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on 20 February 2017

IOTA: IoT revolutionised with a ledger

Ever since the introduction of digital money, the world quickly came to realize how dire and expensive the consequences of centralized systems are. Not only are these systems incredibly expensive to maintain, they are also “single points of failures” which expose a large number of users to unexpected service interruptions, fraudulent activities and vulnerabilities that can be exploited by malicious hackers.

Thanks to Blockchain, which was first introduced through Bitcoin in 2009, the clear benefits of a decentralized and “trustless” transactional settlement system became apparent. No longer should expensive trusted third parties be used for handling transactions, instead, the flow of money should be handled in a direct, Peer-to-Peer fashion. This concept of a Blockchain (or more broadly, a distributed ledger) has since then become a global phenomenon attracting billions of dollars in investments to further develop the concept.

Even though the potential of this paradigm shift of using Blockchains and transitioning towards decentralized system architectures is known to many, the technical limitations of the Blockchain architecture are hindering further growth and adoption in key areas such as the Internet of Things, where millions of devices need to be able to transact with each other. A single Bitcoin transaction today costs on average $0.83 to make, which in turn means that micro-payments are rendered infeasible. Furthermore, the scalability of the entire network is limited to roughly 7 TPS (Transactions Per Second) – in comparison, Visa on average handles 2000 TPS. These intrinsic properties has made real world deployment of blockchain, where high throughput of transactions and scale matters, impossible.

The team behind IOTA, working on new Blockchain architectures and consensus protocols since 2011, has been developing for the past 2 years a completely new architecture built from scratch that resolves these inherent blockchain limitations while staying true to its core principles. With the invention of the Tangle, which is a completely new open source permissionless distributed ledger architecture, the team has introduced a secure, scalable and lightweight transactional settlement solution with zero fees to the industry. With specific focus on the Internet of Things and Machine-to-Machine Payments, the platform is positioned to become the standard layer for real time settlements and data integrity.

Collaboration with Canonical

The founders of IOTA started exploring machine-oriented microbilling to resolve one of the biggest pain points for connectivity in the realm of Internet of Things, and recognized that Canonical’s unique position and experience in this market was much needed expertise to bring it to life. Now Canonical is working with the IOTA Foundation on use cases that showcase new, machine-oriented business models and micro-billing solutions for the telecommunications market. With the global telecommunication market expected to reach more than $1.5 Trillion in revenue by 2020, IOTA together with Canonical are uniquely positioned to solve one of the biggest problems that telecom companies face today: how to reimagine billing for machines.

The telecommunications market has changed radically over the last decade, with OTT (Over-the-Top) players such as Netflix, Skype, Whatsapp and other service providers increasingly threatening important revenue streams of telco operators. To counter this disruptive competition, stakeholders need to look out for new markets and reshape their service offerings.

The Internet of Things offers exactly this rapidly expanding landscape for communication service providers (CSP’s) to explore new revenue and growth opportunities. With IoT connections expected to reach more than 1 billion by 2020, the need for a secure, cheap and scalable micro-billing mechanism is apparent to everyone.

What to expect at Mobile World Congress

At the Mobile World Congress you can expect to see a live demo of IOTA’s novel micro-billing solution. In collaboration with Canonical and Lime Micro, the telecommunication world will be introduced to the next generation of decentralized, trustless and machine-focused micro-billing. Combined with the concept of a software defined radio, we will showcase how new revenue opportunities for CSP’s and independent application developers alike will look like.

If you are interested to learn more about IOTA and how it can apply to your industry, reach out to the Team at the Canonical/Ubuntu booth in Hall P3 – 3K31 at Mobile World Congress. You can also reach out to them via Twitter or Email ( In a second blog post we will go into a deep dive into how IOTA works and how to actually use it in combination with snaps.

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