IOTA has a unique platform and system when it comes to blockchain technologies.
IOTA is typically a distributed ledger which has been developed for the use over the IoT (Internet of Things) platform. This means that it would be able to facilitate transactions between machines. Through this platform, the mIOTA exists as the cryptocurrency. Instead of the blockchain used in other such systems, IOTA adopts a DAP or Decentralized Acyclic Graph platform. What it wants to do is to be the standard mode of transaction for devices that are connected to the internet. Through mIOTA, there is a micropayment transaction platform for the devices. In other words, you can now use mIOTA to buy your groceries through your fridge which is connected to the internet.
Solving problems of other cryptocurrencies
Ultimately, IOTA wants to address (and potentially solve) the 3 problems that are found in Bitcoin which are:
- Transaction fees
This is where IOTA is lighter in the network and a lot faster than other bitcoin platforms.
This is the very difference for IOTA. The DAG is what makes it stand out among other blockchains. Where other systems use a configuration of nodes that generate blocks to the chain in order for coins to be mined, the DAG works in another way. It does not use a blockchain which means it does not need to depend on miners. This is done through the connection of the nodes and transaction approvals. In the IOTA network, there is no need for consensus. Every incoming transaction will have to approve the 2 previous ones before it becomes a valid transaction. This allows for a more self-propagating network instead of a chain-reaction type.
The network is called the Tangle and all transactions are at the outset, present within it. Even if the IOTA is strong and seemed more robust, this technology is still very new and is still a work-in-progress with a few major problems having surfaced recently including a phishing attack where about USD4 million worth of cryptocurrency was stolen.