyclic graph (DAG). Its open-source technology makes IOTA independent and durable. In addition, DLT's architecture makes it highly transparent, fail-safe and tamper-proof, which means it is highly trustworthy for users.
But IOTA offers another key advantage over other DLTs, where a fee must be paid for each transaction regardless of its value: IOTA is completely free of charge. The absence of transaction fees makes certain use cases possible in the first place. Berlin DLT is already being used in real-life projects. In addition, 245 patents name IOTA.
The special consensus procedure, known in technical jargon as Micro-Proof-of-Work, means resource-saving transactions in seconds. This property makes IOTA ideal for microtransactions, for example in the world of the Internet of Things (IoT) or the Industrial Internet of Things (IIoT). Thus, DLT fulfils all the prerequisites for future-oriented projects with a minimal ecological footprint.
This contrasts with other DLTs such as Ethereum 1 or the Bitcoin blockchain, whose immense energy requirements are anything but environmentally friendly. For example, at the beginning of 2021, the electricity consumption of the Bitcoin blockchain was far higher than that of the Netherlands - and the trend is rising. In-depth information on how IOTA differs from the Bitcoin blockchain and what real-world use cases the German DLT already enables is available in our whitepaper, which you can request here.
In his LinkedIn article, IOTA expert Tom Baumann states that a lightweight device to conduct an IOTA transaction consumes less than two hundredths of the energy of a 60-watt light bulb. Further, Tom Baumann illustrates IOTA's frugality in a comparison with bitcoin: for the power consumption of a single bitcoin transaction, more than 600 million transactions can be carried out on the IOTA side.
IOTA will be the first production-ready DLT network based on a fully decentralised, leaderless consensus protocol that is scalable, toll-free and secure. [...] All this will be achieved without requiring miners or wasting resources.IOTA Foundation
This statement is reinforced by the latest developments in the IOTA world, with which sustainable innovations can be realised even faster. The update 1.5, codenamed Chrysalis, released last week, opens a new chapter in the IOTA success story. Chrysalis is an important milestone on the way to IOTA 2.0, also called Coordicide.
Coordicide describes the state of a completely decentralised IOTA network, in which the IOTA Foundation removes the so-called coordinator that is currently still used as a control instance. The open source community has been working on this fundamental innovation for a long time. It is expected to go live before the end of this year.
With the release of IOTA Chrysalis, however, a new era has already dawned for the DLT hope from Germany: It enables completely new use cases and is enterprise-ready. Chrysalis also allows machine economy - interconnected, smart devices that participate in economic processes on their own - and thus paves the way for the future in terms of an ecological Internet-of-Things.