Iota The Tangle vs The Blockchain

Hi I'm Nathan, I'm a student from the Netherlands and this is my first article on Steemit. I've been looking into IOTA and other cryptocurrencies a lot lately and I came across Steemit and thought, hey why not sharing what I've learned.

My knowledge of IOTA and other cryptocurrencies comes from a lot of articles I've read about it and videos I've watched. All my posts will be based on these articles. If you come across anything and think hey this isn't right please let me know:) If you've got any questions about IOTA or cryptocurrencies in general feel free to ask and I'll try to provide you with the best answer I can give.

Iota The Tangle vs The Blockchain
What makes IOTA different is that they use the Tangle instead of a blockchain. It’s a distributed ledger based on a DAG (Directed Acyclic Graph). The Tangle is kinda like a blockchain but without blocks. So actually it's not a blockchain ofcourse, this comparison is just to make it easier to understand.

If you would like to dive deeper into the underlying principles of the Tangle I would recommend to read the whitepaper: https://iota.org/IOTA_Whitepaper.pdf

The Tangle is just like Blockchain a distributed database, a P2P Network and also relies on a consensus and validation system. But the main differences are the Tangles structure, which is a DAG and the way the Tangle achieves consensus.

In the Tangle every transaction references two past transactions. The transaction attest directly that two transactions, and indirectly that a part of the Tangle is valid and follows the rules of the protocol.

So the whole network (everyone or thing doing transactions) is involved in approving the transactions. So the consensus in IOTA is a built-in part of the transactions. With the blockchain based cryptocurrencies a smaller part of the network approves the transactions, often the miners. That makes scalability harder and harder when more transactions are done on the Blockchain based networks. With IOTA it's actually the opposite. The more transactions are done the better the Tangle scales. And because the consensus in IOTA is a built-in part of the transactions, IOTA scales without transaction fees.

How the IOTA transaction making process works

1. The transaction input is signed with your private keys
2. Via MCMC (Markov chain Monte Carlo) two unconfirmed transactions are randomly selected and are referenced by your transaction
3. You need to do some proof of work to have your transaction accepted by the network

When these steps are completed the transaction is send to the network. Then a transaction of someone else will choose you transaction to validate it via MCMC. And then you're transaction is confirmed. It may sound more complicated then it is, is actually quite simple.

Let me know what your thoughts on IOTA and cryptocurrencies in general are, what you would like me to cover and if you have any questions please don't hestitate to ask:)

Have a great day!