Friday, May 27, 2022

The Bitcoin crash last year showed that even purely virtual and decentralized currencies are not safe from a crisis. Nevertheless, the basic technologies such as Blockchain and Tangle are being worked on diligently. Which crypto currency will prevail in the industry and where are the technologies already used today?

Blockchain and Tangle: what are the differences?

First of all, it is important to distinguish between the two most well-known technologies in the crypto world. The blockchain technology, which has been used successfully in practice since 2008, has attracted the attention of a broader public, especially as Bitcoin. Even if the Bitcoin had its record value in the five-digit range in 2017, it is still holding up bravely at 3,000 to 3,500 euros despite the crash in 2018. Also, blockchain technology is being adopted by numerous other virtual currencies.

Bitcoin is therefore based on the blockchain principle: a decentralized system that encrypts complex algorithms in blocks with the help of miners and users, thus enabling transactions without banks or other institutions. With Tangle technology, which is younger and much more complex, transactions are not set up in blocks but in a theoretically infinitely large network. The Tangle model comes from IOTA, a primarily non-profit organization of young programmers who want to realize the often talked about Internet of Things.

Blockchain is being questioned, IOTA is waiting

The problem of blockchain: After years of development, the idea of ​​a decentralized currency system has not yet died out, but several fundamental problems occupy the heads behind blockchain systems: The blockchain consumes many resources, is therefore sluggish and the transactions are with (albeit small) associated costs. There is also the risk that the encryption in the blocks could be cracked by quantum computers in the future.

With its Tangle model, IOTA, on the other hand, has combined the advantages of a decentralized system with the performance of the network principle and is now hoping for technologies such as 5G in order to also have the necessary infrastructure for IoT systems. The scalability of the Tangle technology means that many transactions can take place at the same time this also enables free microtransactions, which would be used in machine communication in a smart factory, for example. In terms of security, at least IOTA itself assumes that the Tangle system is safe from quantum computers.

Bitcoin scams: How to protect your cryptocurrencies from theft

The industry is interested in Ethereum

One of the most sought-after crypto financial systems is currently Ethereum with the internal currency Ether. The currency based on blockchain technology is the cryptocurrency with the second largest market capitalization after Bitcoin. This is not least due to the inquiries from various companies and the cooperation in recent months.

For example, the largest bank in the USA, JP Morgan, has developed its own blockchain for the internal processing of data transactions with the help of Ethereum developers in order to implement secure settlements for business customers. Yale University in the US granted a grant to the Ethereum Foundation to develop an intelligent programming language for virtual machines. The elite university is to invest a total of 400 million US dollars in the project. A Thai energy company, Bangchak Petroleum Public Company Limited, also relies on blockchain and is currently testing an energy trading platform based on this technology. Industry 4.0 projects, on the other hand, are less common in the blockchain universe.

While the blockchain market is developing rapidly, although it has technological limitations, IOTA wants to forego the sprint and instead only work on innovations with selected industrial partners. The current low value of the currency of IOTA, the so-called MIOTA, of significantly less than one euro also means, among other things, that the Tangle model still lacks the necessary infrastructure (5G) and market maturity to be able to grow faster. According to Dominik Schiener, one of the IOTA founders, the IOTA protocol is currently being further developed and adapted to the needs of the industry. The entire project is designed for long-term success and will probably play a decisive role, especially in the IoT future. The World Trade Organization (WTO), which describes IOTA as an “extremely advanced technology”, also came to this decision.


Nevertheless, the IOTA team has already developed the first prototypes and tests in cooperation with well-known companies. IOTA already announced in autumn 2018 that a so-called Digital CarPass from Volkswagen will be launched in 2019. This is intended to ensure reliable and secure vehicle data acquisition and is based on IOTA's Tangle technology. Other projects are also expected as part of the cooperation between VW and IOTA.

When it comes to the Internet of Things, IOTA relies on the Bosch technology group. The IoT department Bosch Connectivity works with IOTA to integrate IoT into everyday life. With Bosch XDK, a programmable sensor device the size of a credit card, and Tangle technology, applications in Industry 4.0 are to be implemented, among other things. For example, the exact useful life of a rented industrial machine could be measured and then billed by IOTA. When the technology is mature, many interesting areas of application in smart cities or smart homes could be added.

Can IOTA displace the blockchain?

At the moment IOTA is mainly working on the further development of its protocol and is partially implementing projects with companies such as Bosch, VW, Fujitsu or Orange S.A. around. However, the technology is still in its infancy and is more likely to gain traction over the next few decades as the connected world becomes a reality in businesses and homes. In addition, infrastructure networks such as 5G must be provided to enable fast data communication.

