IOTA is a new transactional settlement and data integrity layer peer-to-peer decentralized cryptocurrency. The design behind this new system is based on a new distribution ledger known as the Tangle, which is design to overcome the challenges and improve on the efficiency of existing blockchains. Under Tangle, every transaction acts as an approval to two previous transactions, making IOTA scale proportionally with the number of transactions made per second and completely eliminates fees that would have been charged for the transaction. Tangle also introduces a new way for users to reach consensus in such a decentralized system. IOTA allows for small non-payments to be made through the platform. These reasons explain why IOTA is a perfect fit for use in the Internet of Things enabling interoperability between all devices.
IOTA coordinates a machine economy to fully emerge and attain its desired potential. There are two types of wallets in IOTA. Both wallets can be run as the full or light node. IOTA beginner users are recommended to use the GUI operated in light wallet mode, whereby your wallet is then connected to a server running IOTA IRI. To ensure the security of transactions made in IOTA, it is advisable to use different addresses as the security in IOTA decreases if two transactions are made in the same address. Getting a new address is relatively easy on the platform.
IOTA has an asynchronous network. The nodes do not necessarily see the same set of transactions. Tangle may contain conflicting transactions but in this case, a consensus has to be reached to decide which transaction will be discarded. However, the node does not have to achieve consensus to validate the transaction into the blockchain. To filter out one transaction the nodes run the transactions into tip selection algorithm multiple times, to get the transaction which is more likely to be approved by the selection tip. Therefore, when the transaction runs through 100 runs of the tip selection algorithm and subsequently gets selected 95 times, the transaction is said to have been confirmed with 95% confidence.
In the IOTA ecosystem, the nodes do not have motivation not to propagate. Each node calculates statistics from a transaction received from another node. If one node seems to be lagging behind, it’s dropped and replaced by another node to increase the validation rate. In general, Tangle is basically a Directed Acyclic Graph. The transaction issued by the nodes are included in the tangle graph for storing transaction. Since the system is designed to approve two previous transactions every time there is a new transaction, the approvals are then represented by direct edges. However, if there is no directed edge transaction between transaction A and B but there exists a direct path of length between transaction A and B, then transaction A is said to have indirectly approved transaction B.
What is IOTA blockchain? Pros and cons:
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