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A Cryptocurrency Without a Blockchain Has Been Built To Outperform Bitcoin (technologyreview.com)
An anonymous reader quotes a report from MIT Technology Review: Bitcoin isn't the only cryptocurrency on a hot streak -- plenty of alternative currencies have enjoyed rallies alongside the Epic Bitcoin Bull Run of 2017. One of the most intriguing examples is also among the most obscure in the cryptocurrency world. Called IOTA, it has jumped in total value from just over $4 billion to more than $10 billion in a little over two weeks. But that isn't what makes it interesting. What makes it interesting is that it isn't based on a blockchain at all; it's something else entirely. The rally began in late November, after the IOTA Foundation, the German nonprofit behind the novel cryptocurrency, announced that it was teaming up with several major technology firms to develop a "decentralized data marketplace."
Though IOTA tokens can be used like any other cryptocurrency, the protocol was designed specifically for use on connected devices, says cofounder David Sonstebo. Organizations collect huge amounts of data from these gadgets, from weather tracking systems to sensors that monitor the performance of industrial machinery (a.k.a. the Internet of things). But nearly all of that information is wasted, sitting in siloed databases and not making money for its owners, says Sonstebo. IOTA's system can address this in two ways, he says. First, it can assure the integrity of this data by securing it in a tamper-proof decentralized ledger. Second, it enables fee-less transactions between the owners of the data and anyone who wants to buy it -- and there are plenty of companies that want to get their hands on data. The report goes on to note that instead of using a blockchain, "IOTA uses a 'tangle,' which is based on a mathematical concept called a directed acyclic graph." The team decided to research this new alternative after deciding that blockchains are too costly. "Part of Sonstebo's issue with Bitcoin and other blockchain systems is that they rely on a distributed network of 'miners' to verify transactions," reports MIT Technology Review. "When a user issues a transaction [with IOTA], that individual also validates two randomly selected previous transactions, each of which refer to two other previous transactions, and so on. As new transactions mount, a 'tangled web of confirmation' grows, says Sonstebo."
Though IOTA tokens can be used like any other cryptocurrency, the protocol was designed specifically for use on connected devices, says cofounder David Sonstebo. Organizations collect huge amounts of data from these gadgets, from weather tracking systems to sensors that monitor the performance of industrial machinery (a.k.a. the Internet of things). But nearly all of that information is wasted, sitting in siloed databases and not making money for its owners, says Sonstebo. IOTA's system can address this in two ways, he says. First, it can assure the integrity of this data by securing it in a tamper-proof decentralized ledger. Second, it enables fee-less transactions between the owners of the data and anyone who wants to buy it -- and there are plenty of companies that want to get their hands on data. The report goes on to note that instead of using a blockchain, "IOTA uses a 'tangle,' which is based on a mathematical concept called a directed acyclic graph." The team decided to research this new alternative after deciding that blockchains are too costly. "Part of Sonstebo's issue with Bitcoin and other blockchain systems is that they rely on a distributed network of 'miners' to verify transactions," reports MIT Technology Review. "When a user issues a transaction [with IOTA], that individual also validates two randomly selected previous transactions, each of which refer to two other previous transactions, and so on. As new transactions mount, a 'tangled web of confirmation' grows, says Sonstebo."
Now two other posters, please verify me.
It seems like the big problem with Bitcoin is hoarding, which discourages trade. How about a decentralized ledger without a "coin"? If you just had a secure, decentralized record of trades, *and* you could transact in less than a second, *and* you were simply creating a secure record of transaction in pre-existing currency *then* you'd have something that might compete with what the credit card companies and check clearinghouses do. Then you might actually reduce fees for the rest of us, even if we don't use it directly.
For all intensive purposes, "whom" is no longer a word. That begs the question, "who cares"?
There is no empirical evidence that 1% inflation is a 'good' thing for the economy - it's just a random target that seems justifiable easily. The ECB has a 2% target, in Australia the RBA officially targets 2 - 3%, but basically there is on science of the 'goodness' behind these figures.
Any inflation mostly benefits investors with debts and basically constitutes a wealth transfer from savers to investors (~ from poorer to richer).
The higher the inflation - the more unfair a society seems to be.
There is no empirical evidence that 1% inflation is a 'good' thing for the economy - it's just a random target that seems justifiable easily.
There is plenty of evidence and quite a lot of experience. We have centuries of real world data from the effects of various amounts of inflation and deflation on economies and every bit of evidence we have shows that a modest (1-3%) amount of inflation is the least worst option in most circumstances. Grossly oversimplified explanation: Deflation is almost always bad because it dis-incentivizes investment and creates perverse incentives. (why invest if your money will grow in value without the risk?) High amounts of inflation are bad because economic growth and wage growth cannot keep up and it wipes out the value of assets. Modest amounts of inflation force people to take reasonable risks to stay ahead of inflation but its low enough that economic growth can keep pace or get ahead. Maintaining zero inflation is as a practical matter essentially impossible and trying will result in dipping into deflation now and then which is worse for society than a small amount of inflation.
Any inflation mostly benefits investors with debts and basically constitutes a wealth transfer from savers to investors (~ from poorer to richer).
A wildly over simplified analysis if I've ever read one. There is quite a lot more to it than that.