A Complete Guide to Tangle Technology
Tangle Technology
Tangle is the transaction storing and
processing mechanism of IOTA, a Cryptocurrency network that was developed to enable
fee-less micro-transactions for the growing ecosystem of Internet of
Things (IoT) devices.
Tangle is the other name to describe
the IOTA’s directed acyclic graph (DAG). It is a data integration and
transaction settlement layer developed to focus on the Internet of things
(IOT). Tangle acts as a string of individual transactions which are
interconnected to one another and stored in a decentralized network node of the
participants.
The Tangle, which is
the data structure behind IOTA, is a particular kind of directed graph, which
holds transactions. Each transaction is
represented as a vertex in the graph. When a new transaction joins the tangle,
it chooses two previous transactions to approve, adding
two new edges to the graph.
How does IOTA Tangle Work?
With new cryptocurrencies
appearing, and disappearing every single day, it is becoming increasingly
difficult to know which currencies are worth investing in, and which ones are
not.
For those that are just starting
out, it can be a somewhat daunting prospect, particularly when you factor in
the technological jargon, and concepts that work hand in hand with this type of
innovation. IOTA is one of these currencies, and Tangle is the system that
it works on.
Tangle technology is trying to
solve scalability problem with a totally different technology. Tangle is made
by sites (transactions on the DAG graph) and Nodes (Issuers of transactions).
The verification process is set up, that newly issued transaction is obligated
to approve two old transactions. As a result of this solution, the responsibility of
verification transactions belongs to everyone, who issue a new transaction. In
conclusion, Tangle allows to process transactions in the network without miners
and transaction fees.
Blockchain vs Tangle
The
brilliance of the Tangle is that transactions are processed in parallel. The
Tangle differs from blockchain in two main ways:
- IOTA is able to achieve high transaction throughput by parallelizing validation. As the Tangle grows with more transactions, IOTA becomes faster and more secure with transaction finality happening more quickly as network critical mass is approached.
- The way consensus is achieved in a blockchain Technology is through a rigorous mechanism that requires multiple parties to “race” against each other in an attempt to add the next block and earn the block rewards. Since “miners” and “users” are decoupled entities, block rewards paid to miners will eventually mostly consist of users’ transaction fees. In the Tangle, “miners” and “users” are no longer decoupled entities.
Pros:
Transaction fees: There are
none, sort of. The cost of writing to the Tangle is performing proof-of-work on
two other transactions. There is no “gas” cost or needing to “tip” miners in order
to get your transaction faster. In fact, “mining” isn’t even a thing for the
Tangle. There isn’t a need for it.
Scalability: The
fundamental bottleneck of normal block chains like Bitcoin
or Ethereum
is the time it takes to achieve consensus by creating new blocks. The Bitcoin
blockchain can only handle 3-4 transactions per second. Ethereum, around 15-20.
To date, Tangle has seen transaction spikes well into the hundreds of
transactions per second. However, it theoretically scales infinitely as larger
and larger numbers of devices are writing data.
Lightweight: The core
idea behind Tangle is that even devices with very low computing power, like a toaster,
can write data to the Tangle, and therefore perform proof-of-work in a
reasonable amount of time. How this is achieved gets into “snapshotting”, which
is the subject of another blog post.
Data Marketplace: IOTA gives
you the ability to sell your data by giving people the ability to subscribe to
your data for very small amounts of money. This is a powerful concept, given
that one the biggest limiting factors for machine learning and AI applications
is access to quality data.
“Quantum-secure”: A common
criticism of blockchain, in general, is that quantum computers will be billions
of times more capable of performing hashing algorithms than classical
computers.
Cons:
Smart Contracts: These don’t
yet exist for IOTA/Tangle, and it’s a gigantic drawback for developers. In
fact, the lack of smart contracts will be a showstopper if you want to build
any sort of Decentralized Application or “DApp” with IOTA.
Vulnerability: While
there have been no publicly documented successful attacks against the Tangle, a
common criticism is that it’s mathematically easier for malicious nodes to
attack it. For example, it only requires 34% of the total hashing power to
successfully attack the Tangle, versus 51% for Bitcoin or Ethereum, etc.
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