Welcome to IOTA

Grow your business opportunities through secure and scalable distributed ledger technology.

Where will your business be in five or 10 years?

The global digital economy of the near future can seem as bewildering as it is exciting, with several technological revolutions redrawing the roadmap, presenting new challenges and creating opportunities for new business models and job creation. IOTA is here to help your business face these challenges head-on.

Let’s look at some of the trends shaping tomorrow’s business landscape.

A hyper-connected future is being built on top of artificial intelligence, machine learning and billions of interconnected devices that exchange data and value, enabling machines to become active economic agents and unprecedented amounts of data to be processed in real-time. Think of electric cars that store energy before selling that energy back into the grid using a charging station as a conduit, or devices that track the delivery of goods across an entire supply chain.

Meanwhile, the combination of decentralized ledger technology and cryptocurrencies is creating new token economies that open up previously undreamt-of business models and communities, such as NFTs, decentralized autonomous organizations (DAOs), tokenizing previously dormant assets and smart contracts.

And the advent of the decentralized internet, Web3 – with DeFi (decentralized finance) as its first “killer app” – promises a shift away from a centralized platform economy to an ecosystem in which all contributors can profit in value creation.

For businesses to compete in this new digital economy, they need to be on top of data security and take advantage of flexible new business models, such as monetization of data, functions on-demand and pay-per-use.

IOTA builds the technical, decentralized infrastructure for the new economy, an infrastructure that is free for you to use to empower your business.

What is distributed ledger technology (DLT)?

Distributed ledger technology (DLT) refers to a network of nodes that replicate, share, and synchronize digital data and value spread across many different locations. Unlike with a centralized database, there is no central administrator. Famous examples include blockchain and directed acyclic graphs (DAG).

IOTA is a green, decentralized and open-source digital infrastructure. It is built on the IOTA Tangle, an open, feeless and highly scalable distributed ledger protocol, designed to support frictionless data and value transfer. IOTA is designed to be the most reliable distributed ledger technology (DLT) for Web3 applications and digital economies.

IOTA empowers businesses like yours to build solutions with its open-source tech stack. Its products and solutions solve specific industry problems and offer a broad range of functionalities to users, while its series of frameworks make it easy to tailor your solutions across different verticals. It also opens up the field for completely new, emerging verticals that benefit from Web3’s qualities, such as decentralization, trustless verifiability, selfgovernance, new funding opportunities, native built-in payments, native token interoperability and more.

IOTA can aid your business overcome roadblocks, such as the following examples:

1. Security - In a connected economy, the security of each device is critical. Successful businesses win the trust of their audiences that they can protect data. IOTA secures data with the Tangle’s state-ofthe-art cryptography: all transactions are conducted using safe cryptographic encryptions.

2. Network Stability - Businesses need networks that can handle an increasing amount of participants and transactions. Bottlenecks are bad for business, and network stability has to be maintained continuously across different platforms without a single point of failure. IOTA is highly scalable, with virtually no limit to the number of devices in the network, and can already process over 1000 transactions per second.

3. Control - Businesses and individuals need to have control over their online identities and decide who gets access to their data, when and for what purpose. IOTA provides frameworks like IOTA Streams and IOTA Identity to grant access to immutable data to specific parties, and allow participants to verify data authenticity without having to go through central intermediaries.

4. Monetization - To monetize their data, businesses need to be able to transact value and data at little or no cost, avoiding the high or volatile transaction fees that can cripple business models in the DLT space. IOTA is free of transaction fees, so it will never cost more to carry out a transaction than the actual value of that transaction.

IOTA – just another blockchain

The IOTA protocol (known as the Tangle) is a distributed ledger technology (DLT). As such, it offers everything blockchain technology offers and more. It is built on a different technical basis, using a directed acyclic graph, which enables the parallel processing of transactions.

The original ideas and concepts behind blockchain and Bitcoin were about absolute security and decentralization, neglecting aspects such as interoperability, scalability, energy efficiency and environmental impact. Consequently, early projects face significant difficulties in remaining functional as the network grows.

Bitcoin and Ethereum, for example, have seen a high increase in their transaction fees, making them unviable for low-value transactions, as fees can easily exceed the transaction amount. More recent blockchain concepts try to work around these deficiencies, offloading some features to separate protocols, networks or centralized systems outside (“off-chain”) the distributed ledger. However, these new concepts do not fundamentally solve the negative effects but abstract them, introducing additional friction, complexity, fees and security risks.

IOTA takes a different approach to provide a generally usable, scalable, interoperable and energy-efficient network.

The Tangle consists of individually connected transactions, forming a directed acyclic graph (see the diagram on the next page). Each new transaction validates at least two previous transactions.

Whereas blockchains rely on miners to select and aggregate the transactions with the highest fees into a sequential chain of blocks, the Tangle can process transactions in parallel, scaling with growing activity in the network. As transactions are confirmed by the users of the network and can be handled on an individual level (they are not locked into blocks), the IOTA protocol offers better flexibility for conflict resolution, as well as independence from paid third-party validators and miners.

What does IOTA create for my business?

Its unique features make IOTA the perfect choice for a wide variety of business use cases.

Real-time data integrity at scale, combined with feeless transactions of data and value, make machine-to-machine communication and data sharing between unknown counterparties feasible. This enables companies to monetize their data by sharing it with others (e.g. along the supply chain) and devise new offerings for customers (such as energy microgrids, where prosumers trade energy locally).

