How far are cryptocurrencies in the industry?

The Bitcoin crash last year has shown that even pure and decentralized currencies are not safe from a crisis. Nevertheless, the basic technologies such as Blockchain and Tangle continue to be worked on diligently. Which crypto currency is prevailing in the industry and where are the technologies already being used today?

Blockchain and Tangle: Where are the differences?

First of all, it is important to distinguish between the two best-known technologies in the crypto world. The blockchain technology, which has been successfully used in practice since 2008, has attracted the attention of a broader public, especially as Bitcoin. Even though the Bitcoin had its record value in the five-digit range already in 2017, despite the crash in 2018 it is still bracing itself for between 3,000 and 3,500 euros. In addition, blockchain technology is adopted by many other virtual currencies.

The Bitcoin is based on the blockchain principle: A decentralized system that uses miners and users to encrypt complex algorithms in blocks, thus enabling transactions – without banks or other institutions. In Tangle technology, which is younger and more complex, transactions are not built in blocks, but in a theoretically infinite network. The Tangle model comes from IOTA – a primarily nonprofit organization of young programmers – who want to realize the Internet of Things so often discussed. For a more precise version, unlike Blockchain and Tangle, see article  IOTA: The New Currency of Industry 4.0? from last year.

Blockchain is 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 minds behind blockchain systems: the blockchain consumes many resources, is sluggish and the transactions are with (albeit minor) Costs connected. In addition, there is the risk that the encryption in the blocks could be cracked in the future by quantum computers.

By contrast, IOTA has combined the advantages of a decentralized system with the performance of the network principle with its Tangle model, and now hopes for technologies such as 5G to also have the necessary infrastructure for IoT systems. The scalability of Tangle technology allows many transactions to occur simultaneously, which also allows for free microtransactions, such as those found in machine communication in a smart factory. In terms of security, too, at least IOTA itself assumes that the Tangle system is safe from quantum computers.

But which cryptocurrency is currently in demand in the industry and where are the big companies investing?

The interest of the industry is Ethereum

One of the most sought-after crypto-financial systems is currently Ethereum with the internal currency ether. Blockchain technology-based currency is the second-largest crypto-currency 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 US, JP Morgan, used Ethereum developers to develop its own block chain for the internal processing of data transactions in order to realize secure billing for business customers. Yale University in the US funded the Ethereum Foundation to develop an intelligent programming language for virtual machines. The elite university will 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 are less common in the Blockchain universe.

IOTA relies on marathon

Even though both cryptotechnologies have already been announced in terms of the Internet of Things and Industry 4.0, IOTA has more partnerships with technology and industrial companies. So there seems to be some skepticism about the long-term viability of Blockchain.

While the blockchain market is developing rapidly, despite its technological limitations, IOTA wants to avoid the sprint and instead only work with selected industrial partners on innovations. The current low value of the currency of IOTA, the so-called MIOTA, of significantly less than one euro means, among other things, that the Tangle model still lacks the necessary infrastructure (5G) and marketability 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 likely play a crucial role, especially in the IoT future. The World Trade Organization (WTO) comes to this decision,

Previous IOTA projects with VW & Co.

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

When it comes to the Internet of Things, IOTA relies on the technology group Bosch. The IoT department Bosch Connectivity works with IOTA to integrate IoT in everyday life. With Bosch XDK, a programmable sensor device the size of a credit card, and the Tangle technology to be realized among other applications in Industry 4.0. For example, this could be used to measure the exact useful life of a leased industrial machine and then charge it to IOTA. As the technology matures, many interesting applications 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 in some cases implements projects with companies such as Bosch, VW, Fujitsu or Orange SA. However, technology is still in its infancy and will become more important over the next few decades as the connected world becomes a corporate and private reality. In addition, infrastructure networks such as 5G must be deployed to enable fast data communication.

In short, IOTA has the potential to solve the current problems of blockchain technology, but it still takes time. Blockchain technology remains the leader in cryptocurrency – but the question is, how much longer?

 

 

Credits: https://www.ingenieur.de

Leave a Reply

Your email address will not be published. Required fields are marked *