A short introduction: I am Olaf, a software engineer with experience in databases, distributed systems, edge computing, graph theory and relevant for this article: IOTA.
I have been working for about two years with IOTA and I rarely use token transactions. I can honestly say that I actually never do it. I just use zero value transactions….
In relation to this, there is a question that comes up quite often when I and others talk about IOTA: What is the value or even reason for the IOTA token? “There are no fee’s and transactions can be sent for free, the innovation is the Tangle and doesn’t need the token. Value transfers can be easily done with another ledger like Bitcoin” as the argument.
In all honesty, most of the time I would even agree, though I know deep down this isn’t the whole debate. So let me try to explain.From local to global.
When writing software you often need to store some data. Generally, this data is stored in a database, a ledger. A register where you keep records of whatever it is that you need to store for your operations. For the sake of argument, we can state that all software that is capturing ‘value’ (doing something useful) runs a ledger in one form or another.
Be it Uber, a supply chain or the grades at your school. What matters most for all these systems is the order of events. A driver gets paid after drop off, a package gets shipped after it arrived at the dock and a student gets a grade after they finished the exam.
Order, however, is relative to the observer, in a single machine system the order is simple. But if two or more machines need to agree on the order of events or data observed things get tricky and complex very quickly. This is where consensus mechanisms come into play, mechanisms to agree on the order of events so that the interpretation of them becomes consistent… at reasonable speeds. Distributed ‘big data’ dat...