Project IOTA was founded in 2015 by David Sønstebø, Sergey Ivancheglo, Dominik гSchiener and PhD in Mathematics Sergey Popov. Design goal was to review and develop blockchain technology for applicability of cryptocurrencies in the Internet of things (IoT).

IoT is the concept of network of physical devices framed with technologies to interconnect with each other and with external environment excluding human involvement from a number of operations. Calculations through that process need a fast and cheap network. Existing projects based on blockchain have two main disadvantages preventing their implementation into IoT:

• Low efficiency, especially when it relates to creating a global network of the IoT, the transaction rate must be 2-3 times higher than now.
• Transaction fees make those micro transaction mostly used in the IoT unprofitable.

IOTA creates a network without any disadvantages. IOTA transactions are free regardless their size, transaction confirmation period is insignificant (depends on network size, see section «Performance and scalability»), number of simultaneously processed transactions is unlimited, and the system itself can be easily scaled. All this is achieved through using a directed acyclic graph (DAG) instead of blockchain.

All IOTA tokens were created in a genesis block, in total there are (333-1)/2 tokens (around 2.78 quadrillions). This amount is contingent on the idea that tokens will be used for micro transactions, besides this number lines up with the number MAX_SAFE_INTEGER in Javascript.

The smallest unit in IOTA is iota, named after the smallest letter of the Greek alphabet. It doesn’t have decimal points. Names of larger units are made by adding numeric prefixes same as in metric system to the word Iota. Thus, one million iota is called Megaiota or Miota (Mi), which is also considered to be the basic unit of iota used for trading at cryptocurrencies exchanges. Names are given below as they increase:

Iota = 1 Iota =1i =1i

Kiloiota =1Kiota =1Ki =1’000i

Megaiota= 1 Miota = 1 Mi = 1’000’000 i

Gigaiota = 1 Giota = 1 Gi = 1’000’000’000 i

Teraiota = 1 Tiota = 1 Ti = 1’000’000’000’000 i

Petaiota = 1 Piota = 1 Pi = 1’000’000’000’000’000 i

In 2015 IOTA held an ICO and collected 1337 BTC. During the ICO all tokens were sold. Nothing was reserved for the team, fund or else. Development of the project was financed with the funds collected through the ICO.

In classical blockchain verification is completely separated from users so it is necessary to pay for transaction verifications to miners or stakeholders. In IOTA there is no separation, it is a fully self-sustaining network, there are no miners, and users confirm transaction of other users by themselves.

Therefore instead of a traditional blockchain IOTA uses DAG, directed acyclic graph, that is called Tangle:

The DAG network consists of transactions. Each new transaction approves the previous two and those approvals are represented by directed arrows (time goes from left to right). Should there be the path between A and B greater than at least two arrows, then A indirectly approves B.

Nodes check lack of conflicts and do not approve (directly or indirectly) any conflicting transactions. The idea is that as a transaction gets more direct and indirect approvals, its acceptance by the system grows. It means that in case of multiple approvals double-spends become almost impossible. For that purpose we use the concept of weight and cumulative weight of the transaction. Weight of transaction is proportional to the amount of work the node invested in it. In practice, the weight can only be values 3n where n is a positive integer that belongs to some nonempty interval of acceptable values. Cumulative weight of a transaction is its own weight plus the sum of the weights of all transactions by which it is approved either directly or indirectly.

Weight calculation:

Small numbers in SE corners (transactions) denote the weights of transactions and (large) bold numbers denote cumulative weights. For instance, transaction F is approved, directly or indirectly, by transactions A, B, C, E. Cumulative weight of F is 9 = 3 + 1 + 3 + 1 + 1, addition of the weight of F and the weights of A, B, C, E. In the top picture the only unapproved transactions are A and C. When a new transaction X arrives and approves A and C, it becomes the only tip. Cumulative weight of other transactions increases by 3 (weight of X).

In order to confirm transaction the node performs as follows:

1. Selects two other transactions according to an algorithm .
2. Checks if those two transactions are not in conflict. And it does not confirm conflicting transactions.
3. To issue a valid transaction, a node must solve a cryptographic puzzle (that might require calculations). For instance, it needs to enter a nonce, the hash of that nonce together with certain data from the approved transactions has a particular form, for example, has at least some fixed number of zeros in front).

The main rule used by nodes to decide between two conflicting transactions is the following: a node runs the tip  selection algorithm many times and sees which of the two transactions is more likely to be (indirectly) approved by the selected tip. For instance, is a transaction is selected 97 times during 100 runs of the tip selection algorithm, we say that it is confirmed with 97% confidence. IOTA White Paper gives more details about the algorithm.

IOTA system is based on Directed Acyclic Graph (DAG) called Tangle.

IOTA uses Winternitz hash-based cryptographic signatures instead of elliptic curve cryptography, ECC. Hash-based signatures are way faster than ECC.

In order to prevent maintaining the whole Tangle (as in blockchain) IOTA uses Snapshot. Snapshots prevent DAG weight increase, save all balances and prune old history and transactions. Addresses and balances in snapshot operate as genesis without any previous data. Full nodes keep information about transactions, they can decide on their own whether to keep the full version (if technically possible) or to download a snapshot and keep on working with it. Anyway the node remains part of network.

As stated above, unlike blockchain, IOTA has no separation between users and validators. Each user initiating a transaction automatically becomes a validator for other two earlier transactions.

Modular approach aims to broaden functionality of the system. It means that each component represents an autonomous application optimised for its goal without ruining productivity or functionality of other applications.

