You’ve probably heard of the IOTA protocol. It has seen a huge boom in popularity recently and describes itself as ‘the next generation of distributed ledger technology’.
The platform aims to leverage blockchain technology in order to redefine trust, value, and ownership. So far, it seems to have gone from strength to strength.
However, it could be about to face some stiff competition from a new rival...
Introducing ‘IOTW’ - What is It?
IOTW is a global blockchain transaction ecosystem for IoT devices. Its purpose is to accommodate the entire value chain of electrical appliances, and ultimately to bring blockchain technology within reach of the average household.
IOTW is a cryptocurrency designed for IoT purchase, supply chain and after-sales services and transactions.
Most cryptocurrencies use one of two types of mining protocols: Proof of Work (PoW) - used by cryptocurrencies such as Bitcoin - or Proof of Stake (PoS) - used by cryptocurrencies like that of Dash.
IOTW, on the other hand, uses a protocol known as Proof of Assignment (PoA). This is a patented algorithm with a very simple architecture that works a little differently to the other two. To put it simply, it means that more mining nodes there are, the more the users get paid.
Both the computational power and the power consumption for this protocol are significantly lower than both the PoW and PoS protocol, and the transaction time is less than one second.
As a result, ordinary electrical appliances will be able to mine IOTW coins without significantly increasing their electricity usage.
Therefore, the cost for this will be significantly lower than if traditional mining activities were used, as electricity bills will be lower, and there will also be no need for expensive processors.
What Actually is IOTA, and How Does It Work?
IOTA is a cryptocurrency that has witnessed a surge in popularity over the past year or so. It is unique due to the fact that it does not use a blockchain. Instead, it uses a system known as ‘Tangle’.
IOTA has many notable differences from the blockchain - and many similarities, too.
The main difference between IOTA’s Tangle and the blockchain is that the blockchain is a linked list, whereas Tangle is a Directed Acrylic Graph (DAG).
Unlike the blockchain, Tangle has no transaction fees. Instead, users must simply allow their wallet program to process and confirm two other transactions whenever they conduct their own transaction, as a means of paying for it.
To put it simply, this structure parallelizes transaction issuance and validation, resulting in a significantly higher transaction throughput.
This reduces the problem of the blockchain bottleneck where more activity produces the same validation - the major reason why the blockchain is so slow and costly - and increases scalability, ultimately meaning that more activity will result in more validation.
The creators of IOTA have designed it specifically as a solution for machine-to-machine transactions in an IoT environment.
What Are the Drawbacks of IOTA?
In addition, the network relies on a closed-source coordinator to protect it from threats. It has had to be shut off several times due to attacks, rendering it unusable, and leading to significant periods of downtime.
Some people have even stated that the IOTA community is ‘toxic’ and should be avoided, due to the fact that any kind of criticism on the network is “met with coordinated brigading”.
While IOTA created a ‘decentralized’ network that is not on the blockchain, IOTW has managed to create a better, faster, and greener product whilst still using an actual blockchain.
Could IOTW Surpass IOTA?
The biggest advantage that IOTA has over IOTW is that it has been around for a significantly longer period of time, and is far more well known.
However, despite it still being early days, IOTW seems to have some notable advantages over IOTA.
Unlike IOTA, which many believe to be a centralized network, IOTW runs on a blockchain decentralized database. In addition, IOTW has no additional hardware costs.
Finally, whilst the use cases and applications of IOTA are currently limited, IOTW will be able to be used in all normal consumer and industrial IoT devices.
It could take a while for IOTW to gain traction, but in the future, it is likely there will be no surprise if the platform becomes equally popular - if not more than - as IOTA is today.