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Jan 13th, 2019
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  1. \section{Tangle vs Blockchain}
  2. To fully understand motivation behind creation of  IOTA and it’s main feature - the Tangle, we are going to compare it with constantly rising Blockchain technology and cryptocurrencies which it supports, such as Bitcoin and Ether.
  3. \begin{flushleft}
  4. Blockchain is example of  distributed ledger that stores a all transactions sent through its network. These transactions are validated through distributed consensus. Miners are users that are responsible for validating these transactions, which makes them crucial for maintaining the integrity of the system, as they ensure that every transaction is legitimate. This mechanism is called Proof of Stake, there are others mechanisms, but regardless of mechanism, Blockchain reaches distributed consensus thanks to an individual or individuals connected to network nodes.
  5. \end{flushleft}
  6. \begin{flushleft}
  7. The last point is one of the biggest differences between Tangle and Blockchain. Instead of having a group of miners or validators dedicated to processing transactions, everyone sending a transaction is responsible for processing other transactions on the Tangle. If user wants to send transaction, user needs to validate last two transactions. Thus, by sending transactions you speed up the network. IOTA was designed specifically for the IoT (Internet of Things), the ecosystem of smart devices that use the internet in some fashion to function. Because IOTA and the Tangle were built in this way they hold noteworthy advantages  over Blockchain technology :
  8. \begin{itemize}
  9. \item Decentralized protection - already mentioned difference, which removes fees charged by the miners and it prevents blocking small transactions
  10. \item Scalability - IOTA ecosystem allows transfer of tiny bits of information, ideal for micro-transactions. Also, less strict data transfer rules result in   more agile system which is suited for handling a huge volume of transactions
  11. \item Security - Blockchain boasts a higher level of security, due to its arduous block-formation process. The tangle only requires that a device validate two previous transactions before it can complete one of its own and thus create a data node. This less-robust procedure renders the tangle less secure than blockchain. But with using less demanding and secure protocol, we get more agile network which is better suited for massive volume of IoT transactions.
  12. \item Structure - Blockchain consists of blocks of data, each one attached to the previous one in a long chain. The tangle, on the other hand, is constructed of a group of data nodes that flow in a single direction. This allows faster transfer of data.
  13. \end{itemize}
  14. \end{flushleft}
  15.  
  16. \begin{figure}
  17. \begin{center}
  18. \includegraphics[width=\columnwidth]{tangle_bitcoin2.png}
  19. \caption{Tangle vs Blockchain}
  20. \end{center}
  21. \end{figure}
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