Currently the following Iota eXtention Interface (IXI) modules exist at different levels of their ongoing development:

• IDoT (Identity of Things) allows to collect and store data about any device that belongs to the Internet of Things. It is necessary for effective indexing and ensuring predictive maintenance in the world of machine economy. IDoT is also crucial for securing safe connection with the world. When each device has its own identifier, it is possible to create reputation systems that are vital for anomaly and intrusion detection. If indicated that a device might spread malware, the neighbouring devices can quarantine it.
• Permanodes. IOTA uses «shanphots» to keep the size of the Tangle ledger database small. This is all that is necessary for the vast majority of settlement and data integrity use cases. However, there are certain applications that require the full raw data of the ledger to be kept and be accessible permanently. That is the role of Permanodes.
• Masked Authenticated Messaging (MAM) makes it possible for sensors and other devices to encrypt entire data streams and securely anchor them into IOTA Tangle in a quantum proof fashion. Only authorised parties will be allowed to read and recreate the entire data stream. Basically it reminds a radio a lot where only those with the right frequency can listen in, in MAM only those with the right channel IDs get access to the data.
• Private transactions secure confidentiality of the transactions. General transactions include metadata that reveal personal information, which is essential in certain cases of IoT use, thus a private transaction layer is in development.
• Oracle. This module can feed outside data, such as timestamps, into the IOTA network. It will also allow to ensure compatibility with other blockchain systems.
• Flash Network is aimed for rapid feeless payments, It will immediately make it possible to validate a large amount of  nano-transactions in the network. It will operate in parallel with Tangle.

DAG advantages

IOTA Tangle has solved the following blockchain problems:

• Control centralisation. For instance, in order to reduce the variation of the reward, miners form groups due to which the concentration of power (computational and political) goes to several pool operators, and allows them to perform a wide range of filters and postponements with regard to certain transactions. Although there are no acknowledged cases of misuse of power by pool operators, there were situations when such an opportunity arrived.
• «Obsolete» cryptography. Although giant quantum computers still do not exist, future oriented companies have already made initial steps towards quantum resistant cryptography. From a security standpoint it makes sense to assume that certain equipment capable to break in classic encryption algorithms might appear in the near future thus the only way of protection is to get prepared to it.
• Inability to effect micropayments. Transaction fees are used to cover miners expenses (or reward consensus nodes) and to prevent spam-attacks. They also set the minimum payment amount below which money transfers get to be no longer expedient.
• Lack of tolerance to partition. Blockchain based currencies cannot survive long-term network partitioning, since it may lead to large number of cancellations of transactions. Also it is impossible to initiate an intentional partitioning when it is necessary.
• Discrimination of participants. Current cryptocurrencies are heterogeneous systems with a clear separation of roles (transaction issuers; transaction validators). Such systems inevitably lead to discrimination of some elements thereof  which in turn leads to conflicts and force other elements to spend their resources on conflict resolution.
• Scalability limits. Some cryptocurrencies have strict limits relating to maximum transaction speed, and those limits cannot be removed through decentralisation.
• High requirements for hardware. Cryptocurrencies, similar to bitcoin, use script-based approach to implement different users scripts. Other currencies use an approach, similar to the one bank use, however they add some features to it. Both these approaches increase the requirements for hardware due to complex logic of transaction processing.
• Unlimited data growth. Storing all transactions leads to a rapid growth of data. This inefficiency cannot be removed even through data pruning technique, so high popularity of currency may lead to its collapse.             

Risks

Theoretically a situation could arise where in case of low level of activities in the system new transactions would so rarely appear, that a transaction would be pending for validation for a  very long time. The validation might never happen, should new transactions fail to appear in the system.

In order to ensure development of the system and to protect it against certain attacks, IOTA uses a «Coordinator» (special address) that checks transactions before their validation by the main net. Once every minute (on the main net) Coordinator issues milestones which reference valid transactions. Developers say that as soon as the network is large enough the Coordinator will be removed from there. Shortcomings related to the presence of Coordinator:

• The Coordinator is centralised and administered by IOTA Fund.
• The code of the Coordinator is not an open source, so the community is unable to evaluate its quality and accuracy of work.
• There is no fixed date to shut down the Coordinator.

On 26 September 2017 Nick Johnson, Ethereum Foundation developer, expressed his opinion about critical issues with IOTA:

• Ternary. The IOTA authors have various arguments as to why they made this decision, but they come down to two main ones: ternary processors are theoretically more efficient than binary processors; certain mathematical constructs are more cleanly represented in balanced ternary (balanced: -1; 0; 1, unbalanced: 0; 1; 2). But IOTA is built to run on existing hardware, which is exclusively binary, as are the communication networks it uses. As a result, all of its internal ternary notation (trits) has to be encapsulated in binary, resulting in significant storage and computational overhead. All theoretical benefits of a balanced ternary notation, such as not needing a sign bit, are more than outweighed by the practical disadvantages, since every processor Iota will run on is already equipped to perform math on twos-complement numbers, but requires software emulation to operate on balanced ternary.
• Cryptography. The choice of numeral system requires to reinvent basic operations such as cryptographic hashing, this violates rule 1 of cryptography: don’t roll your own crypto. As a result of this approach a group of researches detected a number of significant vulnerabilities in IOTA’s hash function, Curl. IOTA’s authors argue that these flaws (collision resistance) are not material the Curl’s use, it’s only function is to ensure pre-image resistance. However, cryptographic attacks always get better, never worse. The first collision attacks against MD5 and SHA1 were what prompted the cryptographic community to start moving off those functions, even for applications where only pre-image resistance is required.

On 7 August 2017 Curl function was replaced with SHA-3 implementation, named Kerl, which allowed to eliminate that vulnerability. Detailed overview is given in «Protection from Attacks» section.

Protection from Attacks

White Paper of the project provides possible attack scenarios and ways of network protection.

Potential «large weight» attacks were highlighted: should an attacker succeed to lend to a transaction the weight that exceeds cumulative weight of a legitimate chain, it may lead to  double-spending. It can be a real threat to the entire network. As a solution it is considered to limit the own weight of a transaction from above.

