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LINKS FOR ADDITIONAL READING FOR THIS VIDEO & ALL INFO IN TEXT DOWN BELOW
IOTA Website: https://iota.org/
White Paper: https://iota.org/IOTA_Whitepaper.pdf
IOTA GitHub: https://github.com/iotaledger
Great Blog Posts by Roman Semko: (1) https://medium.com/deviota/iota-why-free-transactions-matter-most-f90fd6f4383c(2) https://medium.com/deviota/decentralised-cryptocurrency-is-dead-c1763dc75efb
Overview of Hashgraph: http://www.swirlds.com/downloads/Overview-of-Swirlds-Hashgraph.pdf
Definition of DAGs: https://en.wikipedia.org/wiki/Directed_acyclic_graph
Blog on IOTA and Internet of Things: https://medium.com/@MartinRosulek/how-iota-makes-future-for-internet-of-things-af14fd77d2a3
IOTA Tangle Security Concerns: https://medium.com/@neha/cryptographic-vulnerabilities-in-iota-9a6a9ddc4367
IOTA Team Addresses Security Concerns: https://blog.iota.org/curl-disclosure-beyond-the-headline-1814048d08ef
For those who have spent at least a little bit of time in the crypto space, it shouldn’t come as a complete surprise that people are searching for better ways to accomplish the same things that blockchains can.
It certainly isn’t inaccurate to say that blockchain technology was developed in an effort to circumvent the currenct financial system and all of those annoying middlemen. The goal was always to bring decentralization to all and to finally empower individuals to take control of their wealth, to be their own bank. But now, looking at the largest and arguably the most successfully crypto in regards to adoption, the one we all know as Bitcoin, we’re beginning to see this ideology taking the backseat. Mainly, there is no doubt a type of centralization occurring with the mining pools of bitcoin. There are now a handful of companies who can control the transactions of Bitcoin.
The only reason there was room for this to happen is thanks to the inclusion of transaction fees as a way to motivate miners to participate in the network.
Despite Satoshi’s best efforts to invent a system that could undermine the greedy financial system as we know it today, because money is still being used as a motivator in this new system, and us still being humans that are running it, we are still vulnerable of our human condition, in this case, that is to be greedy.
We are always looking for fast transactions, low or no fees and complete decentralization. Many cryptos have these perks right now, but the issue that hangs over everyone’s head is that of scalability.
This is where IOTA can be a game changer, and here’s why.
IOTA uses a type of DAG that they are calling “Tangle.” In their system, if you want to participate in their network, if you want to make transactions on their network, you need to help. For every transaction you’d like to submit on IOTAs Tangle, you will have to process two transactions from other users.
This shifts the motivating factor from extrinsic (that is only processing transactions for the sake of getting paid) to intrinsic (you help to secure the network so that you may also take part in it.) This also means that the more users of this network, the faster the transactions will be confirmed. IOTA has the potential to be completely decentralized, but for now, in its beginning stages, the network uses what you could call a bottleneck that they refer to as the “Coordinator.” So for now, it hasn’t yet reached it’s ideal status of being completely decentralized.
That being said, there are some security concerns that have been voiced. One of the points has to do with a flaw in the custom hash function called Curl. Basically, instead of taking tried and true cryptographic primitives to build their system, the IOTA team decided to write their own hash function called Curl. Basically, this can open the door for vulnerabilities concerning the validation of transactions.
If you’d like to learn more about this concern and how the IOTA team has since addressed the issue you can always take a look at their blog.