WWW.IOTA.ORG – What is IOTA? What is IOTA? IOTA is a revolutionary new transaction settlement and data transfer layer for the Internet of Things (IoT). It is based on a new distributed ledger technology, the Tangle, which overcomes the inefficiencies of current Blockchain designs and introduces a new way of reaching consensus in a decentralized peer-to-peer system.

Using IOTA, for the first time ever, people and machines can transfer money and/or data without any transaction fees in a trustless, permissionless, and decentralized environment. This means that even nano-payments are possible without the need for a trusted intermediary of any kind.

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IOTA is the missing puzzle piece for the Machine Economy to fully emerge and reach its true potential. IOTA is envisaged to be the public and permissionless backbone protocol for the IoT that enables true interoperability between all devices.

An Open-Source Distributed Ledger
The first open-source distributed ledger that is being built to power the future of the Internet of Things with feeless microtransactions and data integrity for machines.

Anyone with a bank account is familiar with the concept of a ledger, containing records of their debits and credits. Collectively, IOTA has all entrusted financial institutions for generations to safeguard these highly sensitive records and their accuracy. With no ability to verify the data that we receive on the Internet today, and with cybercrime on the rise, this delegated and unverifiable trust has become a major obstacle for an inclusive and permissionless economy.

With the advent of distributed ledger technologies, we are now able to distribute and synchronize ledgers of data and money in secure, distributed, decentralized and permissionless environments. By removing the need for trusted third-parties as the gatekeepers and arbiters of truth, enormous efficiency gains, innovation opportunities and new value propositions emerge.

Blockchain technology promised a compelling vision: decentralized networks allowing open innovation and peer-to-peer transactions without intermediaries or fees. Ultimately, they were never built to execute it in full, due to inherent technical flaws in their design. As blockchain adoption has increased over the last decade, early adopters have been hit with sluggish transaction times and skyrocketing fees.

As financial rewards for validating blockchain transactions became increasingly competitive, their networks have also become increasingly centralised around a few powerful actors. But the need for decentralized and permissionless systems remains, and has only increased in recent years.

By solving the inefficiencies of the Blockchain, IOTA, based on the revolutionary distributed ledger technology, the Tangle, is the missing link for the Internet of Everything and Web 3.0. Powering a secure, scalable and feeless transaction settlement layer, IOTA will empower machines and humans to participate in flourishing new permissionless economies – the most important one being the Machine Economy which we are building.

Meet ‘the Tangle’ 
IOTA’s distributed ledger, by contrast, does not consist of transactions grouped into blocks and stored in sequential chains, but as a stream of individual transactions entangled together. In order to participate in this network, a participant simply needs to perform a small amount of computational work that verifies two previous transactions.

Rather than creating a hierarchy of roles and responsibilities in the network, every actor has the same incentives and rewards. In order to make a transaction in the Tangle, two previous transactions must be validated with the reward for doing so being the validation of your own transaction by some subsequent transaction. With this ‘pay-it-forward’ system of validations, there is no need to offer financial rewards.

Transacting with IOTA is and will always be completely fee-free. Moreover, without the need for monetary rewards, IOTA is not limited to transactional value settlements. It is possible to securely store information within Tangle transactions, or even spread larger amounts of information across multiple bundled or linked transactions. This structure also enables high scalability of transactions. The more activity in ‘the Tangle’, the faster transactions can be confirmed.

Highly Scalable 
Increased network activity decreases transaction settlement times

Low resource requirements 
Designed for tiny devices, such as sensors, to participate

Zero-fee transactions 
Send 1 cent and receive 1 cent, send $1,000,000 and receive $1,000,000

Secure data transfer 
All data is encoded, allowing secure data transfer, storage and reference

Offline transactions 
Devices never need perfect connectivity

Quantum Immune 
Using special signatures IOTA is resilient to the next generation of computing

IOTA Frequently Asked Questions 
What can I do with IOTA? What are some potential use-cases? 
IOTA currently does two things really well: transactional settlement (especially feeless and fast micropayments) and data integrity. With these two features, a plethora of potential use cases is possible for the very first time.

Real-time streaming payment services for data and energy, immutable data history tracking for supply chains, computational resource sharing (for bandwidth, CPU, and storage) and more, IOTA enables entire new business models which were previously impossible with the legacy financial system and other Distributed Ledger Technologies built on Blockchain.

More open-source platforms (such as Oracles, Smart Contracts, Q, etc.) are on our roadmap and will be added in the near future. The main focus of IOTA is to enable the emerging IoT, but beyond this IOTA plans to be the transaction settlement and data integrity layer for the Internet of Everything.

