[ Blockchain Column ] What is IOTA?

Hillstone Finance
2 min readApr 18, 2024

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According to Reuters, IOTA has become the first virtual asset foundation to be officially registered in the Abu Dhabi Global Market (ADGM), a global financial free zone in the United Arab Emirates (UAE). Following this news, IOTA saw a 60% surge in value. This achievement reflects high interest and expectations for IOTA in the Internet of Things (IoT) sector.

IOTA offers a revolutionary distributed ledger technology for transactions between IoT devices, which is fundamentally different from traditional blockchain technology. The core technology enabling this is the Tangle algorithm. Tangle processes transactions without the need for blocks or chains, enabling feeless transactions and enhancing scalability and security.

One of IOTA’s key features is enabling transactions between IoT devices, a challenge that was difficult to address with centralized systems or traditional blockchains. Through Tangle, IOTA processes real-time transactions between devices securely, enabling new business models in the IoT sector.

The operational principle of IOTA is based on the Tangle algorithm, which confirms and processes transactions without blocks or chains. This novel approach results in faster and more cost-effective transactions compared to traditional blockchain technology.

IOTA also prioritizes privacy protection. It applies a mixer function to protect the privacy of transaction participants while maintaining transaction transparency. Additionally, it uses Masked Authenticated Messages (MAM) technology to ensure secure data transmission through encryption and access control.

The IOTA Foundation plays a crucial role in advancing the IOTA project. It promotes research and collaboration in blockchain, distributed ledgers, and the Internet of Things. Moreover, the IOTA Foundation enhances security and privacy protection through the Stronghold framework, providing users with a safe environment.

In summary, IOTA provides innovative distributed ledger technology for the Internet of Things sector, offering scalability and security. It employs a different approach from traditional blockchain technology, enabling fast and secure transactions. IOTA is expected to make significant contributions to the development of the Internet of Things sector in the future.

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