The IOTA technology is not based on the “traditional” blockchain, but on a new Distributed Ledger Technology (DLT) called Tangle. What potential does it promise, especially in terms of IoT, and what prospects does Coordicide offer?
Thanks to IOTA, networked machines can automatically register and execute transactions. Currently, there is no other project with comparable performance and functionality.
The open-source project IOTA is intended to support machine-to-machine communication. The DLT technology uses a directed acyclic graph (DAG) called tangle as a data structure instead of a block chain's data chains. Compared to a blockchain, the tangle is a “chaotic network” consisting of many links. Therefore, IOTA allows all transactions to run in parallel and allows the realization of any number of transactions. There are no transaction fees with the blockchain.
However, each new transaction must verify two previous transactions. If the number of transactions in the IOTA network increases, the faster they can be verified. With the blockchain, however, each block can only transfer a limited number of transactions. Thus, the “conventional” blockchain has only limited scalability.
