However, a dishonest node may issue a very high double spending transaction with a large own weight. Basically, transactions with higher weights are more important in a Tangle. The more a transaction is approved by other nodes directly and indirectly (higher weight), the more likely it is to be approved by an honest node. Solves the problem of double spending-In a tangle, weights of conflicting transactions are calculated. Again, instead of motivating ‘nodes’ through rewards to approve transactions, the nodes have to work at approving previous transactions in order to be able to issue their own transactions. In the bitcoin protocol, every miner who validates transactions in a block, has to broadcast the value of a nonce to the network such that SHA 256 hash of the block header must be lesser than the target. The miner can reward herself for finding the nonce and get paid by users who are broadcasting their transactions with transaction fees. IOTA solves the problem that occurs in cases of micropayments, specifically in terms of M2M transactions where it’s likely that transaction fees will be greater than the amount of cryptocurrency being transferred. In order to issue a valid transaction the node must present its proof of work- To find a nonce, where the hash of the nonce concatenated with approved transaction data, should give output in a specific format. If a neighbor has not approved transactions, it can be dropped by its neighboring nodes. In Tangle-in order to issue a transaction, a node has to approve other transactions as well.Moreover, every node calculates the number of new transactions received by a neighbor. In a blockchain network-an approving node gets paid in bitcoins based on the transactions it approves. Each node that issues a transaction has to approve previous two transactions, thus contributing to the network’s security. The tangle is a Distributed Ledger based on Directed acyclic graphs(DAG)as opposed to Blockchain which is a chain structure. IoTA uses the Tangle for storing transactions just like Bitcoin uses Blockchain for storing transactions. As of today it ranks seventh.ĭespite the articles on the IOTA network security vulnerabilities ,‘fake’ partnerships with major corporates, Tangle-a 3rd generation distributed ledger, an alternative to blockchain with associated benefits leaves little room for doubt on its potential. A few days ago, IOTA overtook Ripple and Litecoin to become the fourth most popular cryptocurrency.
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