In order to secure the network, the input flow of “honest” transactions should be large compared to the attacker’s computational power. This indicates the need for additional security measures (for instance, checkpoints) during the early days of IOTA. For that purpose, IOTA uses the Coordinator (special address) that checks transactions before their validation by the main net.

Besides, when choosing a strategy for deciding which one of two conflicting transactions is valid, one has to be careful when using cumulative weight as a decision metric. This is due to the fact that cumulative weight can be subject to a parasite chain attack.

The attacker secretly builds a subtangle sometimes references the main tangle to gain a higher score. To defend against this attack style, the idea is to use a MCMC (Markov Chain Monte Carlo) algorithm to select the two tips to reference. Why the MCMC selection algorithm will not select one of the attacker’s tips with high probability. The reasoning is identical to the lazy tip scenario: the sites on the parasite chain will have a cumulative weight that is much smaller than the sites that they reference on the main tangle.

Aviv Zohar suggested the following attack scheme against the proposed MCMC algorithm. In the high-load regime, an attacker can try to split the tangle into two branches and maintain the balance between them, in order to allow both branches to continue to grow. The attacker must place at least two conflicting transactions at the beginning of the split to prevent an honest node from effectively joining the branches by referencing them both simultaneously. Then, the attacker hopes that roughly half of the network would contribute to each branch so that they would be able to “compensate” for random fluctuations, even with a relatively small amount of personal computing power. If this technique works, the attacker would be able to spend the same funds on the two branches. To defend against such an attack, one needs to use a “sharp-threshold” rule (for example, to select the longest chain on the Bitcoin network) that makes it too hard to maintain the balance between the two branches. If an honest node permanently selects the branch with the largest weight, then the attacker would probably be unable to maintain the balance. Besides, the attacker’s task is very difficult because of network synchronisation issues: they may not be aware of a large number of recently issued transactions. Another effective method for defending against a splitting attack would be for a sufficiently powerful entity to instantaneously publish a large number of transactions (on one branch), thus rapidly changing the power balance and making it difficult for the attacker to deal with this change.

Resistance to quantum computations.

Capping the weight from above would effectively prevent a quantum computer attack as well. This is evident in iota because the number of nonces that one needs to check in order to find a suitable hash for issuing a transaction is not unreasonably large, around 38. The gain of efficiency for an “ideal” quantum computer would therefore be of order 34 = 81, which is already quite acceptable. Moreover, the algorithm used in the iota implementation is structured such that the time to find a nonce is not much larger than the time needed for other tasks that are necessary to issue a transaction. The latter part is much more resistant against quantum computing.

On 7 September 2017 MIT Digital Currency Initiative published IOTA code audit report. The report demonstrated vulnerabilities of core of cryptographic library IOTA, which allowed to destroy coins of any user and to get access to them.

The largest bug mentioned in the audit was detected in IOTA’s kernel hash partition. Relying on its competencies and rejecting the past decades of development of the SHA-256 encryption protocols (uses Bitcoin) or KECCAK-256 (the Ethereum core), the IOTA founders decided to go their own way and offered their own encryption protocol, which was called Curl. Curl was vulnerable to a well known technique for breaking hash functions called differential cryptanalysis. Using this observation, MIT specialists were able to write software that could quickly generate practical collisions for messages of the same lengths. Since these collisions fully collide with the internal state of the hash function, a single collision enables a hacker to generate an unbounded number of additional colliding messages. These collisions work for all rounds of Curl and can be generated in seconds on commodity hardware. Using 80 core computers, MIT group were able to find collisions within a few minutes, using a commodity computer it would take about an hour.

These security risk is not relevant any longer, since it was disclosed to IOTA team in the end of July as soon as it was detected, and by 07 September 2017 Curl function was replaced with SHA-3, that was called Kerl, which allowed to eliminate the vulnerability.

IOTA itself and all technologies related to it are administered by non-profit foundation IOTA. IOTA Foundation was established in Germany as non-profit organisation, that coordinates  and finances development of IOTA Ecosystem. Foundation’s goal is creation of a sustainable ecosystem around IOTA to accelerate its development and commercial deployment as an open-source technology. IOTA Foundation became the first fully regulated not-for-profit foundation in Germany, fully capitalised with cryptocurrencies. It includes the Board of Directors, Supervisory Board and Advisory Board. Under their administration there will be created working groups to support usage and to promote IOTA.

According to project representatives, Germany was chosen as the jurisdiction because it is one of the countries with the most stringent regulations and it considerably leads rule-making in digital technologies area both at national and the EU levels. It enables the IOTA Foundation to work closely  together with regulating authorities in order to assist formation of reasonable and effective strategies and their implementation.

Even though headquarters of IOTA Foundation are in Berlin, Germany, this global organisation also works in other 10 countries, including Israel, Brazil, Norway, Great Britain, USA, Taiwan and Singapore.

Project representatives consider legitimacy of the project to be an essential issue. So IOTA’s Public Regulatory Affairs team was created to work together with regulators around the globe.

There is no blockchain in IOTA architecture, it means there are no forks or interblock intervals, so there are no TPS limitations: users constantly send new transactions, trying to build them into Tangle, thus confirming previous transactions. IOTA network structure makes it possible to increase throughput in line with increase of users of the network. So IOTA has practically unlimited scalability by using DAG technology.

The rate of 1000 TPS was met at stress tests. Theoretically there is no ceiling rate, since the more loaded network gets and the more transactions get initiated, the speed of confirming previous transactions gets higher. An increasing number of transactions will cause increasing checking speed:

Prior to entering the exchange, IOTA’s developers performed a test attack: they increased the number of transactions by 300%. Foreseeably it led to increase of checking speed but didn’t shut down the network.

