This is not my work; I found this article to be interesting and thought others may find it interesting
IOTA's Tangle ledger is superior to cryptos relying on blockchain technology.
IOTA will need meaningful partnerships to advance, however the ecosystem shows extreme promise.
The price of IOTA has jumped, but it could run substantially higher with the right buy in from the tech world.
Recently we took you through a few ways to capitalize on the bitcoin (COIN) craze without actually investing in it the digital currency directly. A fruitful discussion about cryptos and crypto related investments ensued. A litany of cryptocurrencies were rattled off as potential investments, included litecoin, ethereum, ripple, zcash and bitcoin cash. However, one cryptocurrency was notably absent from the discussion, and has only been touched upon lightly by my colleagues. The purpose of the present column is to introduce our readers to IOTA, which we believe will make substantial moves higher in the coming months as it is somewhat flying under the radar, despite slowly moving its way to the top 100 list of cryptocurrencies over the last few months. We will discuss why the technology is in many ways superior to traditional blockchain technology, and why we think it has a real future.
what is IOTA?
IOTA is a play on the ‘Internet of Things,’ which of course is the basic idea of connecting any device to the internet, and to other devices. With this simplistic worldview of the Internet of Things, IOTA seeks to build and ‘Economy of Things.’ As the whole concept of the Internet of Things continues to gain ground, the goal of IOTA is connect businesses and their technological resources as something that can be traded. Think of it like peer-to-peer connections, for businesses/services to exchange resources.
The Tangle Ledger
We mentioned that IOTA is not traditional blockchain technology. You have heard of mining, validation, and transaction fees with blockchain. That doesn’t exist with IOTA. Simply put, the blockchain, in our opinion, will not be a reliable way to conduct billions of transactions a day, given the computing power, speed requirements, and fees, in an economy that is based entirely on digital currency. This may sound extremely ‘futuristic,’ but an economy where goods and services can be paid for and exchanged in a single environment is one key concept of cryptocurrencies. And in the longer-term, the blockchain approach will be inefficient (in large parts due to fees). The Tangle ledger gets around this, and as such IOTA is the first technology that enables real and meaningful micro and nano payments, because there are absolutely no fees, and it is fast. One key advantage here is scale. IOTA can scale up to the highest levels of volume, but blockchain cannot.
The Tangle is a third-generation distributed ledger, which relies upon the directed acyclic graphs, or DAGs. The Tangle is entirely ‘blockless’, and technically, chainless too. Directed Acyclic graphs have been used in a number of applications. We at Quad7Capital are most familiar with their utility in the field of epidemiology, where directed acyclic graphs are utilized to demonstrate confounding, or the mixing of effects, when assessing the relationship between an exposure and an outcome in the presence of several cofactors. How are DAGs utilized in the Tangle network?
Here is where it gets complex, but we will do our best to simplify. For the Tangle DAGs, there are two key terms to be aware of, sites and nodes. The ‘sites’ are the transactions of interest that will be represented by the DAG. The network of connected machines (businesses if you will) is made up of ‘nodes’. So, the nodes are essentially anything or anyone that issues or validates a transaction. The transactions that are being issued/validated by nodes make up the entire site for the Tangle DAG. This is the ‘ledger’ which is documenting the transaction.
Now, here is the beauty of the Tangle when it comes to verifying a transaction. When a new transaction comes in, the technology is set up in a way in which the present transaction must approve two previous transactions. Confusing right? However, this is where a visual of the DAG may help. Here is a simple DAG as shown in the IOTA white paper:
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Source:::https://www.google.com/amp/s/seekingalpha.com/amp/article/4131847-next-bitcoin-take-hard-look-iota
IOTA has taken a hit since the news came out about Microsoft. Interesting article.
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