Beginners Guide IOTA: If you know little / nothing about IOTA, you should read this post.

Introduction:

If you don't know much about IOTA yet, I promise you that you can learn a lot within 25 minutes and you will be glad you invested them.

If you have never dealt with IOTA before, then this text might give you an exciting introduction. I myself have no connection to the IOTA Foundation (except that I am invested in MIOTA myself) and am writing this text solely to describe to you in a nutshell why IOTA is exceptional. Many of my ideas come directly from the homepage and other sources. I will also use some video clips that can explain some points better than I can. Additionally, I will also highlight all the points that I also currently still see as problematic and not just report on positive points. There is also a section that explains why right now is an exciting time for IOTA. (I'm really not trying to sound like someone who makes empty promises and just wants to sell an idea. Please see for yourself when you read)

I am not a native speaker, but I will try my best. Please don't be too harsh. It took me longer to write this post than I am willing to admit.

Of course, I would like to point out once again that this is not about investment advice, but is only intended to provide education.

Overview

These are the sections that make up my post:

• The three big promises

• Real world use cases

• The technology

• Solving the Blockchain-Trilemma

• Transparency, professionalism and communication

• Partnerships

• Tokenomics

• Roadmap - What lies ahead

• History and why IOTA has not gone through the roof so far

• Further information

The three big promises

To understand what makes IOTA special we need to start with three points that the technology promises to deliver. Over the course of this post, I will go into each of these points in detail. So please believe them first and let me convince you as the post progresses. Please keep the points in mind as you read and consider how they differ from other blockchain technologies.

Feeless, scalable, secure

• Feeless: IOTA can be used with 0 (!) mining or network fees.

• Scalable: In contrast to second-wave blockchains, Iota becomes faster according to the number of participants using it.

• Secure: No crypto product makes sense without the certainty that the network is secure.

Real world use cases:

First of all, before the technology or the background, I would like to talk about possible use cases. I am deeply convinced that a technology that can solve real world problems and create opportunities that did not exist before is the most important thing that will define the entire crypto bubble and what will ultimately determine which cryptos will be successful in the long and medium term. So from my point of view the use cases are the most important thing to know.

The core idea behind IOTA is machine-to-machine communication and payment. You can think of it as a communication protocol like TCP/IP for the WWW.

The IOTA-Foundation (IF) sees seven possible core industries and explains them further on their homepage https://www.iota.org/solutions/industries

• Mobility & Automotive
• Global Trade & Supply Chains
• Industrial IoT
• EHealth
• Smart Cities
• Customs and Border Management
• Digital Identity

Please check out this video to get some inspiration. I am sure many points are known by you, but please pay some attention to detail. The most important thing to think about is the scale of billions of devices and the need for beeing feeless for this to work.

IOTA is the only protocol that exists today that actually allows this to work.

If you know another one, please tell me. (Could be a good investment opportunity. LOL)

Even if its old (2018), I think it is pretty good: https://www.youtube.com/watch?v=0KDRc23Vj7w&t=1036s

I really like the example from the video about one car paying another to drive in its slipstream to save energy. Imagine what small units we are talking about here. They are tiny and such a trade would make no sense at all if there were even minimal network fees. For this concept to work, the trade must be feeless. But this only shows a very small part. A completely different use case is also being used in the pandemic: https://iottechnews.com/news/2021/jan/11/frankfurt-airport-using-iota-verify-covid-19-test-results/

Or that progressive cities are already relying on IOTA for their smart cities of the future: https://www.ccn.com/taiwan-smart-city-turns-to-iotas-dlt/

The problem with talking about the use cases now is that at the beginning of the 1990s no one could foresee what would be possible on the web. And we are currently at the same point with technologies like IOTA.

The technologie:

It might come as a shocker to you but IOTA is not based on the 2nd wave BlockChain technologie like Etherium and others are. The technologie used is named tangle. This solves many problems the classical Blockchains (with its literal chain of blocks) have.

You all know how to imagine a schematic blockchain. To put a picture in your head of what a Tangle looks like I would like to use the following: https://www.iota-wiki.com/bilder/iota-tangle-konsens-1.png

A short explanation video (from 2017) about this can be found here: https://www.youtube.com/watch?v=CZxH1V_zoug

Of course, it is possible to go into much more detail here. If the demand for it is there, I would perhaps make a separate post and explain it in detail.

Solving the Blockchain-Trilemma:

Probably most of you know what the blockchain trilemma is. If you are familiar with the topic, you can skip this point or read it as a quick refresher.

The blockchain trilemma is the problem that traditional blockchain solutions are not able to fulfill all three needs: Scalability, Security, Decentralization.

Let's take Bitcoin as an example. Bitcoin is extremely secure (no double spending event has ever been proven, no manipulation of transactions has ever been detected) and very decentralized (although of course this is decreasing due to the increasing centralization of hashing power). But because only one block is mined every 10 minutes, Bitcoin is not scalable at all. Bitcoin will never be able to be used across the board. The technology is simply not designed for that. Transaction fees will continue to rise in the future.

Ripple is another example that is secure and scalable, but not decentralized.

However, it will be different with IOTA. IOTA technology promises to cover all three of these points. This is possible because it is not based on a classic blockchain, but on the Tangle. Because the whole network does not always have to confirm transactions, there is incredible scalability. Because the participants to confirm a transaction are randomly selected (from billions of devices in the future), there is still security. And after the coordinator is switched off in the course of the year, the system is also 100% decentralized. A greater decentralization can never be achieved by the fact that there are no server farms that provide their hasching power even in theory.

