You have heard of the Blockchain but what about the Tangle?
Blockchain may not be the final step for the cryptographic revolution!
The Blockchain and Cryptocurrency revolution has been rapid and unhinged. A minimum of 4 ICOs are begun every day, $3.2 Billion was raised in 2017 and many are raising in the order of several hundred million dollars each. The development of Blockchain has changed much from Satoshi Nakamoto’s original paper, with the integration of ideas like Merkle Trees and off-chain augmentation. Blockchain has adapted to a projectile tree approach whose ‘potential blocks’ are requested faster every day without a speed increase in the number of blocks accepted. The longest branch is accepted as the communal transaction history.
There is a fundamental problem because of the increasing pace of transactions. Let say you assume that a particular tree will be the longest chain and try to initiate transactions based on your perceived history. You will be right most of the time, but not always. When you are wrong you must back track up the entire tree until you reach a communal branch, and then receive, accept and re-interact with the true historical ledger. This can be very taxing and a massive pitfall when writing a ledger of something as important as multi-million dollar transactions.
One potential solution and perhaps the future of all Blockchain is the Directed Acyclic Graph (DAG). Instead of creating isolated branches of your tree and then going to the base every time, you connect the isolated branches of the tree every time a new leaf is formed. Then you can jump across to the correct branch if it turns out you have the wrong branch (wrong history of transactions). Importantly, the system is acyclic, meaning the connections are made forward and you cannot return to your starting location once you move. Think of a projected web always moving forward and adding new connections. The benefits of this system is that it reduces transaction costs in exchange for a higher level of connection at every instance. This enable a large amount of micro-transactions, especially since it costs approximately $0.83USD to make a Bitcoin transaction. DAG technology is already heavily used in the ICT space, forming the basis for the Big Data revolution and MapReduce, foundational to ApacheSpark and other Data Engines. When integrated as the connecting map registering ledger transaction states the technology is called a Tangle, and it may be the future of the cryptocurrency industry.
The most notable early implementers are IOTA and Byteball. IOTA, a once top ten crypto, is attempting to implement and extend transactions on the Internet of Things Network. IOTA must have a multitude of seamless transactions to make Ledger IOT Transactions possible, so DAG was the easiest option. For instance, if the watercooler in your office can enable a feature to heat the water at a higher cost, it can charge more for that hot water to make itself self-sufficient. If will then update on the ledger that the transaction took place, virtually for free and instantly, and enable every device and user in the network to understand what transactions have taken place. Any device can then be added to the network without having to download the history of its entire Internet of Things world. When cryptocurrency reach that degree of acceptance in regular society they too will require this seamless, free interaction. I am unwilling to sell bottles of water for $1 if 83% of that money goes to transaction cost.
As systems progress from traditional blockchain to new DAG Tangles, conversions and trades between these currencies will still be required. These systems cannot communicate with one another as they have different architecture. Another once top ten crypto, Hcash, solves the transition to these new systems by tracking and communicating transactions between multiple channels. Hcash can do this by having a hybrid system of highly connected layers in the web with reinforced Blockchain highways. Hcash is also future proof in other aspects since it is Quantum Resistant and DAC-DAO Governance.