The sphere of IOTA application is payments and microtransactions. Also IOTA has integrated such functions as secure messaging and public data market. According to IOTA vision, these features will become constituent elements of the Internet-of-Things economy mechanism, where millions of devices will exchange digital information and payments in real time.

Here is more detailed information about mechanisms and functions available in IOTA:

Microtransactions. IOTA gives an opportunity to perform micro- and even nanotransactions due to its unique IOTA Tangle architecture, and it provides developers with an absolutely new set of tools for its applications in IoT and Web.

Data transfer. The core feature of IOTA is the feasibility of transferring data through Tangle.  IOTA gives users several options of transferring data through reliable and authenticated communication channels between devices. All data transferred through IOTA is completely authenticated and tamper-proof.

E-voting. Tangle allows to use secure data transmission not only for IoT but in other areas as well, such as eGovernance. An important aspect of this sector is e-voting.

Masked messaging. The first extensible module of the IOTA core, IOTA MAM (see more details in «Architecture» section) enable nodes to exchange highly valuable and confidential information through Tangle. MAM makes it possible to exchange data with multiple parties that have proper access.

Share-A-Service. As far as the whole world accepted sharing economy in such spheres as shared rides and accommodation, IOTA allows to build totally new space where anything with a chip in it can be leased in real time. There are things not being used for a long time, but through IOTA lots of those things, such as devices, appliances, drones, e-bikes, etc. and such resources as computer storage, computing power, WiFi bandwidth, etc. can be easily leased.

Examples of practical application of these functions are given in section «IOTA based projects».

The main team have been working on IOTA and its ecosystem since summer 2015.

During the recent years they implement improvements and optimise the Tangle concept. On 11.07.2016 the main net was launched.

At the time of this writing there is no possibility to start a private Tangle. For testing you can use a testnet or the main one. Developers provide IOTA PoWbox (Proof of Work box) service for free. It is a perfect solution for rapid prototyping which does not require installation .

Code for IOTA Reference Implementation (IRI) node was built on JAVA and available on GitHub. Codes on C++ and Rust are being developed.

GUI Client is also available on GitHub which amongst everything else has a special support of a graphics processor and light wallet.

Development activity of the source code according to coingecko.com as of 28.06.2018 was at 78% stage.

IOTA is developing its own wallet, Trinity. On 29 March 2018 alpha-version of the wallet for PC was issued, and on 29 May there was a mobile beta-version.

Since it is complicated to create a 81-digit seed for the IOTA wallet, some users benefited from the services of third-party online-generators. One of the most popular websites was iotaseed.io. On 21 January 2018 it was announced that wallets of those users who had used online-generators were losing funds. Total amount of embezzled funds was estimated in minimum 4 million dollars. At the same time the attackers deployed a DDoS attack against IOTA full nodes to obstruct any user’s attempts to get their lost funds back. IOTA officials allege that the problem was not connected with IOTA technology but with negligence of users and malicious online-services.

Developer’s framework

IOTA provides libraries for developers:

• Official Javascript library allows to use all IOTA functions in the browser or in NodeJS application.
• Python library helps to develop your own IOTA application for IoT.  It works on Python 2 and 3.
• Java.
• C#.
• Go.
• Other languages — under development.

Developers of IOTA prepared and keep maintaining up-to-date guidances that may help to start developing IOTA based applications both to beginners and to advanced developers. “Learn” hub resource provides developers with a platform to publish tutorials for their  IOTA based applications. It is a source of resources for developers who intend to start their work.

Also there is a library with documentation and manuals to assist the developers.

IOTA has no aim to fully replace the blockchain, it also works as an addition to the current blockchain system creating an Oracle module for smart-contract platforms, such as Ethereum or Rootstock. Besides it improves security of blockchain giving opportunities to add checkpoints for transactions.

The team actively works on cooperation with existing blockchain technologies and communities. Now they are mainly focused on EVM based blockchain (Ethereum, RSK, Qtum) and Hyperledger. Developers expect to achieve compatibility with other projects in this area upon new Oracle platform launch.

The first public exchange that started trading IOTA was Bitfinex. In autumn 2017 IOTA entered other large exchanges such as Binance, Coinone, OKEx.

Currently main trading volume is divided approximately equally between Binance, Coinone, and OKEx exchanges. You can purchase IOTA for USD via  Bitfinex or Exrates. You can buy IOTA in cryptocurrency pairs (IOTA/BTC, IOTA/ETH, IOTA/BNB, IOTA/USDT) via Binance. At Coinone you can buy IOTA tokens for South Korean wons.

Cryptocurrencies presence on exchanges as of 28.06.18 according to coinmarketcap.com:

IOTA token trading started on 13 June 2017.  Within the first 24 hours token capitalisation reached 1 billion USD. At that moment IOTA immediately took the 9th place by capitalisation,  having overtaken Monero and Ethereum Classic. Now its capitalisation is $2.686 bln USD and it gives IOTA the 10th place in general rating of cryptocurrencies by capitalisation (as of 28.06.18 according to coinmarketcap.com).

For a long time IOTA was balancing between 0.3 - 0.6 USD but in a context of December growth of entire industry it hit the record of 5.3 USD. Experts believe that it is both related to  the last year cryptocurrenies boom, and to the company’s successful strategy aimed at partnership with major brands. Following overall recession at cryptocurrencies market in January 2018 the price of IOTA also fell. In the beginning of April the price fell below 1 USD but then together with «cryptocurrency thaw» the price slightly rose again, however now we are observing a decline again and the current price of a token is $0.97 (as of 28.06.18).

Price and capitalisation dynamics of IOTA token:

White paper includes 4 sections: description of the system, description of transaction weights in DAG, stability of the system, possible attack scenarios. White paper contains detailed technical description of working principles of the system, narration is meant for developers: there is a lot of mathematical and technical terminology. It does not describe any economical or business elements of the project. The official website has a page Verticals where you can find concrete examples of different scenarios for using IOTA technology.