IOTA can be used for secure data transactions without having to buy or hold cryptocurrency. This distinguishes IOTA from other blockchains or DLT protocols and is a strong economic advantage for companies that want to benefit from a DLT but are concerned about cryptocurrency. Instead of a token fee, in some cases IOTA requires a deposit of tokens to secure data on the main ledger. This deposit will be returned in full when the issuer “archives” the data.

The IOTA Foundation’s contribution to the evolution of DLT is the development of opensource software for individuals and companies. This includes advancing the core protocol, but also (co)developing technology frameworks and products, making it the leader in the next generation of DLTs and a spearhead of secure, green and nonprofit software engineering.

Businesses can also derive value from IOTA frameworks, which extend the core protocol with adaptable solutions that solve overarching problems. For example, the IOTA Identity framework enables people, organizations and machines to create and have complete control of their digital identity, while IOTA Stronghold isolates digital secrets from exposure to hackers and accidental leaks. Instead of building the same functionality from scratch for every application, businesses can rely on frameworks, adapting them to their needs.

IOTA Is...

IOTA is secure

The whole system is distributed across many network participants and validators and therefore has no single point of failure or single point of attack. Attackers will be recognized and circumvented by the network, which ensures the functionality of the distributed ledger. Unlike vulnerable centralized systems, data stored on IOTA cannot be compromised unless all network participants are compromised at the same time. IOTA comes with in-built security through its Stronghold framework. IOTA Stronghold can be used for privacy-critical functions of IOTA clients (i.e., private/public keys management) and provides state-of-the-art cryptography (i.e. noise protocol) enabling devices to safely work together.

IOTA is Lightweight

The hardware/processor requirements for the nodes are very modest. On the client side, we offer libraries down to the C-language. This enables a broad range of device types to connect to the Tangle. IOTA does not rely on Proof of Work consensus, hence the energy consumption of each device is very low, which enables the protocol to run on small single-board computers and edge devices. As an example, IOTA can implement a wallet on the devices such as the ESP32 or the ST X-CUBE-IOTA1.

IOTA is feeless

IOTA’s protocol is free of transaction fees. Consequently, the fees of a transaction will at no point exceed its value. The protocol also allows the separate transfer of data and value, so that network participants can execute data transactions without needing to attach a value to it. On-ledger data transactions require a deposit of IOTA tokens which will be returned when the data is declared obsolete and is no longer kept in the ledger state. Where other DLTs decrease the stack of cryptocurrency tokens through transactions, the IOTA token can be considered an opportunity cost instead. The number of held IOTA tokens will not decrease; instead, by holding IOTA tokens the owner secures prioritized transactions in case the network reaches capacity limits in the future.

IOTA is frictionless

The absence of transaction fees means that data and value can be transacted for low to no costs. Data-related functions of the IOTA network are accessible to everyone. For example, when using the IOTA Identity framework, a decentralized identity can be created and verified through a small storage deposit. In the case of complex smart contract ecosystems, IOTA enables a native interconnectivity of those systems and their tokens, without the need to pay for risky bridge services.

IOTA is scalable

There is virtually no limit to the number of devices communicating on the Tangle. Unlike other architectures that process transactions one after the other in packages/blocks, IOTA’s Tangle technology provides parallel processing where transactions can be processed simultaneously. This enables IOTA to process over 1000 transactions per second, while Bitcoin can process seven and Ethereum is currently able to process 15 transactions per second, respectively. Adding more connected devices does not automatically incur additional costs for having to scale the related decentralized server infrastructure. To facilitate this scalability, IOTA is the only DLT that utilizes the principles of the Nakamoto Consensus in combination with the DAG, whereas most other DLT projects are forced to sacrifice decentralization (=number of validators) in order to improve scalability.

IOTA is being standardized

The IOTA Foundation works with the Object Management Group and other standards bodies like EPICS 2.0 to provide a high level of interoperability to other ecosystems. This is important to ensure that all network users and devices can understand and communicate with each other and to avoid any lock-in effect due to a closed system.

IOTA is permissionless and leaderless

IOTA’s permissionless solution means there are no gatekeeping third parties paid to validate transactions and secure the integrity of the ledger. Anyone can use the infrastructure without having to pay someone for it or asking for permission from gatekeepers. IOTA is also leaderless: its consensus doesn’t rely on a single or a few selected network participants. Instead, every node in the network reviews passing transactions and raises a flag in case of an anomaly, triggering other participants to vote on the potential conflict.

IOTA is open source

There is no requirement to enter into any dependency with the IOTA Foundation to benefit from the capabilities of IOTA technology and to contribute to the IOTA network. The network and related frameworks can be used free of charge and without the consent of anybody. All software by the IOTA Foundation is open source, to be reviewed and improved by a community of developers. In addition, about 180,000 community members contribute on various platforms by writing code, testing software, providing ideas and discussing the development of our projects.

IOTA is flexible

While many DLTs can be used as either a public ledger (permissionless) or a private ledger (permissioned), IOTA enables both. In a typical public blockchain, everyone can participate, whereas in a permissioned ledger every node that participates is pre-selected. But this solution is less decentralized and usually excludes the possibility of interaction with third parties. IOTA provides flexibility by offering both a public and a private Tangle, in which each transaction takes place in its own consortium or on-premise environment.

Tracking IOTA