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IOTA, Crypto-currency

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IOTA, the Ultimate Crypto?

This is part three of my short series of articles on crypto-currencies.
I could run through a whole list of interesting tokens such as Stella Lumens, Selfkey and the like, but buying these is very much a lottery. Which ones will go on to be household names? I haven't a clue, and neither has anyone else. I bought Stella Lumens because it was backed by IBM, which seemed as good a reason as any. Also, it was effectively a bank share, and was first issued at the price of one cent. I assumed it couldn't go bankrupt, and if it only went to two cents I would double my money, which seemed a fair bet. I won't annoy you by telling you what the current price is.
There is another token which is currently at one cent. I may bung a few pennies into that, but I don't think it has the potential of Stella.
Fortunately there is one crypto-currency that is different from all the rest. Let me introduce you to it. This will end up sounding like a recommendation to buy, which wasn't my original intention, but all I can say is that if any crypto is going places, then this one jolly well ought to.
5G is being rolled out as we speak. Early next year the first handsets will be in the shops, and that is going to kick the bandwidth available right through the roof. That will give you much better broadband, but that isn't really the point. The real bonus is that it will usher in the Internet of Things (IoT).
This is a technology where everything that can be automated will be connected. Self driving cars, your fridge, traffic lights, and so on will all be connected.
Let me quote you something from the company that is currently at the head of this technology.
The number of connected devices that will be in use is estimated to reach 75 billion by 2025. From tiny sensors on roads and bridges to wearable electronics, mobile phones, and more, every day the world is becoming more and more interconnected. The amount of data being produced and consumed by all these devices is already astronomical. By the end of 2016, the run rate of IP traffic was 1.2 zettabytes per year - or enough data to fill over 9 billion of the highest storage capacity iPhones available at the time. Over the next five years, global IP traffic is expected to increase five-fold where by 2021, monthly IP traffic will reach a staggering 31 Gigabytes per capita.
The global data pipelines are becoming congested. It will not be possible for all these devices to continuously connect to centralized cloud silos for all the data they will produce, nor will it be possible for analytic engines in these clouds to respond back to the actuators to act on the data in real time.
This is where ‘Fog’ and ‘Mist’ computing, storage, bandwidth, electricity enters
 the picture. One has to distribute these resources all across the landscape, which immediately brings up the question of how to do this in practice with all the red tape in place when there are 10s, 100s or even 1000s of stakeholders involved in this new Machine Economy.
This conundrum was the cause of the inception of IOTA. Through zero fee transactions, these devices can share these technological resources amongst one another in real time locally in a distributed network, thus avoiding the centralized points of failure, unclogging the resource infrastructure and abide by the laws of physics.
Somewhere in that quote is today's magic word IOTA.
IOTA is a third generation crypto. It operates on what is called a DAG, a directed acyclic graph. Never mind how that works, this isn't a maths lesson. What you need to know is what it can do, and what it costs, and just how useful it is going to be.
Here is just a small bit about a DAG taken from the IOTA White Paper. I hope it helps.
Instead of the global blockchain, there is a DAG that we call the tangle. The transactions issued 
by nodes constitute the site set of the tangle graph, which is the ledger for storing transactions. The edge set of the tangle is obtained in the following way: when a new transaction arrives, it must approve two previous transactions. These approvals are represented by directed edges, as shown in Figure 12. If there is not a directed edge between transaction A and transaction B, but there is a directed path of length at least two from A to B, we say that A indirectly approves B.
Alright, so much for a brief bit of technical language, now let's get on to more understandable matters. First: IOTA is free to use. Most of the transactions these IoT devices send will be data or very small value payments.
At time of writing, the average fee on a bitcoin transaction is $6, and the average fee on an Ethereum transaction is $0.21.
If your IoT device is making micro transactions for $0.00001 per time, any fee, no matter how small, is going to massively effect its cost and its economic model. This is why carmakers such as Volkswagen and Jaguar Land Rover chose to work with IOTA.
Driverless cars will be able to pick up and report traffic congestion, accidents, potholes in the road, and anything else required. They will be able to automatically pay motorway fees, parking fees and so on, and these small payments will be made across a free network.
The really big issue here is that this system is streets ahead of any other token technology. Quite frankly if this all works as expected then I have to wonder what all the other tokens are going to be used for. They really won't have much value.
I recently read an interesting article on smart contracts for insurance policies. These will put nine-tenths of the world underwriters out of work, and make insurance much cheaper, and payouts could be instant, but one thing these smart contracts need is a method to check whether a clause in the contract has indeed been triggered. In order to do that the contract will search oracles for the data needed to confirm or deny whether such a term has been triggered.
An oracle is a system that gathers information from various sources, and checks it. IOTA is in an ideal position to be the oracle of oracles. With it being used to connect the cities, motorways, and businesses of the future (and by the future, I am talking about an adoption over the course of the next five years) then IOTA is going to be the go-to oracle.
In September 2018, Fujitsu announced IOTA will be the “new protocol standard” in its supply chain and audit trails. Basically that means Fujitsu will be using IOTA to make its manufacturing processes more efficient and easier to audit.
If IOTA does become the “new protocol standard” of manufacture, as Fujitsu seems to be banking on, this will lead to a massive adoption of IOTA.
Fujitsu is the leading Japanese information and communication technology (ICT) company, and the world’s fifth largest IT services provider.
So now IOTA has Bosch, Volkswagen and Fujitsu using it in their processes. Each of these companies is a titan in its respective industry, and they are all backing – and more importantly using – IOTA.
Now, unlike blockchains, IOTA encourages all dApps to build on its platform to use the IOTA network itself. Not to create their own new tokens.
This means that more information is sent through the IOTA network, which both speeds it up and brings more value to it.
Sending transactions on the IOTA network is free. But the tokens are not free to buy. They are sold on exchanges, just like any other crypto. So if companies want to use the network, then need to buy IOTA tokens. This is a very strong value proposition for its tokens.
This is a ridiculously short intrloduction to the subject. I could write a book about this, and it would make fascinating reading, even if most people thought it science fiction, but in amongst my other activities I simply don't have the time to write such a book. But if this short article whets your appetite and encourages you to do a spot of research, then it will have served its purpose.
Even if you don't want to invest in this token I would suggest you read as much as you can about what this system can do. If nothing else, it will provide you with a very interesting window on the world that is maybe less than five years away. It exists right now, and adoption is growing, but not all the parts are yet in place. For instance, if you want the IoT and smart highways and smart cities then you need 5G. That is probably less than a year away. All the other parts are being put in place right now. The next decade is going to change the world. I am investing in the technology that is going to make that new world function, because that's where the money is.

<<<<< Part 2

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