IOTA video notes - What is it? How does it work? Invest Yes or No?

 IOTA:
I talk about
- WHAT IOTA is
- WHY it is so interesting
- HOW it works and whether you should invest in it or not. 

These are just my cliff-notes for my IOTA video on YouTube.

German: https://www.youtube.com/watch?v=8pMr8iP0zmM

English:  coming soon

Official Websites: https://iota.org/

Whitepaper: https://iota.org/IOTA_Whitepaper.pdf 

Check out Slack for info! https://ten-x.herokuapp.com/

Talk about problem first: SCALABILITY OF TRANSACTIONS!  

• • Connect Internet of Things (Explain what it is!) will have billions of things and will need many Micro- and Nanopayments (will explain in separate video!)
• • BTC: ca 6/sec (Lightning Network & Larger Block size will help) also COMIT!
• • ETH: ca 15/sec (PoS will increase that though)
• • most blockchains can’t handle the scalability problem

WHAT IS ITOA?  

•  IOTA seems like a 3rd generation decentralized ledger (after Bitcoin and Ethereum) trying to solve that. So far: great idea - no application yet - purely speculative.

HOW DOES IT WORK?  

•  Tangle - open source distributed ledger - no fees, no blocks
•  no difference between user und validator (miner)
• • data structure is a graph, not a blockchain
• • graph: objects connected by vertices
• • objects are transactions
• • in order to create transaction you have to validate 2 other Tx
• • arrows point towards confirmed Tx
• • no blockchain - no blocks and no chain
• • direct and indirect confirmations
• • tangle is more regional - not everyone checking everyone! Example of shared work: not everyone doing everything, but trusting others until they confirm.
• • The more arrows to a Tx, the more confirmations
• • Tangle is the revolutionary part of IOTA
• • Slack: find neighbours etc - be careful of scams!
• ¥ Tips: transactions which have no other transactions referencing them.

ADDRESSES:  

• • Seed: String consisting only of uppercase latin letters and 9's which is used to access an account. A seed is like a private key/password. Keep it secure and don't share it with anyone. If someone has access to your seed they can access your account.
• • Consisting of 81-chars, only latin letters and 9's
• • Quantum resistant cryptography: Winternitz Signature instead of ECC
• • https://eprint.iacr.org/2011/191.pdf

Nonces are NOT for PoW - it is for spam protection! Spam protection:  

1. 1. fees (ripple)
2. 2. limit (bitcoin)
3. 3. work (iota)

• • consensus is part of TenX mechanism - no fees (TenX fees are for consensus from Miners)
• • Miner vs. User

• • Nodes have “weight”: the more the deeper the more confirmed
• • Depth = Time
• • Weight = confirmations
• • Height = distance from Genesis TenX
• • Score: how much have you verified (directly and indirectly) - the higher the better

WHEN IS IT TOO LARGE? Snapshots are being made - coordinators! https://pastebin.com/NdQjLWbK
TECH:  

• • Javascript & Python - that’s good
• • Go, Rust, C++ too… that’s all good!

WHAT ARE THE TECH CHALLENGES:  

• • system for NO lazy notes (only certain amount is considered new and ok - f.e. 50%)
• • Confirmation takes a few hours on a phone - less than a minute on a good computer – better to outsource? Fees could come in there!
• • Scalability - coordinator right now - should be switched off at some time – should “snapshots” be totally decentralized?
• • high load vs. low load to keep load low! Goal: keep tips low

• ¥ ATTACKS!

WALLETS / EXCHANGES:  

• • https://github.com/iotaledger/wallet/releases
• • Initial trading on Slack
• • Today on bitfinex - why no other exchanges? 
• • New tech! Liquidity squeeze - helps price! 

• • No inflation! Huge amount - MIOTA = million!
• • 1 MIOTA has 1,000,000 iotas
• • Why is the price that high? Well, think of how many Satoshis there are!
• • miota = million

PARTNERS:  

• • Healthcare , Microsoft, Refugee non-profit, trusted IoT alliance - many other companies:
• • https://azure.microsoft.com/en-gb/blog/azure-blockchain-update-5/
• • https://www.cryptocoinsnews.com/iota-spearheads-dlt-research-in-norway/
• • https://www.cryptocoinsnews.com/iota-foundation-enters-historic-partnership-with-refugee-nonprofit/

OUTLOOK:  

1. 1. TX mostly (micro etc. cause no fees)
2. 2. oracles in the future
3. 3. smart contracts in the future

This simple rule leads to:
the more people use IOTA, the more transactions get referenced and confirmed

Economic Problems:  

• ¥ Will it actually work?
• ¥ Will hardware integrate this system? Big challenge.

INVEST - Yes or No? relatively low volume for it’s size (1 billion vs. 10 million cap) & billion dollar market cap… be careful
Users? 0 Businesses? 0 Devices? 0 

I put some money into it - it is risky, but I like when companies push tech forward.