Thread by @HolgerKoether

If you are new to #crypto, #blockchain, #dlt or #metaverse let me help you understand "Why #IOTA??"

Let's take a small tour:

Maybe you have one of those devices below at home.
They are getting smaller and more intelligent "to do stuff" directly.

Doing voice recognition directly on the phone is a good example for that: tcrn.ch/3EwloVp
Or also the #Tesla autopilot.

And this is great. Because intelligent devices mean better automation. Which saves costs. A LOT of costs.

But often implementations are insecure, get hacked or a central system goes down. Like when #Tesla users had no access to their cars (bit.ly/3ms2KI8).

So: Why not outtask 'security stuff' to a globally available data backbone which is never down by design? Everybody could use it and tap into it. Automation.

But the challenge is HUGE. With more devices online we are looking at potentially millions of interactions per second.

Enter the stage: #Blockchain:
A distributed, immutable trust layer, digital identities, no middlemen, cryptocurrencies for payments... awesome!
Not only for IoT, but for #DeFi, gaming etc. connecting millions.
So you ask: "But what's the problem? We have blockchain today!"

Remember the IoT example above? It's not only IoT any more, but has evolved into the #metaverse. We need capacity to interconnect billions of humans, organizations and devices securely, to really automate.
The problem: blockchain does not scale to the demand. But there's more:

High fees make it uneconomical. $20 per transaction is a hard no. How should that scale in business?
Low capacity, high energy use... But why is that so? Let's take a closer look behind the curtain of #blockchain:

A block is a container for transactions ("tx"). Only a limited number can fit into one block. They "fight" for space in the block. Pay more, get added faster. Fee too low? Please wait for the next block. Or the next. Or the next...

Simplified: that is because the validators (who secure the chain) want to get paid. So they pick & include the tx with the highest fees. When a block is full, it's shared in the network. This takes time. There are trade-offs, e.g. fewer validators -> faster decision making, BU...

Fewer validators mean you have to trust them more. Also not good. We want a distributed but secure system. That's called the Trilemma. ATM every blockchain trades off 1 feature to improve the other 2.
But we want more. Oh, also no tx fees and no energy waste pls.

Enter #IOTA. IOTA is not based on slow expensive blocks or miners or chains. It uses another underlying principle, to directly link transactions together. Not in blocks but directly. Users confirm other users tx directly.
The big advantage:

1) It's very green (the energy of 1 #bitcoin is equivalent to 600 Million to 1B #IOTA tx).
2) Tx happen in PARALLEL. Not sequentially like in a blockchain. No need to wait for a block. Scalability.
3) No miners to pay -> No transaction fee!

The implications are huge! Why?

Without having to pay fees, we can suddenly send data for free. A lot of data in many transactions. Cryptocurrency (IOTA Token) is also natively "baked in".
This enables highly scalable and free to low-fee DeFi applications, digital identity, secure data sharing + MANY use-cases

We're building #IOTA as an ecosystem, to truly solve the technical challenges of blockchain: high fees, few validators, low throughput, energy waste, but especially scaling, where even 64 or 120 "subchains" won't be enough.

If you made it this far: thank you.
ATM an awesome community is already building a #DAO, #DeFi, and many other exciting projects on #IOTA. Join us on discord.iota.org.
I don't have a soundcloud, but if you want to dive into it, I'd recommend these links:

How #IOTA works: v2.iota.org/how-it-works/i…

Intro to the IOTA business ecosystem:
blog.iota.org/an-intro-to-th…

@hus_qy's 4 part series on scalability: husqy.medium.com/a-new-consensu…

If this was helpful, let me know, I'd be happy to dive into more IOTA aspects, eg the novelty of IOTA SC's.
👋