IOTA is a next generation permissionless distributed ledger that utilizes a novel invention, called a “Tangle”, at its core.
The Tangle is a new data structure based on a Directed Acyclic Graph. As such it has no Blocks, no Chain and also no Miners. This radical new architecture enables things in IOTA work quite differently compared to Blockchains and other Distributed Ledger Technologies.
Consensus
Apart from the data structure, the other major difference is how IOTA achieves consensus and how transactions are made. As mentioned previously, there are no miners. What this means is that each participant in the network that wants to make a transaction has to actively participate in the consensus of the network by approving 2 past transactions.
This attestation on the validity of two past transactions ensures that the network achieves consensus on the current state of approved transactions, and it enables a variety of unique features that are only seen in IOTA.
Features
IOTA has a range of features that are uniquely enabled due to its architecture:
Scalability
IOTA can achieve high transaction throughput thanks to parallelized validation of transactions with no limit as to the number of transactions that can be confirmed in a certain interval
Decentralization
IOTA has no miners. Every participant in the network that is making a transaction, actively participates in the consensus. As such, IOTA is more decentralized than any Blockchain.
No Transaction Fees
IOTA has no transaction fees.
Quantum-immunity
IOTA utilized a next generation trinary hash function called Curl-p, which is quantum immune (Winternitz signatures)
In the following sections, we will take a deep dive into some of the important features and principles behind IOTA.