Also the website has a number of academic papers relating to Tangle technology. It might be interesting for those who want to study the technology more fundamentally.

On official blog of the project you can find Roadmap for development dating back to 31.03.17 г.: https://blog.iota.org/iota-development-roadmap-74741f37ed01. Development Roadmap describes in detail everything that was done, is under development or planned for development: it gives description of functional elements (client, module, etc.) in accessible language and the current status. However, apparently this information didn’t get any updates since it was published.

There is a separate Trinity Roadmap which gives detailed description of phases of work on the wallet and the progress.

There is a lack of Roadmap for developing the system, plans for its integration with other systems, relations with partner projects, projects using or planning to use IOTA in their work.

Team

Main team members:

• David Sønstebø (Founder) is a project leader for the development of super-economical power consumption of the processor for the Internet of Things.
• Dominik Schiener (Co-Founder) established his first start-up in May 2012 that earned him 10-15.000 Euro that he invested into creation of a server for mining tokens of Protoshares platform, now known as Bitshares; and invested the money that he earned into development of a fiat ←→ cryptocurrency exchange in Switzerland. Since 2015 he is focused on the Internet of Things and the smart city concept. CargoChain project was set, it took the 2nd place on Hackathonand developers forum and it got 30.000 USD prize. This project still exists but since creation of IOTA Dominik switched his attention mainly to it.
• Sergey Ivancheglo (Co-Founder) is a BSc and an Intelligent Electronic Systems Engineer. He developed the first version of NXT cryptocurrency core, invented defence methods for cryptocurrencies, called PoS, actually he improved PoS which failed to work without PoW.
• Prof. Sergey Popov (Co-Founder) is a PhD in Physics and Mathematics, graduate of Faculty of Mechanics and Mathematics of Lomonosov Moscow State University, where he took his PhD, currently living in Brazil. He is a professor in UNICAM where he is working on probability theory.
• Paul Handy (Developer) got his BSc in Electrical Engineering. He is working on blockchains and cryptocurrencies. In early 2013 he started with Bitcoin and Litecoin and has been following IOTA since the moment of the first publication in 2015. Paul is  interested in electronics, physics, mathematics, cryptography and peer-to-peer networks.
• Alfred Keller (Developer) is an experimental scientist and system administrator with many years of professional experience. His IT career started in Banking where he worked on planning, calibration and testing future system and network architecture. Later he became a partner in a company that was developing software and access control devices, biometrical identification and integration of cutting-edge unified communications. As he had prolific knowledge in C, C++, Java and Javascript, he has a great background for developing and testing main IOTA software and its artefacts. He has extensive experience in data transfer and cloud computing. He is an MA in Civil Constriction that he got in ETH [Swiss Federal Institute of Technology in Zurich].
• Alon Elmaliah (Developer) is a programmer and Electronics Engineer. After several years in a semiconductor industry in Intel, he devoted his time to studying distributed, decentralised systems and digital alternatives to cash using his skills in scalability solutions. He his impressive experience in education and technologies, so he is an active member of Cryptocurrency scene in Tel Aviv. He also qualified in Python, Computer Science and C ++.
• Sabri Goldberg (Designer) discovered bitcoin in 2012 looking for alternatives to Paypal. He started studying blockchains and it led him to starting Nxt in 2013. He was supporting Nxt while working on a full version of Corporate Identity project. Before coming to IOTA he was a designer for lots of multi-million blockchain projects.
• Prof. Cyril Grunspan (Mathematician) started his first PhD paper on theory of number in Cannes University, became a professor in Mathematics in a French school in Budapest, took his PhD on «Discrete Toda and Quantum Homogeneous Spaces» in 2001 in  Ecole Polytechnique. Later his research focused on Hopf-Galois extensions due to connection with quantum Tori, a concept that he defined and extended. In 2012 he  took charge of Financial Engineering Department in ESILV and was a key person in developing new areas of research such as actuarial science and FinTech. At his initiative ESILV became the first engineering school in France that had a course on bitcoin and cryptocurrencies, the first school in the world that certified diplomas in blockchain (in cooperation with Paymium) and the first school that provides courses in programming blockchain.  Together with Ricardo Pérez-Marco he published an article that provided corrections to the mathematical part of a Bitcoin fundamental paper by Satoshi Nakamoto. His extensive experience in multiple areas in Mathematics will be highly valuable in the next phase of IOTA development. As a mathematician, he will be working together with IOTA co-founder Sergey Popov and his primary focus will be on fundamental Tangle mathematics, as well as formulas for a projected IOTA new IXI module that will significantly extend IOTA’s functionality.
• Andreas C. Osowski (Developer) has written code for the full range of small embedded devices to large-scale multi server applications. He is currently working on Rust, extending IOTA.
• Chris Dukakis (Developer) is a software engineer with experience in various web-technologies, primarily focused on studying and creating decentralised systems. As a Computer Science student, he learnt about crypto world in 2012 and became a part of IOTA community in March 2017. Currently he is working on Proof of Concept, showing unique opportunities of IOTA to build new business models in real world, as well as on Hub IXI.
• Lewis Freiberg (Developer) develops solutions for Internet and mobile. He has Bachelor’s degree in Psychology from the University of Melbourne.
• Jeremy Epstein (Lead Advisor to IOTA’s marketing) has 20 years of international marketing experience. He used to be marketing VP at Sprinklr, a “unicorn” which grew from a $20 million valuation and 30 people to $1.8 billion valuation and 1400 people in 4 years. He was selected the marketing subject matter expert for the Blockchain Research Institute led by best-selling authors of the Blockchain Revolution, Don and Alex Tapscott. He is also a co-Founder of Crypto Explorers, a community for individuals passionate about crypto world. Jeremy is also an author and co-author of many books about marketing and blockchain technologies .