Here's a graphic on the blockchain trilemma: https://merehead.com/blog/wp-content/uploads/2-85.png

Transparency, professionalism and communication:

For me, this is one of the key points that once again shows a lot of positive things about the IOTA Foundation. The professionalism, transparency and communication is outstanding. The best that I know about all crypto projects.

• The complete (!) IOTA project is open source and can be viewed by anyone on GitHub at any time. (https://github.com/iotaledger)
• There is a weekly AMA session with one of the co-founders (Dominik Schiener) in which he answers questions from the IOTA community. (Questions can be submitted here: https://np.reddit.com/r/Iota/comments/mcelvv/wednesdays_ama_with_dominik_schiener_31032021/)
• There are regular coding sessions with the developers as livestream on youtube.
• The IF permanently uses several professional external auditors who review the code.
• The homepage that shows the vision, roadmap, partnerships and much more is clear and easy to understand for everyone. An absolute must to have a look around. The roadmap is updated regularly.
• Via the IOTA Discord (https://discord.iota.org/) you can get in contact with the responsible persons and developers.
• IF is headquartered in Berlin, Germany. One of the most heavily regulated countries in the world.
• IF has over 160 employees, from developers to the HR department.

Partnerships:

This is another area where IOTA shines and is in a fantastic position.

Be it still very fresh, new partnerships such as with * DELL (https://blog.iota.org/together-iota-and-dell-technologies-demonstrate-project-alvarium/) or older, but no less promising ones such as with industrial giants like

• Volkswagen (https://blocktelegraph.io/drivers-and-autonomous-vehicle-to-get-help-from-volkswagen-iota-partnership/) or

• Bosch (https://www.bosch-connectivity.com/newsroom/blog/xdk2mam/).

IOTA is already established in the industry and is eagerly awaited. The three examples mentioned are only a small excerpt. Further information can be found on the homepage (https://www.iota.org/solutions/partnerships).

Tokenomics:

You may have noticed that IOTA's token has a protruding M, so it's called MIOTA. The M stands for mega, i.e. millions, as in the case of hard disk space, for example. So you would buy IOTA in units of millions. Since this is possibly somewhat confusing for someone new here a diagram:

https://coincodex.com/en/resources/images//admin/news/what-is-iota-tokeno/iota_infograph.jpg

IOTA's token needs to be small enough to perform the microtransactions I mentioned earlier. There is no smaller unit than an IOTA, as an equivalent to the Satoshi in Bitcoin.

All IOTA tokens have already been generated and no new ones will be added. So Iota is not inflationary.

Otherwise I don't want to bore you with the details that you can look up quickly anyway, such as the market capitalization etc.

Roadmap - What lies ahead:

The reason why I am writing this post and why now is an exciting time for IOTA is the upgrade to IOTA 1.5 (Codename chrysalis) which will take place from April 21st to April 28th. So in about 4 weeks. This was on the timeline for quite some time, but it was just recently announced to work as planned. I won't go into too much detail because I couldn't describe it better than the IF's blog post anyway. So if you're more interested in what chrysalis adds, please click here: https://blog.iota.org/iota-chrysalis-a-new-dawn/

At the same time, the IF also released a new native wallet. It bears the name firefly and can already be downloaded from the official homepage in the beta.

This is the biggest upgrade in the history of IOTA and the first extremely important step towards the completely decentralized IOTA 2.0.

IOTA 2.0 is primarily used to describe the deactivation of the coordinator. This is also planned for this year. But this means at the same time that IOTA is a centralised network until now (might be a problem for a few of you, but as mentioned this will change)

But many other exciting developments such as smart contracts or sharding are also on the agenda. It is important to understand that with IOTA 1.5 a status will be achieved with which industrial companies will begin to deal with their use cases. That is the actual starting signal.

Otherwise, take a look at the timeline on the homepage and see for yourself what the next steps are: https://roadmap.iota.org/

History and why IOTA has not gone through the roof so far:

If everything is as fantastic as I write it, why has IOTA not yet conquered the world? From my point of view, there are various hard and soft points for this.

• A little over a year ago, the Trinity wallet was hacked. This takes place through a back door in the software of a third party (moon pay) and has led to seeds being passed on to criminals. This hack obviously destroyed a lot of trust. For more information, take a look at a short excerpt from this video: https://www.youtube.com/watch?v=hwKTLs2spcQ&t=77s

• So far, the IF has not advocated an increase in MIOTA's market capitalization, as an operational technology should first be created. This will be done with IOTA 1.5.

• In order to be quantum safe, IOTA has currently not used any reusable addresses. This is one of the main reasons why various exchanges have not listed IOTA. This is now changing with IOTA 1.5. A co-founder announced in the new AMA that IOTA will be listed on more exchanges soon (https://www.youtube.com/watch?v=2ku0pTaTNTA&t=1643s)

Maybe we could gather some more in the comments.

Further information:

• The IF's official youtube channel is great. Here you could hear all the recordings of the AMA sessions, the talks and much more. https://www.youtube.com/channel/UClxDa0qkOqxIguokXPhnuOA

• There are two subreddits for IOTA. One for discussing the technologie (IOTA) and one for the Token investors (IOTAmarkets)