IOTA is a public distributed ledger that stores transactions in a , called a Tangle.[1][2] IOTA is a designed specifically for the Internet of Things (IoT) that can be used for the secure and feeless microtransactions between machines and devices.


IOTA was co-founded by , , , and in 2015. The IOTA white paper was written by and published on December 28, 2017.[3]

According to the IOTA whitepaper :

The importance of micropayments will increase in the rapidly developing IoT industry, and paying a fee that is larger than the amount of value being transferred is not logical.

It was designed from the ground up to have absolutely no . The network is able to achieve consensus with no transaction fees with the use of Tangle technology.



The Tangle is the term coined for IOTA's network base, which utilizes a structure. It is basically the IOTA's network, using . Instead of being packaged into blocks and chained one after another, IOTA’s transactions are connected in a big tangled web.


Rather than having mining farms whole , each user verifies the past two transactions with a tiny amount of work before they can send their own transaction. In this way, the cost of each transaction is the cost of electricity it took the to verify the past transactions rather than a fee set by a network of miners.

Since Tangle technology doesn’t have blocks, one doesn’t need to wait for verifications. Transactions are mined in parallel, and as a result happens instantly. In the Tangle, each transaction confirms two previous transactions, creating a decentralized and scalable network.[5][6]

Feeless Transactions

IOTA transactions are feeless. Users do not need to pay transaction fees to send or receive IOTA tokens. This feeless nature makes it suitable for microtransactions in IoT and other use cases.

IOTA’s Network Resilience

Tangle technology network is resilient to quantum computing and also to the (or attack).

34% attack-resistant

It was said that, if an attacker had access to 51% of network power, they could take over the . However, 34% was enough to take over the entire network, required total hashing power. Because of IOTA’s network topology, there are three things that are required in order to perform such an attack:

  • A percentage of the network hash rate
  • Having a full view of the network
  • Being paired with a certain percentage of nodes

A full view of the network is required in order to propagate the rogue hashing power effectively throughout the network. Finally, that hashing power must be paired with a sufficiently high percentage of nodes in order to actually propagate the attack successfully. If the attack isn’t performed fast enough, the network will easily see the anomaly and ignore the threat.

While there is a chance that an attacker may gain enough hash power and be paired with a large enough amount of nodes, the Tangle network topology is kept private because connections between nodes are private. Thus, it would be unlikely that such attack would take place.


Because of the use of Winternitz hash-based signatures instead of elliptic curve cryptography, it’s being resistant to the quantum-based computing. IOTA uses hash-based functions because, they are much more secured against quantum computing.

IOTA Token

The IOTA token is the native cryptocurrency of the IOTA network. It is used as a means of transferring value and as a reward for participating in the network's .


MIOTA(Mega IOTA) is a unit of the of IOTA. In the IOTA network, the native cryptocurrency is called IOTA. 1 MIOTA is equivalent to 1,000,000 IOTA. It is commonly used to represent larger amounts of IOTA in a more manageable way.

IOTA Foundation (IF)

In 2017, early IOTA token investors donated 5% of the total token supply for continued development and to endow the IOTA Foundation.

In 2018, the IOTA Foundation was chartered as a Stiftung(or a foundation) in Berlin to assist in the research and development, education and standardisation of IOTA technology. The IOTA Foundation is a board member of International Association for Trusted Blockchain Applications (INATBA), and founding member of the Trusted IoT Alliance and Mobility Open Blockchain Initiative (MOBI), to promote and distributed ledgers in regulatory approaches, the IoT ecosystem and mobility.

IOTA 1.5 (Chrysalis)

Chrysalis is an upgrade for the IOTA network, aka IOTA 1.5. The Chrysalis upgrade was divided into two phases:

Chrysalis Phase 1

Chrysalis Phase 1 was implemented on the IOTA in August 2020. This phase brought several improvements to the network, including:

  • Enhanced transaction throughput and confirmation times.
  • Reduced network congestion and transaction backlog.
  • Improved security and reliability.
  • Introduction of UTXO (Unspent Transaction Output) model for better wallet and exchange integration.
  • Support for reusable addresses, which made transactions more user-friendly and reduced the chance of human errors.