It is not a complete list of project members, IOTA has a huge and strong team, its members are  recognised professionals both in their subject areas and in blockchain technologies. The team continuously grows.

With regard to cryptography algorithms development the team subcontracts 5 world-class cryptographers, as well as 3 independent ones (source).

IOTA Foundation team (supporting all IOTA related projects):

• Per Lind has a degree in Economics, he was a pioneer in renewable energy resources prior to becoming the Head of Marketing in Bang & Olufsen. He succeeded in several companies in various industries, including IBM and ResponseTek in USA and Europe. Along his career he was working directly or indirectly with some major world brands, including Ford, Aston Martin, Mercedes Benz, SonyEricsson, Virgin Media and many others. Currently he leads his own business development company Farmor Cloud Factory that deals with a variety of western companies, such as HYPR, Falcon.io and iMotions striving to settle in the  Asian region. Per Lind is also a mentor in StartupBootcamp and cooperates closely with regulators in order to promote ecosystem relating to innovation technologies that he finds interesting. HE acknowledges the unique IOTA potential since in the recent years he has faced limitations of blockchain architecture in his professional life. He has already acted big in IOTA project by attracting attention of the world leading institutions to IOTA.
• Dr. Carsten Stöcker has a PhD in Physics (University of Aachen). He is leading the Machine Economy/Blockchain Lighthouse in the innogy Innovation Hub (formerly RWE Innovation Hub). He is predominantly working on use cases and business models by integrating various technologies such as cyber physical systems, IoT, cryptography and Blockchain. He used to work in German Aerospace Center (DLR) and Accenture GmbH. In addition to this he is also a member of the Future Council Network on Blockchain over at World Economic Forum (WEF).
• Dr. Navin Ramachandran is a practising radiology consultant at University College London Hospital (UCLH), an honorary senior lecturer / healthcare data researcher at University College London Centre for Health Informatics & Multiprofessional Education (UCL CHIME), and a co-founder of OpenCancer and the Platform for Enhanced Analytics and Computational Healthcare (PEACH). His main interests are in digital design, data modelling, interoperability, analytics and identity management. Healthcare is potentially one of the spheres where Internet of Things might be used, so as IOTA.
• David A. Cohen is a Software Entrepreneur who works with CEOs, corporations, and startups to help them design and build world-class decentralized software systems. David was one of the first to apply Artificial Intelligence concepts such as machine learning and pattern recognition to energy applications. At Silicon Energy, he built the first web-based platform (Distributed Energy Management) and NOC used to create the first virtual power plant. David then co-founded Infotility, and as CEO pioneered “the Grid Edge” and unlocked a multi-billion dollar SmartGrid market. He also developed the Auto-DR platform — now Open-ADR™ — the industry standard for automated demand response; and GridAgents TM the SmartGrid industry’s first intelligent agent-based software platform. The GridAgents TM platform was deployed at Con Edison’s 3G-System- of-the- Future in Manhattan. As COO, helped launch Galaxy™, the industries first Smart City managed services platform. He became the Chief Strategy Officer for the Car Charging Group, where he assisted in the M&A of Ecotality and the Blink Network ™ to become the largest electric vehicle charging services network in the world. David founded Evolution7 Labs which developed the PowerStation™ Gateway to enable solar microgrids as well as the Energy Mashup Lab, an open source foundation to promote a highly distributed energy system. David is a permanent member of the GridWise Architecture Council (GWAC) which was instrumental in launching the vision and architecture for the SmartGrid industry.  David is currently the COO of ZipPower developing the Community System™ to enable smart energy networks for cities. David received his Masters (MSc) in Engineering from the University of Colorado. His Masters Thesis explored novel Artificial Intelligence-based energy control and prediction methods. He sees the future of IOTA in active participation in the 4th Industrial revolution, building The Internet of Everything (IoE).
• Wilfried Pimenta de Miranda has been working internationally at the forefront of emerging technologies, helping incumbents and startups explore new business model innovation, expand internationally and get in position for the clean energy revolution. Wilfried has been collaborating with global champions from Europe such as EDF, Shell, Statkraft or Scatec. At Multiconsult, a leading international engineering consultancy from Norway, he played a key role in growing its renewables footprint, scaled its activity across industries and geographies and contributed to its successful IPO in May 2015. Wilfried now shapes strategic innovation initiatives and startup ventures that open new pathways to value creation for business and society. He claims IOTA to be a standard ground for the Internet of Things: «I am thrilled to be joining the IOTA Foundation and its team and can’t wait to equip worldwide innovators with this cutting edge technology».
• Regine Haschka Helmer started her career in the early 90's, at I-D Media AG, one of the fastest growing digital consulting agency in Europe as the COO. Regine developed successful digital strategies and business models but also outstanding digital projects for corporates of a wide range of industries. In 2010 she founded Seedlab GmbH in Berlin, focusing on consulting large companies in digital transformation processes and digital business development. With Seedlab she establishes cooperation to potential startups enabling new business models. With her team she builds innovation departments or incubators and supports companies in their digital transformation process. She is also business angel investor of various startup companies and supporting them as an adviser. Regine is lecturer at the HWZ (Economic University) in Zurich, Keynote speaker and author. Since then she has actively been supporting the project in the development of use cases and Proof of Concepts with corporates, to demonstrate and explore the potential of IOTA for a wide range of industries.
• Jochen Renz has held several international positions at Computer Associates (CA Technologies), including COO of European Operations. For the last 3 years Joe has been part of the thriving innovation ecosystem in his new hometown of Chicago offering an extensive network across the innovation ecosystem New Mobility that spans hundreds of startups, corporations across multiple industries, incubators / accelerators, academia and the investor community. He has served as a mentor at Techstars Mobility Detroit, Microsoft Accelerator, 1871 and many more. He is also an angel investor and advisor to several startups.
• Prof. John Halamka MD, MS, is the International Healthcare Innovation Professor at Harvard Medical School, Chief Information Officer of the Beth Israel Deaconess System, and a practicing emergency physician. He strives to improve healthcare quality, safety, and efficiency for patients, providers, and payers throughout the world using information technology. John has been and is continuing to be involved in spearheading a myriad of modern eHealth practices. He has written 5 books, several hundred articles, and the popular and deeply fascinating Geekdoctor blog.
• Alexander Renz obtained degrees in European Business Studies and International Marketing from the prestigious Brunel Business School, his international career includes companies such as Bosch, SAP and Microsoft. Together with his brother Jochen Renz he represents New Mobility ecosystem.
• Dr. Julie Maupin studied both law and economics, established herself as one of the world’s leading experts in international economic law, global governance regimes, and alternative dispute settlement, picked up a PhD in international development studies, and in 2014 she was appointed Senior Researcher at the Max Planck Institute in Heidelberg. Julie currently sits on the Fintech advisory board of the German Ministry of Finance and the G20 Digital Economy Experts Task Force.  She has recently been advising IOTA on corporate management of the foundation.
• John Edge developed an expertise in the design, build and launch of algorithmic trading businesses and went on to launch new lines of business at Capital Markets, UBS, Lehman Brothers and J.P. Morgan. He was working on launching world’s first enterprise real-time trade surveillance system for capital markets Redkite captured a market segment and led to the acquisition of Redkite by NICE Systems in 2012, where he contributed to the design of a Bitcoin ETF. Through this work, John identified a requirement for creating a bridge between the existing institutions and the emerging technologies given the potential these new protocols provide for the creation of the ‘Internet of Everything’. Over the last 4 years John has created an acceleration platform, focused on digital identity of people and devices, plus digital asset transaction networks. In 2014 John co-founded ID2020. He is currently a fellow at MIT Connection Science.
• Nick Beglinger is a Swiss economist (LSE). In 2008 he co-founded the Cleantech21 foundation and since acted as CEO. Between 2009 and 2016, Nick acted as president of Switzerland’s first green business association,  and thereby influenced the country’s climate, energy, and mobility policy. At COP22 in Marrakesh, Nick initiated the Climate Ledger Initiative (CLI) bringing blockchain technology to UNFCCC, and the Hack4Climate at COP23 in Bonn.

