IOTA May Eventually Out-Blockchain The Blockchain

Blockchain technology is no longer a secret code known only by black-hat hackers and underground splinter groups. Instead, the nascent technology is being deployed on what seems to be a limitless number of industry platforms and financial corporations. With all this massive adoption of Blockchain, some have argued that it is the technological equivalent of the internet, and will disrupt everything.

However, one company believes that Blockchain just the first iteration of a distributed technology that will eventually take over all data exchange throughout the world. That company, called IOTA, has created a technological upgrade to blockchain technology that it calls ‘Tangle,' and is hyped as ‘out-block chaining the blockchain.'

The Tangled Web?

Tangle is not blockchain technology. Instead, according to its creators, it is the ‘next step in evolution’ of the blockchain technology. Tangle is a system of interconnected nodes that simultaneously validate transactions to participate in the network. This means that validation is, in itself, the means of creating transactions, and vice versa. The system in this way is self-validating, and self-regenerating.

Why is this important as an upgrade from traditional blockchain technology? The answer is multifaceted. First and foremost, the Tangle system provides a methodology for transactions that can be processed and verified on the distributed ledger without paying transaction fees.





Tangle creates a massive web of interconnected nodes, all of which are validating transactions to create transactions. Rather than the bifurcation of ‘miners’ and ‘users’ as in traditional blockchain iterations, Tangle unites these groups into single nodes, each of which functions to create, build, and validate the ledger.

Wow…That Was Fast





The second issue that is plaguing blockchain technology is scaling. Scaling refers merely to increase the number of transactions the blockchain can manage per second. Currently, the Bitcoin blockchain can handle approximately 7-12 transactions per second. The problem with this system is that it is radically tricky to scale.

Because transactions are validated in ‘blocks’ (hence the name), the block size limits how many transactions can be validated at a time, creating a system where transactions have long validation times.

Tangle, on the other hand, creates a web of transaction validation nodes.

That means that each transaction must only be verified by the previous two transactions before it, and can, therefore, be validated at the speed that’s radically faster than anything the traditional blockchain is capable of producing.

However, not only does the rapid validation process occur, but it also has the same level of security and trust that traditional blockchain systems maintain. Because each transaction is required to confirm two previous transactions before itself being validated, the interconnectedness of the distributed ledger is supported, and any variation is immediately known.

When variation appears (that is, non-validated transactions), they can be immediately eliminated from the ledger for non-validation reasons. In this way, the trust of the interconnected node system is maintained, and the resultant ledger is ‘distributed’ and entirely immutable, as with the traditional blockchain platform.

I Guess It Works…

Should users have any doubt about the validity of the Tangle system, the recent agreement to handle microtransactions and data control for a massive number of partner corporations should remove all doubt. The deal, which includes names like Microsoft, Fujitsu, Bosch, Deutsche Bank Telekom, will enable business-to-business data interactions.

The participants have sent the IOTA cryptocurrency (MIOTA) through the roof in recent days as the reality that the company’s system is gaining massive traction for IoT and data usage internationally has been sinking in. The price for the coin has risen 300% in just the last week, with substantial upward pressure continuing.

Whether IOTA’s Tangle system is the answer for data transfer on the internet of things remains to be seen. However, it appears clear that the need for blockchain technology and its derivatives will continue into the future.



