IOTA is a revolutionary new, next generation public distributed ledger that utilizes a novel invention, called a “Tangle”, at its core. The Tangle is a new data structure based on a Directed Acyclic Graph. As such it has no Blocks, no Chain and also no Miners. Because of this radical new architecture, things in IOTA work quite differently compared to other Blockchains. For a Blog post outlining IOTA in more detail, you can head over to our Blog.
The major difference that is worth mentioning (apart from the DAG vs. Blockchain) is how IOTA achieves consensus and how transactions are made. As mentioned previously, there are no miners. What this means is that each participant in the network that wants to make a transaction has to actively participate in the consensus of the network by approving 2 past transactions. This attestation on the validity of two past transactions ensures that the whole network achieves consensus on the current state of approved transactions, and it enables variety of unique features that are only seen in IOTA.
IOTA is the missing puzzle piece for the Machine Economy to fully emerge and reach its desired potential. We envision IOTA to be the public, permissionless backbone for the Internet of Things that enables true interoperability between all devices.
IOTA has a range of features that are uniquely enabled due to its architecture:
- Scalability: IOTA can achieve high transaction throughput thanks to parallelized validation of transactions with no limit as to the number of transactions that can be confirmed in a certain interval
- No Transaction Fees: IOTA has no transaction fees.
- Decentralization: IOTA has no miners. Every participant in the network that is making a transaction, actively participates in the consensus. As such, IOTA is more decentralized than any Blockchain.
- Quantum-immunity: IOTA utilized a newly designed trinary hash function called Curl, which is quantum immune (Winternitz signatures)
In the following sections, we will take a deep dive into some of the important features and principles behind IOTA.
IOTA IS CURRENTLY IN BETA
It should be noted that IOTA is currently still in Beta. This means that the current Java implementation is a reference implementation. Major improvements to performance, features as well as ease of use will be made over the coming months.