Sites and NodesĪ Tangle is composed of sites and nodes. The Tangle allows each transaction to be processed individually, rather than simultaneously, and even allows for them to be processed asynchronously. The team behind IOTA decided to use a DAG rather than a blockchain because they believed it would help resolve many of the scalability and cost problems associated with a blockchain. Instead of a blockchain, IOTA is powered by a DAG called the Tangle. This means that there is no need for anybody to mine tokens in order to ensure the integrity of the blockchain.Īs such, all IOTA tokens were created at launch with a fixed supply of 2,779,530,283,277,761 tokens. Unlike most cryptocurrencies, IOTA does not use a blockchain. These features are designed to make IOTA uniquely suited to being utilized by IoT devices. Hash-based signatures also help simplify the signing and verification process and help reduce the overall complexity of the Tangle protocol. This uses hash-based signatures that are generally faster than elliptic curve cryptography (ECC). Quantum ProofĪnother feature of IOTA is the so-called Quantum Proof. This theoretically allowed the Tangle to accommodate an infinite number of devices. The Tangle gets around this by processing each transaction individually.īefore any transaction can be processed it needs to process two others, either directly or indirectly. If they can’t all go into a block then they have to wait for the next block to be processed. This causes problems when there are a lot of outstanding transactions on the network. When transactions are processed in a blockchain they are all grouped together and processed at once. This means that miners are not necessary to maintain the integrity of the network and, thus, fees associated with mining are eliminated. The Proof of Work required to process these transactions is so low power that essentially any device is capable of doing so. The Tangle gives IOTA two main advantages over traditional blockchain technology:Įach transaction must process two other transactions before it can be accepted on the network. To do this, IOTA looked away from the blockchain and opted to use a different kind of technology – a Directed Acyclic Graph (DAG) called the Tangle. To provide a solution that is fit for the IoT, IOTA needs to ensure that it is scalable, can process transactions quickly, and can process micro-transactions without burdensome fees. Bitcoin and other blockchain-based cryptocurrencies run into scalability issues and the fees required to make a transaction mean that sending a micro-transactions (of $0.01, for example) is unviable. Traditional blockchain technology is not particularly well suited for the IoT. IOTA is designed to offer a solution to this problem by creating a fee-free cryptocurrency that can operate on the most humble of devices. Unfortunately, at present, there isn’t a way for those companies to purchase this information. These devices all generate a lot of data that non-related companies might find useful. IoT devices have become an increasingly important part of the world economy. IOTA is a cryptocurrency designed to operate as the backbone of the Internet of Things economy. Popov, Serguei, and Ivancheglo helped complete the mathematics and programming behind the unique Tangle system. IOTA began in 2015 when it was founded by a team consisting of David Sønstebø, Sergey Ivancheglo, Dominik Schiener, and Dr. IOTA uses a directed acyclic graph (DAG) called Tangle to solve the scalability problems that plague Bitcoin and to facilitate free micro-transactions between Internet of Things devices. It is regarded as an attempt to move cryptocurrency beyond the blockchain. IOTA (MIOTA) is the first cryptocurrency to take advantage of devices connected to the Internet of Things (IoT).
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