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The Amazing Backstory of the IOTA Cryptocurrency

March 8, 2018

IOTA is a $5 billion market cap cryptocurrency designed specifically for the Internet of Things (IoT). Instead of a blockchain, it’s a public distributed ledger stores transactions in what’s called a directed acyclic graph (DAG) structure; what IOTA terms a “Tangle.” IOTA’s revolutionary blockless distributed ledger technology is lightweight and scalable, enabling value transfer without any fees.

 

Dominik Schiener, 22-year-old cofounder of IOTA, recently had this to say about that start of his entrepreneurial journey on a recent YouTube post: "I have always been on a quest, hustling to bring out a product that I created to make money, because I don't want to rely on anyone. I actually started out with drop shipping on eBay, using my sister's eBay account to sell software … I had my own e-commerce store and made like 20,000 euros back then. But it was a hustle always having to move a new product. I needed to have a very reliable income stream, and I decided that I shouldn't just be hustling. I should focus on a single product. That is when I discovered Bitcoin. I had a lot of AWS credits. You know that that in order to create a new coins in blockchain you have to put up some hashing power. I was able to mine bitcoins and the alternative currencies as well. I was still in high school, 16 years old, when I made my first 100 thousand euros worth of bitcoin. And the price of bitcoin kept going up."

 

Schiener later lost 500,000 euros, the money that he eventually made in bitcoin profits as 17-year-old German, in an attempt to set up a trading platform for cryptocurrencies in Switzerland. He blames the failure of his first company on the business environment vis a vis cryptocurrencies at the time. "Digital currencies and the blockchain were not relevant enough yet. Many associated with it were drug dealers and other dark businesses, and no bank wanted to give me an account for the company."

 

Even after that crushing defeat, with his newfound wealth wiped out, Schiener somehow avoided a fall into depression and remained a true crypto enthusiast. He moved back into his parents' house and immediately started looking for a new opportunity. Schiener recalls, "Although I lost all my money, I was still convinced of cryptocurrencies. My first startup failed and that was a lot of hardship. I realized this is not the end; it's just the beginning. Luckily I came across another startup focused on creating new hardware specifically for the Internet of Things, hardware for machines to actually pay each other.”

 

Schiener cofounded IOTA with the owner of that IoT startup in 2015. IOTA has grown in value from nothing in 2015 to a cryptocurrency that today has a market cap of $5 billion.

 

Schiener said in an interview with Bloomberg on Tuesday, "Following the involvement of some German companies such as Volkswagen AG, the next growth phase for IOTA is now starting. Many still perceive IOTA as a German cryptocurrency, and we want to change that." From his Berlin base with 50 employees, Schiener is now opening IOTA offices in Oslo, Taiwan, Tokyo, and Toronto.

 

Schiener's IOTA Foundation steers the development of the underlying IOTA blockchain technology. The foundation has the money to do so, with an astounding 300 million euros in its treasury in the form of IOTA tokens. Perhaps even more amazing is that the money was donated to the foundation by fellow IOTA users. The IOTA Foundation is especially focused on developing the IOTA blockchain technology to enable automatic micro-payment transactions between machines, such as a payment between a car and a gas pump.

 

Johann Jungwirth, Chief Digital Officer of Volkswagen Group, is an example of the kind of talent on the IOTA Foundation supervisory board. Volkswagen said in a statement from its spokesperson that "He (Johann Jungwirth) oversees the annual roadmap of the foundation. Jungwirth is convinced of IOTA, the technology and its relevance for various applications in the context of mobility."

 

RBVC, the venture capital division of the Bosch Group, said about its investment in IOTA, "Bosch sees several promising approaches in the IOTA architecture, especially with regard to the internet of things."

 

Volkswagen and Bosch have both declined to get into specifics about the development projects in which they are engaged with IOTA. Even so, the IOTA story promises to become even more intriguing as time goes on. You can start your own IOTA journey at https://iota.org.

 

 

 

By: BGN Editorial Staff

 

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