Unsupervised Machine Payments Have Become A Reality With IOTA

Both DLT and IoT are some of the biggest fields in emerging technologies and are seeing wide adoption across different verticals. However, there is one company that functions at the intersection of both these emerging technologies.

IOTA is a platform that aims to bring together the Internet of Things using Distributed Ledger Technology. The platform was created with the aim to create a place for valid data to be accessed, with only a single source of truth for the data.

This comes from the philosophy that only valid data is usable and that all the data that will be collected from the IoT boom should be valid for use in the future.

An Upcoming Data Explosion?

Currently, the number of IoT devices in the world is growing at breakneck speed, as smart homes become more and more viable. Smart home devices such as Google Home and Amazon Alexa are just the beginning of connected homes, with many other devices starting to become smart as well.

This is not just a trend seen in the household, however, as there are multiple applications for IoT. Some of these include smart cities and grids, better traffic management, decentralized identity systems and a machine ecosystem.

Some estimates put the number of connected devices at 75 billion by the year 2025. This means that the already large volume of data flowing through the world’s networks is going to be compounded by more data.

While it is easy to assume that the infrastructure for this future movement will be built, it is a much more complex than to scale directly.

The amount of data will not be contained within the infrastructure that will be created, as there are inherent physical problems with collating so much data. The primary dimension of this problem would be to synchronize a common version of the truth with hundreds or thousands of stakeholders.

Added to this, data will continue to become siloed by big corporations, thus reducing its usability. Resources such as electricity, compute and storage space will also be at a premium, owing to a large amount of data created every second.

Synchronize And Provide A Single Vision Of Data

As mentioned previously, IOTA is a DLT that is used for a singular vision of data flow. It functions on a system known as the ‘Tangle’ which features novel features such as zero-fee transactions.

Using zero-fee transactions, IoT devices are able to share multitudes of information with each other, not only including data. This can also be how to access certain resources or utilize them effectively to create a distributed network.

This is denoted by a term known as ‘fog’ or ‘mist’ computing, where the amount of resources across the world has to be distributed across the various devices that wish to use it. Effective unsupervised communication between connected devices will be the key to achieving seamless collaboration between the machines.

Added to this there is also the concept of the machine economy that can be brought about by the Internet of Things. This can also be called the Internet of Value, and denotes many connected devices interfacing with each other for the optimal usage of resources.

What Is The Tangle

The DLT powering IOTA’s networks is known as the Tangle. Instead of a traditional blockchain architecture, validated Tangle transactions are connected using ‘edges’. The validation occurs only when two previous transactions on the edge are validated.

The network does not have mining nodes, but still functions on Proof-of-Work algorithm. An algorithm known as Hashcash ensures a low power PoW process is performed by every node on the network, ensuring compatibility with IoT devices while increasing the security of the network.

The low power of the PoW consensus mechanism allows even low-powered IoT devices such as Raspberry Pis or even chips within cars and other objects to still be a part of the IOTA network. As per the nature of PoW, the security of the network increases with the number of nodes performing the calculations.

Moreover, as the system has a financial basis, it also boasts of other features such as micro-transactions for pay-as-you-go applications, masked authenticated messaging and resistance to quantum algorithms. Moreover, it is also extremely scalable, due to its decentralized and discrete nature. The more devices on the network, the faster it will grow.

The Sharing Economy Brought About By IOTA

IOTA’s zero-fee economy model is also aimed at revolutionizing multiple other applications as well, such as a well-established sharing economy of everything. Their theory is that everything will be smart in the future, allowing for a fine-grained sharing economy between businesses and customers.

Moreover, connected devices themselves can share information on the network regarding payments in a secure manner. The model of IOTA incentivizes a move towards a ‘pay now, use now’ model, as the zero fee economy incentivizes machines to pay each other.

This leads to applications such as cars paying for themselves while refuelling, or paying for a movie for only as long as the user requires. It can also be used to shift to a more sustainable economic model, as users will only pay for what they use as opposed to trust-based models.


Zeen is a next generation WordPress theme. It’s powerful, beautifully designed and comes with everything you need to engage your visitors and increase conversions.

More Stories
6 Ways Businesses Can Take Advantage of IoT