Chrysalis Phase 2

Chrysalis Phase 2 was the second and final part of the upgrade, introduced to the on 28 April, 2021. This phase focused on further enhancing the IOTA network with features like:

  • Introduction of atomic transactions, enabling multiple transactions to be bundled together and executed atomically.
  • Implementation of a new signature scheme (Ed25519) to improve security and usability.
  • Improved support for hardware wallets and application interfaces.
  • Removal of obsolete features to streamline the protocol.

The Chrysalis upgrade of IOTA project paved the way for the eventual transition to IOTA 2.0 (Coordicide), which aims to remove the Coordinator-a temporary centralized component that had been used to secure the IOTA network during its genesis, and achieve complete decentralization.

IOTA 2.0 (Coordicide)

Coordicide refers to the initiative to remove the Coordinator- a temporary centralized component that had been used to secure the IOTA network during its genesis. Its made to achieve a fully decentralized IOTA network by eliminating the need for the Coordinator altogether.

The Coordinator was initially introduced as a security measure to protect the network from potential attacks and vulnerabilities while it was still in its infancy. However, its presence led to criticisms that IOTA was not truly decentralized, as its operation relied on this centralized entity.

Coordicide is used to achieve decentralization and security through a mechanism, IOTA 2.0 protocol, aka IOTA 2.0, aka IOTA 2.0 DevNet. This protocol introduces the concept of a decentralized distributed ledger, a new consensus mechanism, Fast Probabilistic Consensus(FPC), and a reputation system that helps validate transactions.

Coordicide introduces Sharding to enhance scalability. Sharding is a technique where the Tangle is split into smaller, more manageable partitions, allowing for higher throughput.

By implementing Coordicide and transitioning to IOTA 2.0, the IOTA network is expected to operate autonomously, securely, and without the need for centralized control or coordination. It will be able to handle a higher number of transactions, making it more scalable and suitable for real-world applications on a global scale.

Shimmer Network

The Shimmer network was launched on September 28, 2022 as a staging ground for tests and validation of future innovations on the IOTA protocol. The network mirrors the IOTA protocol, and is run entirely with the use of SMR, its native token. Upgrades on the IOTA protocol are tested on the Shimmer network before moving to the IOTA protocol for .

At the launch of the Shimmer network, IOTA's Stardust Tokenization Protocol upgrade made its debut, which was made to go through community validation and testing on the Shimmer network.

The compatibility of Shimmer network and the Stardust upgrade framework on the IOTA protocol allows it to become scalable and useful as a multi-chain architecture. Developers can leverage these functions to build decentralized that retain composability. Given that Shimmer operates on Tangle Distributed ledger technology(DLT), transactions run on its network using its native token and NFTs would also be  feeless and scalable.


On July 24, 2023, the IOTA Foundation introduced the 'iota-sdk 1.0', the first stable version of its newly introduced rust-based project. The IOTA SDK is a project built using Rust that offers an easy and effective method to connect with nodes in the Shimmer and IOTA networks, both of which are operating on the Stardust protocol. Besides, the SDK comprises two main modules- client and wallet. IOTA SDK also has an upgraded version of IOTA’s CLI-wallet.

The IOTA SDK comes with 3 main crates:

  • ‘types’- to implement different Tangle Improvement Proposals (TIPs).
  • ‘client’- to contact nodes and build stateless blocks.
  • ‘wallet’- in order to manage different user accounts, tokens, addresses, and assets.


The major features of the IOTA SDK include client modules, wallet modules, and bindings.

Client Module

The client module offers low-level functions that gives a precise control over the interactions with Shimmer nodes. This module is stateless, ie., it doesn’t store any information about past interactions. It also provides access to the underlying API endpoints and allows advanced operations like custom message construction and direct communication with the network.

Wallet Module

The wallet module offers convenient functions for managing accounts, generating addresses, creating transactions, and interacting with the Shimmer network. It provides an easy-to-use interface that developers can use to build applications on the Shimmer network.

