IOTA: A blockchain for the Internet of Things

Blockchains haven't had good press recently. Simple word-association connects 'the blockchain' to Bitcoin, Bitcoin to ransomware, ransomware to crime. So the blockchain is, to the uninformed, obviously a bad thing. On the other hand, technology evangelists around the world are touting the blockchain concept as the greatest invention since sliced bread, their predictions often based on nothing more than hyperbole and hope.

In reality the blockchain concept is neither of these things, of course. It's just a decentralised method of keeping track of transactions. If the blockchain is 'bad' or 'good' then so is ledger accounting and banking in general (discuss...) since they can be used for crime as well as for legitimate commerce. Blockchain is just a method of storing and verifying transactions independently of a central authority.

There's no shortage of startups involved in taking the blockchain concept out of Bitcoin and applying it elsewhere. Some of these will fail, some might succeed. One that seems more promising than most is IOTA, whose basic premise is to apply blockchain transactions to the Internet of Things. The aim is to allow IoT devices to exchange value between themselves – i.e. to make transactions – without a central authority.

If, as seems likely, almost every device we buy in the near future is to have internet connectivity, there needs to be some way of allowing those devices to transact between themselves. There's a huge potential value that would otherwise be wasted. IOTA uses the examples of a server with spare runtime for rent, or an electric car that needs to purchase a recharge.

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Alex Cruickshank

Alex Cruickshank has been writing about technology and business since 1994. He has lived in various far-flung places around the world and is now based in Berlin.  

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