Foundation grows constantly and new members appear, everyone being unique and highly professional specialists in their areas of work. Almost all of them have international experience and world-wide popularity. IOTA should not have any problems with global promotion with those ambassadors at least in the western world. IOTA Foundation merged with a popular platform for founders and startups F6S to make Foundation’s work more efficient.

Investors

Venture investor Outlier Ventures has invested into IOTA an amount 7 times more than its estimated cost, it was the first direct investment into technology.

Robert Bosch Venture Capital, department of a big corporation, dealing with venture investments, made its first investment into cryptocurrencies through buying a vast number of IOTA tokens in 2017.  

Partners

In August 2017 IOTA Foundation started a partnership with REFUNITE, the largest database of missing people, to help reunite the families during or upon the conflicts.

IOTA Foundation got invitations from the Tokyo Metropolitan government to take part in an accelerator program called Blockchain Business Camp Tokyo. Among others there were such firms as Sony, Honda and Toyota.

The project is a part of Microsoft Azure network. In the long run developers are going to build their own processor to process up to 1000 operations per second.

In the late 2017 IOTA has negotiated its partnership with 20 major companies, including Deutsche Telecom and Fujitsu.

According to the press release published on 31 May 2018, a large financial group from Norway DNB ASA (Den Norske Bank) and IOTA Foundation signed the letter of understanding. Together they will research potential use of IOTA Tangle. DNB and IOTA will search for new business models in their areas of work. According to the head of DNB department of distributed ledger technology department Lasse Meholm, one of project objectives is to study the technology and provide opportunities to bank employees who work with clients in order to develop new business processes.

ON 22 June 2018 IOTA Foundation signed Memorandum of Understanding with SinoPac, a large Taiwan financial holding company that works with Asia and the Pacific. They are planning to perform joint research of blockchain technology, namely Tangle.  SinoPac tests practical use of technology in designing a notary solution iCertificate (see «IOTA based projects»).

Other IOTA partners are described in «IOTA based projects» section.

IOTA works on DAG technology, so these competitors using the same technology at work should be mentioned: ByteBall and Nano.  One of Reddit users compared these three:

Byteball is focused on performing p2p transactions, NANO’s goal is to design an accounting unit for cryptocurrencies while IOTA aims to maintain IoT functioning.

IoT Chain startup is worth mentioning as IOTA’s Chinese competitor. This platform is also based on DAG planning to become the core network for IoT. Main stages of IoT Chain prototype development are planned for 2018-2019. The project has good investment support and according to experts in case of success it can become a serious rival to IOTA by 2020.

µRaiden is being developed in Ethereum ecosystem as a system of micropayments, IoT competing protocol.

Also Atonomi is being designed on the base of Ethereum providing security protocol and infrastructure for IoT devices.

Large corporations are testing Hyperledger for IoT. David Sønstebø commented in this regard: “Hyperledger has its own limitations.While it might be good for enterprise solutions in the future, it's ultimately a permissioned ledger, and that's the antithesis of IoT, which has to be open in order to realise its true potential. It can't be a closed ecosystem because that's literally the opposite of interoperability. The problem we are seeing with Hyperledger is that it's very corporate driven; it's the typical old school way of doing things, which is fine for certain use cases, but not open ecosystems. The only IoT use case that they have experimented with, as far as I know, is the shipping one, where you track the supply chain for provenance etc - even those pilot projects have not really amounted to anything other than headlines. That being said there could of course be overlap between permissioned blockchains like Hyperledger and permissionless IOTA, as long as they are used in their correct domains.

