The Tech Behind IOTA — Part 1 (Introduction)
The Tech Behind IOTA — Part 1 (Introduction)
In this article I’ll try and explain how IOTA will work in the post Coordicide (the removal of the coordinator) era.
Most probably there will be many series on this topic, each covering part of the solution.
This post will try to give you the general idea how IOTA compares to other traditional blockchains.
Most blockchains use Nakamoto consensus. They find a leader that produces a block, which is gossiped to all other nodes in the network to validate it. How is the leader selected? It depends, in PoW (proof of work) it’s the first miner that solves the cryptographic puzzle, in PoS (proof of stake) a random staker is selected for each block. So all of those PoX (proof of “x”) where “x” is a scarce resource (energy in PoW, stake in PoS, etc..), they all use Nakamoto consensus (longest chain wins), but find leaders in different ways. This process is done synchronously which means all (honest) participants first accept a new block and only after accepting it they start working on the next block. It’s important to note that each block has a fixed block size so each block has a finite number of transactions. A transaction is considered valid only if it’s included in a block, and all invalid transactions and double spends will never be included. So it’s easy to understand why this kind of consensus doesn’t scale in a secure and decentralized way. Only 1 node produces the block and all other are idle (aren’t doing any meaningful work while they wait). Only 1 miner produces a valid block and the other work put in by other miners (for that block) is discarded. Bitcoin is not slow because there are a lot of miners and validator nodes in the network. It would work the same with 1 node and a million nodes. It’s designed to keep the block time (time between blocks) around 10 minutes on average so all validators get the same block and validate it before they start working on the next one. Each block has a fixed size (1MB) in Bitcoin and only a limited amount of transactions can be made in that time. In order for your transaction to be included you pay fees to give an incentive to miners to include you in their block.
How is IOTA different?
-It uses a different data structure (Directed Acyclic Graph called the Tangle)
-It’s asynchronous (every node can produce a valid transaction at the same time)
The Tangle and its asynchronous nature are the main differences that allow IOTA to scale in a decentralized and secure way which couldn’t be possible in traditional blockchain where everything is synchronous around 1 elected leader.
How does it simply work?
Unlike traditional blockchain where the leader produces the block, in IOTA every node is allowed to issue valid transactions at the same time. Nodes add transactions to their copy of the Tangle and gossip them to neighboring nodes. Those nodes repeat the process until all nodes in the network eventually get the transaction.
It’s important to note:
