Is IOTA Tangle Actually Worth The Price? (review part I.)

Our main goals are:

-check the price
-check whitepaper
-check the team
-check the technology
-check GITHUB

We need to find the current price of IOTA. We visit Coinmarketcap. IOTA is currently ranked in the 10th place and it is estimated to be worth around 5 billion USD in market cap. Current prize is $ 1,72.

IOTA has 2,8 billion coins in circulation but Bitcoin only has 16,9 million coins at the moment in circulation. We visit Onchainfx.com for a better understanding of the price. We will search and use the filter “Price if BTC-Normalizes Supply“.

This allows us to compare the prize on the assumption that IOTA has the same supply as Bitcoin.

At the same supply Bitcoin is worth 30 times more than IOTA ($9,682.45 vs $284.58). IOTA has enormous growth potential.

We need to find whitepaper so we turn to their official website iota.org. Very attractive at first glance. Probably a good sign right? IOTA is described as the backbone of the “internet of things”.

“IOTA enables companies to explore new business-2-business models by making every technological resource a potential service to be traded on an open market in real time, with no fees”

The whitepaper is essentially called The Tangle and its author is Serguei Popov. We need to perform google research about him and other important team members. With a little effort we find the right Serguei Popov. He is a well known and respected mathematician. We also find that:

“Most important team members of the Foundation are David Sønstebø (IOTA founder), Dominik Schiener, Serguei Popov (Mthcl) and Sergey Ivancheglo (Come-from-Beyond). “

David Sønstebø – //www.youtube.com/watch?v=GwhJQ67zxbg

Dominik Schiener

and Sergey Ivancheglo as the founder of NXT among other things.

In my opinion the team members are competent. There is a lot of data on them feel free to check out.

Let’s go back to the whitepaper. Popov essentially describes how Tangle works and how it differs from the blockchain. IOTA does not use blockchain technology but uses a directed acyclic graph (DAG) instead. His explanation why this is the case:

“The rise and success of Bitcoin during the last six years proved that blockchain technology has real-world value. However, this technology also has a number of drawbacks that prevent it from being used as a generic platform for cryptocurrencies across the globe. One notable drawback is the concept of a transaction fee for transactions of any value.“

Blockchain has problems with scaling. With number of users increasing blockchain is becoming slower, while Tangle supposed to be getting faster and more reliable. Since IOTA is intended to transfer data between things, at a global level, it must be be able to transfer huge amounts of data instantly. It was logical for IOTA to look for a solution outside the blockchain. E.g. Bitcoin can only manage 5 transactions per second, Visa 2000 TPS+, IOTA wishes to achieve 1 million TPS .

The Tangle or DAG meets all the conditions that blockchain offers but allows greater transaction output because of different nodes distribution.

As we can see on the picture it is decentralized and transactions only takes place in one direction. That means it has no loops. We can also see that every node receiving a transaction is obliged to confirm two other transactions. For that reason IOTA does not need miners and therefore has NO FEES.

Unlike the blockchain, Tangle (DAG) is resistant to attacks by quantum computers. Although quantum computers are not as powerful at this time they will pose a great danger in the future.

One place we should always keep an eye on is Github. Even if you are not a programmer yourself, you can still focus on updates, issues and commitment of developers.

Main repositories are frequently updated. We should take notice that people are having problems with wallet. If we look how often the code is added or deleted we can see a huge increase of activity over the past month.

EPILOGUE

IOTA has a lot of growth potential. It is a very ambitious project and presents serious threat to a classic blockchain. They are still in early phase of its existence but the team standing behind IOTA looks very legit. If they manage to succeed they will be really huge, I consider them top 3 market cap candidate. We are going to focus on specific problems and critiques that IOTA is facing in part II….