IOTA — A non blockchain technology

The Technology

IOTA is one of the top 10 cryptocurrencies and has been in that standing over a good period of time. The teams main aim to facilitate a distributed ledger technology for the purpose of fee less transactions, which might majorly constitute Internet of Things (IOT) — engraved as part of the name of the currency.

As the title of the post mentions, IOTA does not use blockchain as its underlying technology. They use Tangle. There are few characteristics of Tangle that make it way better than Blockchain. Tangle uses DAG (Directed Acyclic Graph) to hold the transactions. DAG is a network structure in which information moves in one direction. In a Tangle, each new transaction is called a tip and a tip is placed at the edge of the structure. To be added as a tip, a transaction has to approve two previous tips. This is a main feature that makes Tangle a self evolving data structure and makes it highly scalable than blockchain. Also, it avoids usage of transaction fees which is basically charged by miners in blockchain for adding transactions to the chain. This allows for micro payments as low as 1 IOTA to be processed easily. Depending on the growth of the network, if there are millions of transactions happening on the network, the confirmation time of transactions is forecasted to be instant.

IOTA also uses Winternitz one-time signature (W-OTS) which is presumably unforgeable. This also makes it Quantum resistant (Super computers over powering miners).

IOTA has a coordinator which issues a milestone transaction every two minutes. This allows for the network to be secure until the necessary adoption has been reached. The team speculates they will be able to phase out coordinator in the near future.

There is no mining in IOTA. All the tokens were sold to public in their initial token sale. There is no pre-mined share that the IOTA team holds — even the team members had to buy in the tokens. This is a very novel way of token distribution.

Founders

David Sonstebo , Dominik Schiener

Pros

1. Fee less transactions.
2. Its built to be highly scalable — one of the major issues with current blockchains.
3. Quantum resistant (in future).
4. Instant transaction confirmations.
5. No mining. No pre-mined tokens.

Cons

1. Transaction confirmation times are right now dependent on the network strength.
2. Use of coordinator makes it little bit centralized.
3. They code in tertiary computing rather than binary — which most of the devices are using right now.
4. The team has posted a Microsoft partnership for their Data Marketplace which was not even official.
5. Their public dispute with MIT, when MIT Research Labs spotted vulnerability in their Curl P hashing algorithm. Although, its not being used in the protocol anymore.
6. IOTA is completely open sourced for contribution.

Competitors and why ?

1. Nano — Fee less and super fast transactions
2. Ripple — Fastest transactions with small amounts
3. Dash — Instant send feature
4. Cardano — In terms of Scalability
5. IOTChain — Targeting IOT market
6. WaltonChain — Targeting IOT market