Is IOTA making the blockchain technology redundant?
The blockchain technology has its origin in 2008. Back then, in the year of the financial crisis and the Lehman bust the system was introduced for the first time and applied. A good nine years later blockchain has changed rapidly and is used in a number of areas today. This goes from the user-related invoice in the real estate industry to digital currencies. Applying blockchain is no standard yet, regardless of the relevant advantages.
The blockchain cannot be manipulated. Information, that are tied to a blockchain are basically irreversible. This is because of the high technical standard, that needs to be applied, in order to save information in a blockchain. This makes blockchain the key technology for crypto currencies. Crypto currencies are making digital payments independent from the Euro, the dollar or any other currency. Exchange rate fluctuations are therefore a thing of the past.
But even with these kinds of transfers a transaction fee is charged. The user for example pays for a product which costs 0,2 bitcoin and will be charged 0,200000001 bitcoins. The fee is a compensation for the person who provides their computing power, in order to add a new chain link to the blockchain which documents the transaction.
Transferring small amounts of money with the crypto currency therefore becomes highly unattractive. Often the transaction fees are higher than that product’s value. So, what about a technology that carries out a transaction for free?
IOTA is developing technical standard for free transactions
Under the term IOTA a standard has beed developed that makes the transaction of smallest amounts possible without needing to access the blockchain. With this method costly computing operations are unnecessary in oder to add another block to the blockchain. Especially in the linked industry or the internet of things (IoT) this is a striking advantage, if no transaction fees are charged. Plus it will become more and more relevant in the future to pay small amounts digitally.
Read more about what is behind the IOTA-technology at tangleblog.com. This website explains in detail, which advantages IOTA has compared to blockchain and why this technology is also a development to the blockchain technology.
Of course you should also look forward to our EURO FINANCE TECH V on 16 November 2017, because we will also talk with our experts about this topic.
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