IOTAUSD
IOTA / United States dollar
crypto Composite

IOTA is transaction settlement and data transfer layer for the Internet of Things (IoT). It's distributed ledger, the Tangle, is based on a data structure referred to as a Directed Acyclic Graph (DAG). In the Tangle there are no blocks or miners, and every transaction on the Iota network must validate two previous transactions through a small proof-of-work (PoW). Thus the more transactions occur, the faster the network can process new transactions, theoretically allowing the network to become more efficient as it scales. IOTA's is a distributed ledger, the Tangle, is based on a data structure referred to as a Directed Acyclic Graph (DAG) rather than a blockchain. In the Tangle there are no blocks or miners, and every transaction on the Iota network must validate two previous transactions through a small proof-of-work (PoW). Therefore, users who issue a transactions are contributing to the network's security. Transaction on IOTA are stored in the tangle graph, which is the ledger for storing transactions. The main idea of the tangle is the following: to issue a transaction, users must work to approve other transactions. Once transactions are confirmed, they are broadcast to the entire network, where another unconfirmed transaction can decided to approve the newly confirmed transaction. It is assumed that the nodes check if the approved transactions are not conflicting. If a node adds that a transaction is in conflict with the tangle history, the node will not approve the conflicting transaction in either a direct or indirect manner. As transactions receive additional approvals, they are accepted by the system with a higher level of confidence. Approvals add "weight" to a transaction. The weight of a transaction is proportional to the amount of work that the issuing node invested into it. it. Transactions with larger weights are more important than transactions with a smaller weight. Transactions accumulate weight over time. A transaction's cumulative weight is the weight of the transaction plus the sum of weights of all transactions that directly or indirectly approve this transaction. The time is takes for transactions to get approved is inversely proportional to the amount transactions being issued on the network. Once transactions are approved their weight will grow at the rate of the incoming flow of transactions. Although not mentioned in the whitepaper, the IOTA network currently relies on a coordinator node that provides trusted milestone transactions, and snapshots which are used to reduce the size of the network. The coordinator node is a special node that is operated by the IOTA foundation designed to protect the IOTA network from attacks while it grows. The coordinator node issues milestones every minute, which reference valid transactions. Milestones are special transactions published by the Coordinator that keep the Tangle from branching out too widely, which could result in bifurcations of the ledger. It effectively pulls branches back to the main tangle, resolving potential double spends in the process. Transactions on IOTA are only treated as confirmed if they are referenced by a milestone. All nodes running the IOTA software treat all transactions referenced by the coordinated as valid. Snapshots are periodic events triggered solely by the IOTA Foundation that delete all zero balances in the system and restart the Tangle from a 'new Genesis'. Occurring roughly every month, snapshots aim to reduce the size of the IOTA network, preventing it from bloating. Full Nodes in IOTA only store the history up to the latest Snapshot. IOTA plans to remove the coordinator once the network reaches scale. Furthermore, it eventually plans to incentivize full nodes to store the entire Tangle history beyond snapshots issued by the IOTA foundation.