Citation, social networks

IOTA is a very popular project: there are 4-6 citations in the news daily (according to coincontrol.io) and about 30 posts in social networks.

Activities in social networks:

•           Reddit — over 111.000 followers.
•           Twitter — over 114.000 followers.
•           Facebook — 45’700 followers.

The project has an active thread at bitcointalk.org, the main one in English and local ones in other languages.

Applicability

According to  iota-nodes.net IOTA currently (as of 30.06.2018) has 269 registered nodes.

Top 10 countries with the most number of registered nodes:

Now about 10 transactions per second  are initiated in the main IOTA network.

There are several explorers that let you monitor its activity:

• http://tangle.glumb.de/ is a graph real time visualizer that shows the process of Tangle build in the main net and testnet;
• https://tanglemonitor.com/ also shows the process of Tangle build in the main net and testnet in real time;
• https://visualizer.iota-tangle.io/ is a graph real time visualizer that shows the process of Tangle build in the main net,
• https://iotasear.ch/, no updates, last transaction dates back 2 months ago.

Projects on technology

On 17 July 2017 SatoshiPay micropayments company stopped using Bitcoin and opted for IOTA.

In September 2017 there was announced a launch of a machine learning service using IOTA for payments. CognIOTA aims to provide users with opportunities to sell computing resources of their processors standing idle to other users in real time regime.

The Foundation started cooperation with Volkswagen and Innogy to develop CarPass  IOTA based technology which provides secure control routes, digital IDs and car charging stations.

In Haarlem, Netherlands, a pilot system allowing to verify authenticity of state documents without attending respective institutions was created. This IOTA based system with an open code is available for free to any municipality.

In February 2018 the German Bosch announced that it will use IOTA technology to design a self-driving car.

In early February 2018 it was also announced that the capital of Taiwan was developing digital cards for capital citizens together with IOTA and local startup BiiLabs. Taibei will incorporate IOTA ID service also in some projects of creating a «smart city».

On 11 June 2018 Volkswagen announced cooperation with IOTA in its Twitter. At CEBIT 2018 companies were planning to show a new pilot version of a collaborative project of using IOTA DAG. This project aims to find a solution for the core problem of safe conducting over the air transfers (OTA) of transparent and intact firmware updates into self-driving cars network. Currently data distribution is centralised, so there is no guarantee that information delivered into each car is authentic and intact. This problem can be solved through a ledger or another similar technology.

SinoPac is working on notary solution, iCertificate, that uses IOTA Tangle. This solution is applicable to all types of digital documents for state and private sectors. The main goal is to ensure data protection. «iCertificate is an always needed notary service in a digital certification application, not only in education or public utility territories but in trading and supply chain industries», says Tina Chiang, Senior Executive Vice President of SinoPac.  She explained that with IOTA’s support, iCertificate was developed as a flexible and extensible service, which efficiently consolidates the bothersome landscape of many individuals and different digital certification authorities into one platform.

There was opened a IOTA-based public market (Data Marketplace) for data provided by external sensors. The aim is to monetise the market with a volume of 2.5 trillion bytes of data, generated daily and showing exponential growth. 20 large organisations around the world, including Deutsche Telekom, Bosch, Microsoft, Orange, Fujitsu and others, joined the project. The market is giving connected devices the ability to securely transfer, buy, and sell various granular data. Fee-free Micropayments are processed by IOTA protocol. Data that was initially placed in the market includes environmental data from various locations all around the globe, agriculture data from Africa, anonymized health care data from wearables. Any user of network can also sell their data in the market.

Famous persons in the team

Founders of the project are no doubt famous in cryptocommunity beyond IOTA. David Sønstebø is known for his contribution into IoT development, he started a project developing a super-economical power processor. Sergey Ivancheglo created the first consensus mechanism Proof of Stake in 2013. Cyril Grunspan is a famous French mathematician.

Internet of Things market is currently going through a crazy growth. According to Ericsson estimations, by 2018 the number of sensors and devices in the Internet of Things will exceed the number of mobile phones and will become the largest category of connected devices. Compounded Annual Growth Rate (CAGR) of this sector between 2015 and 2021 will be 23%. Company’s analytics expect that by 2021 16 billion connected devices, out of approximately 28 billion around the globe, will be connected to the IoT. According to IDC, total global capital investments into IoT in 2016 were 737 billion USD, in 2017 more than 800 billion USD. And by 2021 they predict it to be around 1.4 trillion USD. So should the team implement all their ideas, future of IOTA  looks optimistic and it will succeed.

IOTA technology is at initial , and mostly very experimental, stage now. As soon as it gets wide practical applications there will be many more problems such as reliability, legal consequences, real price of computer calculations, etc.

Now developers actively build the platform, improve its functionality, finalise code, correct vulnerabilities, implement new tools. Apart from the IoT IOTA aims towards online payments and fund transfers.

Implementation of IOTA is being criticised due to innovative cryptographic approach and for most users lack of apparent evidence that it has cost-effective advantages. Besides there are certain doubts caused by ternary redundancy for theoretical protection of quantum processes (no mass application, only prototypes available) and use of Coordinator (cooperates with fullnodes for extra protection against attacks onto young fragile network), necessity of its use and period of further application.

Spencer Bogart, partner at Blockchain Capital LLC, which invests in blockchain startups, says that «together with evident advantages DAG systems are still far from being a popular alternative, they are centralised and raw and based on non-verified, probably, dangerous decisions».

References

Official website: https://iota.org/

Twitter: https://twitter.com/iotatoken

Reddit: https://www.reddit.com/r/IOTA

Facebook: https://www.facebook.com/iotatoken

GitHub: https://github.com/IOTAledger

Medium: https://medium.com/iotatangle