This includes smart cities, smart grids, infrastructure, supply chain, financial services, peer-to-peer payments, insurance, and much much more. On the IOTA Blog and the Verticals tab you can read about more concrete examples on the different use-cases the IOTA technology can enable. Get started

What is the IOTA Foundation? 
The IOTA Foundation is the non-profit, open-source driven organization behind the IOTA distributed ledger technology (DLT) and other related technologies. The IOTA Foundation houses the academic researchers, developers, industry experts, and other engineering and business professionals working on the development and adoption of the IOTA protocol for the machine economy and the IoT industry.

Apart from research and development, the Foundation also fosters the adoption of its technologies into real-world production use-cases at scale by providing an open, collaborative ecosystem where companies, startups and developers alike can innovate with the technologies and build proofs-of-concept, case studies and pilots together.

The IOTA Foundation is organized into five divisions:
– General administration: Operations, communications, finance, human resources, and legal.
– Social & Public Policy: Social initiatives, collaborations with Governments and NGOs, and governmental regulations advocacy.
– Research & Development: Academic research, IOTA core protocol development, theory to working code, protocol standardization, and new technologies.
– Ecosystem: Community development, developer resources and advocacy, educational material, events and hackathons.
– Business & Industry Streams: Industry adoption, key account management, proof-of-concept development, strategic development, alliance management.

Why create a non-profit Foundation? 
The potential of distributed ledger technologies can only be unlocked if they are deployed freely and openly, enabling global ecosystems to be formed and giving anyone the opportunity to participate and innovate. Even just a cursory glance at the history of the internet corroborates this fact. In the 1980’s commercial Local Area Networks (LANs) depended on highly proprietary protocols with rampant vendor lock-ins.

But it didn’t take long for the commercial world to appreciate the benefits of open interconnectivity protocols being used by academics in the research and development community. The open-source and interoperable TCP/IP protocol soon after came to be the dominant internet protocol and remains so to this day.

With this in mind, the IOTA founders have decided to register a non-profit foundation (“gemeinnützige Stiftung”) in Germany which will act as a neutral and independent entity to further research and develop the IOTA protocol and other open-source platforms, and to set up a framework for the open ecosystem around the IOTA protocol to grow and prosper.

Why establish the IOTA Foundation in Germany? 
The ultimate goal for the IOTA project is it to achieve mainstream adoption of the IOTA protocol, and establish IOTA as the main currency for machines. As such, being headquartered and regulated in an environment which enables and further accelerates this adoption is of utmost importance. Germany offers the right environment for the IOTA Foundation for multiple reasons:

– Regulations. Germany is one of the most highly regulated countries and is largely taking the lead in establishing regulations of digital ledger technologies on both national and EU-wide levels. This gives the IOTA Foundation a unique opportunity to work closely with regulators to help shape smart and effective policies and quickly adopt them.

– Business. Many of the largest industrial, automotive and retail companies are headquartered in Germany giving the IOTA Foundation a unique opportunity to work closely with them to integrate the IOTA core protocol into their businesses and invite them to participate in the IOTA Foundation and Ecosystem.

– Growth. A thriving startup ecosystem, especially in Berlin and Munich.

– Non-profit mentality. Germany is also one of the countries which have pioneered the concept behind cooperatives. Many large German corporations are owned by non-profit foundations, and as such have a radically different mindset that is not driven by pure profits, but by the greater good for society.

Even though the IOTA Foundation is headquartered in Berlin, Germany, it is a global organization which operates in more than 10 countries already including Israel, Brazil, Norway, United Kingdom, USA, Taiwan and Singapore.

If there are no fees with IOTA, how does the IOTA Foundation make money? 
IOTA is simply an open-source protocol which enables trustless and decentralized transaction settlement and secure data transfer, and will serve as the foundational protocol for the future machine economy and IoT industry. You can think of it like the open-source Hyper-Text Transfer Protocol (HTTP) which enables distributed, collaborative, and hypermedia information systems and serves as the foundational protocol for the World Wide Web.

No organization owns these open-source protocols because they cannot be owned. A protocol is simply a shared language – a commonly agreed upon set of rules to share information, and in the case of IOTA, also value. They are public knowledge and there is no profit-model behind them. The IOTA Foundation was mandated to further develop the open-source IOTA protocol, bring the protocol to production-readiness and enable a pathway for its full-scale adoption.

The initial funding for the non-profit IOTA Foundation came from the IOTA community in the form of IOTA token donations. It is worth noting that these initial IOTA token donations still constitute a significant portion of the Foundation’s assets. Because the IOTA total token supply will forever remain fixed, basic economics would dictate that if the demand for IOTA tokens increases as the protocol is adopted into the machine economy and IoT industries, the value of these tokens will rise.

However, this is clearly not a sustainable source of funding. Additional and more sustainable funding streams will be procured from public grants and contributions from corporations and individuals.

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