Unlike the client module, this module is stateful, i.e., it keeps track of past interactions. It can also optionally work with IOTA Stronghold for secure seed handling, storage, and state backup.


The IOTA SDK comes with Python, Node.js, and WASM bindings, allowing developers to use the SDK in their liked programming language. These bindings also ensure easy integration with the on-going projects, providing compatibility across different platforms and offering flexibility to suit the developers’ needs.

Hack/ Vulnerabilities

Microsoft partnership scandal

In November 2017, IOTA was said to have a partnership with Microsoft. The organization was later derided when it clarified no formal partnership existed.[6]

Curl Controversy

Although IOTA doesn’t require mining, transactions are still securely stored by computer 'nodes' using a cryptographic algorithm called SHA-3 . This operates similar to Bitcoin’s SHA-256 algorithm to create a chain of transaction records that are stored on full network nodes. The nodes don’t actually receive any of IOTA’s tokens (MIOTA) for their work. This has resulted in some debate about how IOTA will solve this lack of incentive to run a node.

In the beginning of IOTA’s development, it actually used a hashing function, Curl which was custom-built by the IOTA development team. However, Curl was replaced with a new and more secure hash function called Troika, after an MIT team from Boston University found a potential vulnerability in the algorithm in August 2018, potentially compromising the security of certain cryptographic elements in the IOTA network.

This sparked a huge controversy, in which, the IOTA development team was widely criticized for handling the situation poorly, and for over-reaching when they tried to create their own algorithm. Many argued that a cryptographic algorithm must be widely available and tested for years prior to being released to verify the algorithm’s security.

Trinity Wallet Hack

In February 2020, the IOTA Foundation reported a security incident involving its official desktop wallet, Trinity. The Trinity wallet was compromised due to a vulnerability in the third-party library used for QR code generation. As a result of the hack, some users' funds were stolen from their wallets.

The IOTA team immediately asked the users to address the issue, and they advised users to change their passwords and secure their accounts. They also released a patched version of the Trinity wallet to mitigate the risk.


Sweden Riksbank, Sweden's central bank, in September 2017 announced that it is investigating the use of digital currencies, the E-krona project.

The Riksbank has started this project with a concern regarding the declination in use of banknotes and coins in society, while, virtual currencies and payment methods are undergoing rapid technological development. Therefore, they have started a project aimed at examining whether the krona needs to be issued in an electronic form, an "e-krona".

Among the 33 proposals submitted to Riksbank, only 19 organisations were invited to a dialogue with Riksbank. The IOTA Foundation was among one of the 19 organisations invited to the dialogue.



In December 2017, Bosch announced it has purchased a significant number of IOTA tokens to support creation of new business models for the Internet of Things.[17]


In January 2018, IOTA announced a partnership with the International Transportation Innovation Center (ITIC) to build a global alliance of smart mobility testbeds. This comes as ITIC validates a Proof of Concept for dynamic electric vehicle charging showcased by NetObjex Inc in Smart Metering solution using the IOTA decentralized network and cryptocurrency in October 2017.[18]

Tangle EE

IOTA Foundation has hooked up with the Eclipse Foundation to bring IOTA DLT to the enterprise via the Tangle EE project, involving the forming of a working group. On 11 February 2020, the Eclipse Foundation and IOTA Foundation jointly launched the Tangle EE (Enterprise Edition) Working Group.

Tangle EE is the part of the project aimed at enterprise users, that can take this technology and enable larger organizations to build applications on top of the project.

The main reason why we created Tangle EE was because of the discussions that we’ve had with corporations. They really understood that we need to have a working group around IOTA to discuss the application layer, to discuss what kind of solutions we can develop broadly across industries, but also really start having more serious discussions about the protocol

, said.

Tangle EE currently coordinates two separate Eclipse projects which are implemented on top of IOTA technologies.

  • Tangle Identity- It allows to use the Tangle to implement self-sovereign identifiers (SSI), distributed identifiers (DIDs) and verifiable credentials.
  • Tangle Marketplaces- It allows to leverage the Tangle to build data and other exchange-based ecosystems, i.e., market places.


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