Getting to the Bottom of IOTA, Untangling Its Pros and Cons

Published by : Mudit | Oct-29-2018

  • IOTA and Tangle are two complex concepts to wrap your head around at first gander. Especially when compared to a typical blockchain. However, the boons offer a myriad of data for blockchain development companies willing to stick with the technology given its technological advantages in the landscape of blockchain development services.

    One of the basic concepts of IoT (Internet of Things) is to provide cost-effective sensors to gather data about our devices and the world around us, and making that information available to us within just a few clicks.

    With time, the amount of IoT sensors providing data over the internet will count in trillions. IOTA reimagines that world of IoT. 

    Firstly, let’s understand some terminology before reading IOTA’s Pros and Cons:

    IOTA: It’s both an institution as well as a cryptocurrency.
    Tangle: It’s a distributed database and protocol used to store immutable and cryptographically secured data and transactions. Tangle stores all IOTA transactions.

    Tangle offers some unique features, but it’s important to understand that it’s not a blockchain or based on its technology in the traditional terms.

    Tangle demonstrates a different technology:

    It uses DAG (Directed Acyclic Graph) highlighting individual transactions.


    Upon a closer look at the graph, you’ll notice that each transaction represents exactly two more of them to the left.

    Today, we’re talking about the fundamental structural differences between the Tangle and blockchains that give rise to former’s pros and cons.


    Transaction Fees:

    There are no transaction fees. To write to the tangle, you need to perform PoW (Proof-of-work) on two other transactions. There’s no need for ‘GAS’ or to ‘tip’ miners to expedite the process of transaction execution. ‘Mining’ is not even a thing for the tangle.


    As there are no transaction fees, you can efficiently send as little as one IOTA, which is currently worth $0.0000016 to anyone.
    While this is not the case with other blockchains, they can have transaction fees.

    For instance, late last year, if you wanted your bitcoin transaction within 24 hours, it would cost around $20 worth of transaction fees during peak load. Thus, bringing us to the next time.


    One of the fundamental bottlenecks for most of the blockchains is the issue of Scalability. Normal blockchains consume a lot of time to achieve consensus by building new blocks.
    For instance, Bitcoin blockchain can handle 3 to 4 transactions per second, Ethereum, around 15-20. But, Tangle is experiencing huge transaction spikes, in hundreds per second.
    Not only this but it can theoretically scale infinitely as the larger the number of devices writing data the faster the network becomes.


    The basic concept of Tangle technology is to enable devices having the low computing power, like a toaster, to write data to the Tangle. And therefore, perform PoW in less time.

    Data Marketplace:

    IOTA offer you the ability to sell data by providing people with the ability to subscribe to that data for a few bucks. It makes it a powerful concept, provided that one of the limiting factors for AI and Machine Learning is access to quality data.


    Generally, a common criticism of blockchains is that if we use quantum computers, they can be billions of times more capable of running hashing algorithms than traditional systems. Consequently, it will be easy for a quantum computer to achieve a 51% attack to hack a typical blockchain network. On the other hand, IOTA is ‘quantum resistant’ as it uses ‘trinary’ or balanced ternary computation instead of using standard binary computations run by normal computers.


    Smart Contracts:

    One of the drawbacks for IOTA/Tangle is that Smart Contracts don’t exist here yet. If you want to develop a DApp with IOTA, it might not be possible. However, the IOTA foundation is actively working to fix this, by building a Smart Contrac layer on top of the IOTA core. And maybe available by the end of 2018.

    A conclusion of IOTA’s Pros and Cons:

    When talking about IOTA’s Pros and Cons and given its uses in data science, IoT, and Blockchain, the technology is attracting a lot of eyes. Indeed, we can imagine billions of sensors streaming data to the Tangle. Users will be able to subscribe to relevant data streams to build top-class machine learning algorithms based on large data sets. Even new AI startups can subscribe to data streams as they might not have access to any data.


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