The Technological Characteristics

[Niko]

The Technological Characteristics

Tangle - is a new data structure based on the Direct Acyclic Graph and which does not need miners and data blocks.

Each network member who wants to execute a transaction must actively participate in the network consensus by approving two past transactions. This attestation of the validity of the two past transactions ensures that the entire network will reach a consensus on the current status of the approved transactions and will allow using a number of unique functions that only IOTA has: high transaction capacity due to concurrent checking without limits on their number, no responsibilities for transactions, greater decentralization in comparison with the blockchain and higher security.

Thus, the new IOTA coin can not be mined: the entire volume of coins was released immediately at the time of their creation. Therefore, it should be borne in mind that if you are doing some work in IOTA, you do not create new Iota tokens, but simply confirm other transactions.

Design

Each square box in this diagram represents a transaction being sent.

For each new transaction, two random, unconfirmed transactions are validated in the tangle. Each validation (n) of a transaction increases the likelihood of a transaction being genuine, up to a threshold of (c). In this figure, red boxes indicate transactions where n> 0, but below a certain confirmation threshold, n <c.

The gray boxes represent transactions where n = 0. The green boxes represent transactions that have been validated a sufficient number of times, in order to be accepted as confirmed by the recipient address, n> = c.

Transactions

For an IOTA user to send out a transaction, the user must validate two other, randomly selected transactions. A sent transaction must accumulate a sufficient level of verification (i.e. must be validated a sufficient number of times by other users) in order to be accepted as "confirmed" by its recipient. IOTA works with a single administrator called the Coordinator which confirm all transactions in a set of released milestones. Without the Coordinator, the IOTA DAG is not considered sufficiently secure in its early stages. The Coordinator is meant to be removed when network is insufficiently large. Not only are hash-based signatures much faster than ECC, Grover's algorithm dictates that a quantum computer would be very efficient at conducting brute force attacks. The process of finding a cryptographic nonce in order to generate a Bitcoin block is particularly vulnerable to such brute-force attacks. As of today, an average of around 2 nonces must be checked to find a suitable hash, and this trends up over time. In this regard, IOTA is less susceptible to brute force attacks following implementation of quantum computing.

They made use of a self-designed hash function named Curl. In July 2017 researchers found a critical vulnerability allowing them to forge signatures. Generally, the researchers criticize the use of self-developed cryptography. On 7 August the developers replaced the hash function with a version of SHA-3 named Kerl, which works with ternary (instead of binary) operations, effectively fixing the vulnerability.