What Is IOTA?

IOTA is the next generation and revolutionary new public distributed ledger that utilizes a novel invention, called "Tangle", at its core. The Tangle is a new data structure based on a Directed Acyclic Graph.

As such it has no Blocks, no Chain and also no Miners. Because of this radical new architecture, things in IOTA work quite differently compared to other Blockchains.

what is iota

The major difference that is worth mentioning (apart from the DAG vs. Blockchain) is how IOTA achieves consensus and how transactions are made. As mentioned previously, there are no miners. What this means is that each participant in the network that wants to make a transaction has to actively participate in the consensus of the network by approving 2 past transactions.

This attestation on the validity of two past transactions ensures that the whole network achieves consensus on the current state of approved transactions, and it enables variety of unique features that are only seen in IOTA.

IOTA is the missing puzzle piece for the Machine Economy to fully emerge and reach its desired potential. We envision IOTA to be the public, permissionless backbone for the Internet of Things that enables true interoperability between all devices.

IOTA has a range of features that are uniquely enabled due to its architecture:

Scalability: IOTA can achieve high transaction throughput thanks to parallelized validation of transactions with no limit as to the number of transactions that can be confirmed in a certain interval

No Transaction Fees: IOTA has no transaction fees.

Decentralization: IOTA has no miners. Every participant in the network that is making a transaction, actively participates in the consensus. As such, IOTA is more decentralized than any Blockchain.

Quantum-immunity: IOTA utilized a newly designed trinary hash function called Curl, which is quantum immune (Winternitz signatures)

Getting Started With IOTA

IOTA is a cryptocurrency designed for the Internet of Things. But before we get into why the Internet of Things needs IOTA, lets look at what IOTA can offer to the existing cryptocurrency scene. (Don’t worry, we will return to the internet of things later). IOTA has 4 HUGE advantages over Blockchain cryptocurrencies in that it is:

How is this achieved?

The technological breakthrough that makes this possible is The Tangle (which looks something like this).

Unlike Bitcoin which uses a blockchain architecture for maintaining it’s ledger, IOTA uses the ‘Tangle’ which is a Directed Acyclic Graph, known as a DAG. In summary the Tangle solves both the scalability and transaction fee issues faced by Bitcoin (And most cryptocurrencies) by requiring the Sender in a transaction to perform a kind of proof of work which approves two transactions.

what is iota

Thus, the act of making a transaction and validating transactions are coupled. This removes dedicated miners and makes the system fully decenteralised – those making transactions (the systems ‘users’) are the only actors who can affect the system (whereas in bitcoin miners are not ‘using’ the system, rather they are simply enabling it to operate).

The remarkable result is that in IOTA, the network transaction speed INCREASES as the number of users increases (as opposed to blockchain cryptocurrencies which get slower with increased numbers of users). It also eliminates the need for users to pay ‘miners’ for doing the proof of work (because they do it themselves). Thus there is no Fee to make a transaction!

what is iota

So far, so good. IOTA looks to be Fee less and scalable. This alone makes IOTA incredibly promising as a technology for a huge number of applications.

But it doesn’t stop there. IOTA has been under development since 2015 (Announcement Thread) and in that time industrial partnerships have been forged which will ensure that IOTA has practical, real world use.

How To Get A IOTA Wallet?

Different Node/Wallet types in IOTA

In the guide below you will learn which type of IOTA node or wallet is right for you.

You can then use our knowledge base at the bottom of the page to access tutorials for each option.

If you don't understand any IOTA related terms, check out our Glossary!

When getting started with IOTA it can be very hard to understand the difference between a light and a full node and which wallet types there are. IOTA Support has tutorials for all options but it is important to understand the differences first!

Full Node (GUI): This is an IRI (IOTA Reference Implementation) running and being accessed locally via a GUI. Any full node needs to be connected to neighbours via a static IP in order to function. Learn how you can run a full node and how they help the IOTA ecosystem in our GUI tutorials!

Headless Node: A full node running in your local console. You can access it via a simple UI called Nostalgia in your browser. It has the same requirements as a GUI full node, but has the advantage that you can open multiple Seeds (Accounts) at the same time.

