IOTA is a cryptocurrency traded on most major exchanges under the symbol MIOTA. While it has a value tied to the supply and demand of its coins, like other cryptocurrencies, it was built with the purpose of enabling the exchange of large amounts of data for the Internet of Things rather than just being a store of value. It also deviates from most other digital assets in that it was created by a non-profit organization, The IOTA Foundation, and is essentially an open source initiative.

IOTA has already been used in a few notable projects, the largest being the City of Taipei’s smart city projects to create a secure citizen ID cards that could easily verify identities and even carry the holder’s personal and health information on it.

What allows IOTA to scale more quickly than other crypto platforms is its “tangle” technology. Rather than having every piece of information stored at every data repository, or node, as is the case with Bitcoin, the tangle verifies data through only a handful of other nodes. Nodes are given a “cumulative weight” by how many other nodes approve it, giving them extra validation as the amount of transactions grows. This system is meant to speed up the processing of info and provide for fee-free transactions that would allow the enormous amount of data processed by the global internet of things to function without financial restraint.

As promising as the tangle technology might be, it has been quite controversial in the crypto space. MIT’s Digital Currency Initiative put out a paper outlining IOTA’s vulnerabilities to attacks. The IOTA Foundation responded with a refute of the analysis and an official statement calling for MIT to back up their claim. More recently a tweet from the executive director at Open Privacy that exposed that the network was down because “someone is stitching the side tangle to the main tangle” leading to a break in the nodes’ ability to select tips.” Tips are the new transactions that have no other transactions referencing them. All this is a very technical way to say that, for some reason, the system wasn’t working.

IOTA Board of Directors member Ralf Rottmann was quick to respond. He said that the problem was likely because “Tangle DB growing too big for the available desk space” saying:

“People continually try to attack the tangle, and we learn from these attacks to make it more resilient over time. Remember, IOTA is an early-stage project and these kinds of events are par for the course. As long as someone can get such a large percentage of hash power, they can do whatever they like. This is true for any DLT, and the exact reason we have the coordinator ensuring that tokens are safe during this early period.”

There has also been a number of concerns about the “wallet” designed to keep users info. After releasing the Beta some testers reported problems that exposed important info. IOTA has released upgrades to the wallet called Trinity to address the flaws but some say that the fix gives IOTA too much power over user’s info:

“A hole was then found in IOTA’s wallet – it lacked a seed generator to help users produce keys and control their own coins. This allowed malicious actors to exploit the user-generated keys and steal $4 million worth of MIOTA. On top of this, IOTA devs were able to seize user funds, something not possible on projects like Bitcoin or Ethereum.”

Despite all the controversy IOTA continues to be used on large projects. It will be tested in a number of European cities in an EU funded Smart City Project to create “positive energy cities.” The tangle technology is also being used for the base of an energy trading platform in Japan. They are also in a “proof of concept” stage with Volkswagon to see how it can be integrated into their vehicles.

IOTA might be the innovation that makes IoT data sharing and marketplaces affordable and secure. It has gotten a lot of attention for its size, at just under $3 billion dollars in market cap it is currently the 9th largest cryptocurrency. But for it to become the enabler of the IoT of the future, it will have to pass some rigorous tests and prove that it can stand up both to critics and those that stand to gain from attacking the system. In a world where sensitive data is being recorded in every household and street corner, those who could gain from that information becomes a rather long list.