 

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The Bitcoin crash last year showed that even purely virtual and decentralized currencies are not safe from a crisis. Nevertheless, the basic technologies such as Blockchain and Tangle are being worked on diligently. Which crypto currency will prevail in the industry and where are the technologies already used today?

Blockchain and Tangle: what are the differences?

First of all, it is important to distinguish between the two most well-known technologies in the crypto world. The blockchain technology, which has been used successfully in practice since 2008, has attracted the attention of a broader public, especially as Bitcoin. Even if the Bitcoin had its record value in the five-digit range in 2017, it is still holding up bravely at 3,000 to 3,500 euros despite the crash in 2018. Also, blockchain technology is being adopted by numerous other virtual currencies.

Bitcoin is therefore based on the blockchain principle: a decentralized system that encrypts complex algorithms in blocks with the help of miners and users, thus enabling transactions without banks or other institutions. With Tangle technology, which is younger and much more complex, transactions are not set up in blocks but in a theoretically infinitely large network. The Tangle model comes from IOTA, a primarily non-profit organization of young programmers who want to realize the often talked about Internet of Things.

Blockchain is being questioned, IOTA is waiting

The problem of blockchain: After years of development, the idea of ​​a decentralized currency system has not yet died out, but several fundamental problems occupy the heads behind blockchain systems: The blockchain consumes many resources, is therefore sluggish and the transactions are with (albeit small) associated costs. There is also the risk that the encryption in the blocks could be cracked by quantum computers in the future.

With its Tangle model, IOTA, on the other hand, has combined the advantages of a decentralized system with the performance of the network principle and is now hoping for technologies such as 5G in order to also have the necessary infrastructure for IoT systems. The scalability of the Tangle technology means that many transactions can take place at the same time this also enables free microtransactions, which would be used in machine communication in a smart factory, for example. In terms of security, at least IOTA itself assumes that the Tangle system is safe from quantum computers.

Bitcoin scams: How to protect your cryptocurrencies from theft

The industry is interested in Ethereum

One of the most sought-after crypto financial systems is currently Ethereum with the internal currency Ether. The currency based on blockchain technology is the cryptocurrency with the second largest market capitalization after Bitcoin. This is not least due to the inquiries from various companies and the cooperation in recent months.

For example, the largest bank in the USA, JP Morgan, has developed its own blockchain for the internal processing of data transactions with the help of Ethereum developers in order to implement secure settlements for business customers. Yale University in the US granted a grant to the Ethereum Foundation to develop an intelligent programming language for virtual machines. The elite university is to invest a total of 400 million US dollars in the project. A Thai energy company, Bangchak Petroleum Public Company Limited, also relies on blockchain and is currently testing an energy trading platform based on this technology. Industry 4.0 projects, on the other hand, are less common in the blockchain universe.

While the blockchain market is developing rapidly, although it has technological limitations, IOTA wants to forego the sprint and instead only work on innovations with selected industrial partners. The current low value of the currency of IOTA, the so-called MIOTA, of significantly less than one euro also means, among other things, that the Tangle model still lacks the necessary infrastructure (5G) and market maturity to be able to grow faster. According to Dominik Schiener, one of the IOTA founders, the IOTA protocol is currently being further developed and adapted to the needs of the industry. The entire project is designed for long-term success and will probably play a decisive role, especially in the IoT future. The World Trade Organization (WTO), which describes IOTA as an “extremely advanced technology”, also came to this decision.


Nevertheless, the IOTA team has already developed the first prototypes and tests in cooperation with well-known companies. IOTA already announced in autumn 2018 that a so-called Digital CarPass from Volkswagen will be launched in 2019. This is intended to ensure reliable and secure vehicle data acquisition and is based on IOTA's Tangle technology. Other projects are also expected as part of the cooperation between VW and IOTA.

When it comes to the Internet of Things, IOTA relies on the Bosch technology group. The IoT department Bosch Connectivity works with IOTA to integrate IoT into everyday life. With Bosch XDK, a programmable sensor device the size of a credit card, and Tangle technology, applications in Industry 4.0 are to be implemented, among other things. For example, the exact useful life of a rented industrial machine could be measured and then billed by IOTA. When the technology is mature, many interesting areas of application in smart cities or smart homes could be added.

Can IOTA displace the blockchain?

At the moment IOTA is mainly working on the further development of its protocol and is partially implementing projects with companies such as Bosch, VW, Fujitsu or Orange S.A. around. However, the technology is still in its infancy and is more likely to gain traction over the next few decades as the connected world becomes a reality in businesses and homes. In addition, infrastructure networks such as 5G must be provided to enable fast data communication.