Light Wallet (GUI): A local interface that accesses a full node (IOTA Node) in a different environment (e.g a node on a server; Please note: Your Seed NEVER leaves your computer). Learn how to run a light node in our Lightwallet tutorials!

IOTA App Wallet

Download NodeJS

Install Electron:

npm install -g electron

Install Bower:

npm install -g bower

Windows Users Only

Run the following command as Administrator:

npm install -g --production windows-build-tools


If you wish to compile the app, install the following also:

Install Electron Builder

Electron Builder is used behind the scenes. Read their instructions on how to set up your system.

Install Docker


Clone this repository:

git clone https://github.com/iotaledger/wallet

Go to the wallet directory:

cd wallet

Clone iri:

git clone https://github.com/iotaledger/iri

Note: make sure compiled iri.jar is in the iri folder.

Install components

npm install

Run the app:

npm start

If you wish to compile the app:

npm run compile

If you'd like to create a package only for a specific OS, you can do so like this:

npm run compile:win

npm run compile:mac

npm run compile:lin

Compiled binaries are found in the out directory.


To build testnet binaries, rename package.testnet.json to package.json and follow instructions as above. Make sure the jar is named iri-testnet.jar.

GUI (full node) Knowledge Base

Headless node (full node)

If you don't understand IOTA related terms, check out our Glossary!

The requirements for a headless node are a static IP, IP adresses of your future neighbours and a computer that's running near 24/7 (in order to stay synchronized with the network)!

Furthermore you will need to download Nostalgia, a simple UI for your browser (running only locally), with which you can access your node.

Light Wallet Knowledge Base

A Light Wallet is the easiest way to send and receive IOTA. You have two options to run one!

IOTA Resources

How To Buy IOTA?

IOTA on Bitfinex

Step 1: Create an account using an account name, your e-mail and a secure password

Step 2: Insert this referral code for reduced trading fees: ********

Step 3: Create account and verify your e-mail

Step 4: Once logged in, select 'Bitcoin' under balances and then 'Deposit'

Step 5: Send your Bitcoin to the address provided and wait for it to confirm and be shown in your balance

Step 6: Once confirmed, use the order form to place a bid for IOTA

It is important to note that IOTA is listed on Bitfinex in Miota units (1 Miota = 1,000,000 iota)

How To Earn IOTA?

Step 1: Join the Slack-Channel slack.iotatoken.com

The IOTA Slack channel is essential. It provides you with information on updates, bugs and you can buy IOTA there (more explained in detail in the following steps). Make sure to join the sub-channels trading, botbox, and releases.

Step 2: Download the IOTA wallet

You can find the latest version of IOTA, which is currently 1.0.3, at GitHub. To easily find it use either the link in the releases-channel of Slack (in which all future updates of the wallet will be announced) or you simply klick on this one: https://github.com/iotaledger/wallet/releases

You can get help installing it for your system here: https://iota.readme.io/docs/general

Step 3: Start your IOTA wallet

After installing and starting it, this screen should pop up:

Now, in order to create an account you need to generate a Seed (Password). The Seed is ONLY consisting of capital Latin letters and the number 9. The maximum length of the Seed is 81 characters and it is recommended you make a Seed with the maximum length.

You can either think of a new one from scratch or click on Tools-->Generate Seed. Then enter your Seed and press the "Login" Button. You are now in your new account. Make sure to unhide the Status Bar by clicking View-->Show Status Bar. This is essential for the next step.

Step 4: Synchronizing with the Network

After having you account you are NOT ready to use you wallet. First, it needs to synchronize. This is done by simply letting you wallet open and running in the background. To check if your wallet is ready to go, you need to compare the numbers showed in the Status Bar with the latest numbers posted by the so called "Coordinator" in the botbox on Slack.

The Status Bar in the wallet shows the following: XX(X)/YYYYYY (ZZZZ). The YYYYYY are the transactions while the (ZZZZ) are the milestones. Make sure that the transactions and the milestones show coincidence with the latest numbers posted by the Coordinator bot before making any transactions. If the numbers match, you are set up and can use your wallet!

Important note on receiving IOTA:

Before you use your address to receive IOTA, make sure to press "ATTACH TO TANGLE". It will take a while for your address to be attached to your tangle (while showing the words "GETTING TIPS"), but after that you are ready to receive IOTA on this address.

