What is IOTA crypto and what is it used for?

IOTA crypto is a network and token originally designed to let machines and devices exchange data and tiny payments, the idea known as the Internet of Things. Its first design, the Tangle, worked differently from a normal blockchain. In May 2025 the network was rebuilt as a proof-of-stake layer 1 blockchain, and today its main focus is digitizing trade.

What is the IOTA Tangle?

IOTA was created in 2015 by David Sønstebø, Dominik Schiener, Sergey Ivancheglo and Serguei Popov, and the network went live in 2016. Instead of grouping transactions into blocks, it stored them in a web called the Tangle, a type of distributed ledger known as a directed acyclic graph.

There were no miners. Each new transaction had to approve two earlier ones, so senders paid no fees. That made very small payments between devices possible in theory.

In practice the network relied on a node run by the IOTA Foundation, the Coordinator, to confirm transactions. Critics said this made IOTA centralized. The weakness showed in February 2020, when the Foundation switched the Coordinator off after thefts from its Trinity wallet, which halted the whole network until March 2020.

What is IOTA Rebased?

IOTA Rebased is the upgrade that replaced the old network on May 5, 2025. According to the IOTA blog and documentation, it:

• Removed the Coordinator and introduced delegated proof of stake, where validators secure the network and token holders can delegate their IOTA to them. See what a validator is.
• Added smart contracts written in the Move language directly on the main network.
• Introduced small fees, which the docs put at about 0.005 IOTA on average. Fees are burned.
• Made the supply inflationary. New IOTA are minted as staking rewards, an initial rate of roughly 6% a year, partly offset by the fee burn.

Holders did not need to migrate tokens, but the old Firefly wallet stopped being supported.

What is IOTA crypto used for today?

The IOTA Foundation's 2025 review shows the focus shifting from devices to trade paperwork and identity:

• TWIN. The Trade Worldwide Information Network, a separate foundation, builds systems for sharing verified trade documents and is set to run on the IOTA mainnet in 2026.
• ADAPT. IOTA is a founding technology partner in a project with the African Continental Free Trade Area Secretariat, the Tony Blair Institute and the World Economic Forum to digitize trade across Africa. The review says three countries had confirmed deployments.
• Identity and DeFi. Open-source identity tools and a small group of DeFi apps for staking, swaps, stablecoin borrowing and perpetual futures.

The IOTA token pays fees, is staked to secure the network and is used to vote on changes.

Is IOTA still an Internet of Things coin?

The Internet of Things was IOTA's original pitch, but the Foundation's 2025 review does not mention it. Plans for 2026 include a new consensus engine called Starfish. As with any crypto project, as of October 2026 its roadmap can change, and the token's price can be highly volatile.