What is IOTA?

 When Bitcoin was first released to the world in 2012, it started a revolution. People claimed that the blockchain would solve many problems and that it has countless applications. Blockchains indeed have very interesting properties and you can learn all about them in this content here. However, they have one big limitation and that is that they don't scale very well.

This is exactly the kind of problem that the creators of IOTA wanted to solve. Instead of using a blockchain, IOTA uses something called a DAG or tangle. Dag is short for directed acyclic graph and it is a storage system where individual items link to each other.

 Directed means that the link between these items always has a direction, and cyclic means that you cannot create loops inside the structure. This might sound complicated, so let's take a look at a simple tangle. Each square represents a single transaction and is also called a site. Each site contains all the details about the transaction, such as the sender, the receiver and the number of coins that were transferred.

 It also has a connection to at least two other transactions. These are called edges and they validate the transactions. Here is an example of a bigger tangle. Near the end of our tangle, we find a few transactions that don't have two or more incoming edges. This means that these transactions are unconfirmed. We also call these the tips of the tangle. All right, now that we understand some of the IOTA terminologies, let's take a look at how we can add a transaction to the tangle. We have to attach our new transaction to one of the tips of the tangle. An algorithm selects 2 of them at random and makes sure that transactions don't conflict with one another. If one of the tips is a fake transaction, it is ignored and a new tip is selected. If everything checks out, we attach our transaction to the two tips.

 This answers the transaction to the tangle and verifies two other transactions and our transaction now becomes a new tip of the tangle. This technique makes iota's tangle incredibly scalable. For every transaction that is added to the tangle, two others are confirmed. This means that the network doesn't slow down when there are a lot of transactions. In fact, it actually speeds up. Now that's all great, but how can we know we can trust the transaction? In traditional blockchains, people often use the number of confirmations to check whether or not a block should be trusted. While IOTA has a similar technique, each site has a weight. This number signifies the amount of work that a node has done to make this transaction. In other words, a higher number means that the nodes spent more time doing the proof of work for that transaction.

 Each transaction also has a cumulative weight. This is the sum of its own weight plus the sum of the weights of all transactions that approve this transaction. It seems quite complicated, but it really isn't. Here is an example of a tangle where every transaction has a weight of 1. We'll put the weight of an individual transaction in the bottom right of each square.

 Now let's check how trustworthy this pink transaction is by calculating its cumulative weight. To do that, we sum up the weight of the two transactions that have been approved it. But those transactions were approved by other transactions as well. So we keep summing up all of these weights until we get to the end of the tangle. In this case, the cumulative weight of the site is 6. Transactions with high cumulative weight are usually older and have more direct or indirect verifications, so we can trust those transactions more than others. So now you know what iota's tangle is and how it works. But how does it stack up against traditional blockchains while the tangle solves 2 big issues, scalability and miners?

 Let's discuss scalability. As we've seen, Iota's network becomes faster when more transactions happen. This means that IOTA can handle almost an unlimited amount of transactions per second, while traditional blockchains can only handle a few. But there is another aspect to scalability that most people seem to forget, and that is storage. In a blockchain, you need a full copy of the chain before you can start adding new transactions.

 Right now the Bitcoin blockchain is almost 150 gigabytes in size and keeps growing very fast. Storing all this data is not something that every device can do and it will get harder over time. Iota's tangle is much more lightweight. You don't need a full copy of the tangle to add transactions, you only need a small part of the tangle to create and verify transactions. This makes it much more future-proof.

 And finally, IOTA has no miners. Usually, miners are there to create blocks and validate transactions. For this hard work, miners take a fee from each transaction. In IOTA, no miners mean no fees. Sending money around is thus completely free. So now you know how IOTA's tangle works and how it compares to regular blockchain technology. If you like this content, please give it comment below, Thank you very much for reading.