Author's note on synchronizing:

I personally had the problem that at first the transactions were accelerating fast towards the numbers the Coordinator posted, but the closer I got, the longer it took. I ended up having the correct amount of milestones, while I was still behind on transactions.

I asked about this in the forum and was told that the milestones are the important thing and I should try the wallet. It worked! So if you have the same problem just ask someone to send you a small amount of IOTA and see if it works.

Step 5: Buy IOTA

If you want to buy IOTA, visit the trading channel on Slack. In this channel there is an trading bot operating. See the available commands by typing "OTC" (capital letters are necessary). Then simply create an ASK position or message people selling IOTA.

Where To Spend IOTA?

This correlates well with the information presented on IOTA’s website. If these claims are proven to be true, IOTA would perhaps be the most interesting innovation to ever emerge from this space.

This post will not go in to extreme detail about how IOTA works or what a DAG is, since there are plenty of other resources online (website, whitepaper, github). Instead, here’s an extremely short and simplified version:

The IOTA ledger is constructed as a tree, where the root node (“node” here simply refers to a position in the tree — has nothing to do will network nodes) is the equivalent to the “genesis block”, and every subsequent transaction creates a new node in the tree.

From the genesis node, all iotas that will ever be created were distributed to a group of addresses participating in the original ICO in 2015. For a person to extend this tree, his transaction must point to two randomly chosen previous transactions in the tree, and include a tiny Proof-of-Work hash. This creates an ever-growing tree representing the ledger.

When he has selected the two previous transactions, he also verifies them by making sure they also include the required Proof-of-Work and that they neither directly nor indirectly extend what would constitute a double-spending transaction in the tree.

To choose which branch of the tree to extend upon, he follows a specific MCMC-based algorithm, and as long as the majority of the other users follows the same algorithm, the tree will diverge into the same direction as a result.

This direction is then secured over time through the extension of more tiny Proofs-of-Works added by each new transaction. Further, the system only provides any security guarantees in the case that an attacker does not amass more than 33% of the hashpower of the network.

This means that IOTA in its current form does not provide any censorship resistance, since the path of the tree is centrally directed through a Coordinator node run by the IOTA Foundation. As such, IOTA is no more decentralized than an Apache Kafka cluster, or Ripple and their Unique Node List.

This also opens up IOTA to double-spend attacks from the Coordinator itself, which I submitted an issue about. The issue was closed with no response. 3 months later, I got the explanation from IOTA co-founder that such an attack would be “not rational”, albeit indeed possible.

What Is IOTA Mining?

You can't mine IOTA for the time being, the only way to acquire them is to buy or purchase them through exchanges which has been discuss above. In the future it could be possible and will be updated right away on this article.

Latest IOTA News

The IOTA Foundation will be established. Now some might ask the eligible question: What is the foundation, what do they do, and why are these news so great? Behind the IOTA Foundation are the developers of IOTA (David Sønstebø, Dominik Schiener, Serguei Popov, Sergey Ivancheglo and probably three more; see 3rd link below), who will push the project further, introduce IOTA to the public and do development.

The reason behind the news of the establishment being awesome is easily explained: The requirement for the establishment of the foundation was that a minimum of 5% of all IOTA tokens would be donated to it in a certain period of time (being in the foundation is a half/fulltime-job and people don't work for free).

This minimum amount has now finally been reached (after the time period for donations was expanded). The foundation will do the following (quoting David Sønstebø, see link #3 below):

"A complete IOTA Foundation roadmap and website with more detailed information will be published later in the week, but here is a brief summary:

1. Initiate C and RUST core client development.

2. Attend Internet-of-Things and Blockchain/Distributed ledger conferences and hackathons in the coming months in active role ( E.G. presentations about IOTA ).

3. In collaboration with some big holders give out development-bounties.

4. Be able to strengthen the brand and raise awareness of IOTA in all capacities.

5. Bring on companies and organizations, especially those focused on Internet-of-Things and blockchain.

6. Essentially realize the vision which started the R&D of IOTA

7. Be the de facto public organization behind IOTA"