I've been playing about with crypto for about 5 years and it's not everyday there's something that mangers to stand out from the alt crowd. So wanted to layout my thought on the new kid on the block I mean the tangle.
What's up with BTC and other Altcoins?
BTC work off of a blockchain with mining to verify transaction with mining fees to encourage miners to include your transaction. Without the fees it's going to take a long time before you get your transaction verified. This all gets impractical when the transaction volumes get bigger and most other cryptocurrencies (Altcoins) are essentially trying to solve this problem with a variety of different approaches. But the blockchain and mining remain a core feature of most of these.
How is IOTA Different?
IOTA has come up with, what looks like a very different approach. The blockchain is replaced by something called a Tangle which can be pictured as a network/web of transactional nodes (See the white paper presentation below). This all looks pretty smart, but for me the best bit is the way they verify the transactions. When you hear there are no transaction fees or mining, the first thought that came to mind is, why would anyone bother verifying transactions without payment. Well the answer turns out to be pretty obvios. They just get the people who are making the transactions do the verification. It's a bit like checking each other's homework at school. To stop the cheating they randomly allocate transactions across the network. I'm clearly oversimplifying things here and possible getting some of it wrong, but you get the general idea. If you really want to get into the detail, then watch the video below.
Why did I invested in IOTA?
I'm not a currency trader. I'm not smart enough to day trade looking at candlestick charts. Like a lot of people out there, I invest in coins that are solving a problem and hope they get enough traction to be worth something. I'm also happy to help good ideas get started. I think iOTA is one of these. It is the only crypto network that I've seen that offers instant transaction with no fees, and no mining, which makes it hugely scalable. If the technology stands up to scrutiny then this could go big. They've also got interest from Microsoft, which kind of gives me some confidence.
So there you have it.
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