If you are a virtual currency investor, surely you are no stranger to Blockchain - the technology that gave birth to cryptocurrency, and Bitcoin - the first coin created from this technology and also a cryptocurrency. leading the Crypto market until now. However, recently with the emergence of a new technology platform called Tangle, and its accompanying cryptocurrency - IOTA, many people have raised the question: Will Tangle and IOTA become a real threat? for the exclusive authority of Blockchain and Bitcoin?
If you are still confused: What is Tangle? What is IOTA? And curious about the answer to the above question, let's find out right in this article!
1. Tangle Technology and IOTA Token
1.1. What is IOTA?
IOTA/MIOTA (Internet Of Things Application) is a cryptocurrency created with the purpose of meeting the need to perform a large volume of small transactions quickly with low fees. . IOTA developers soon realized the explosion of Internet-connected smart devices in the future.
A specific example is that back in the day, if you wanted to watch TV, you needed an Antenna device to receive and broadcast, and after buying all the necessary equipment, you don't need to pay any more fees (other than electricity) to be able to watch channels on your TV. Nowadays, most smart devices need an Internet connection. New software companies are increasingly embracing the Software as a Service (Software as a Service) model, which has led to an increase in the number of small volume transactions. Typically Netflix, this is a software product that you can only use if you have an Internet connection, and you have the choice of many different payment packages, paying a monthly fee until you stop using the software service. this soft.
At the time of writing, IOTA is currently ranked 22nd on Coinmarketcap rankings, 1 IOTA = 0.28 USD with a total market capitalization of $790.005,428, total circulating coins in the market is 2,779,530,283 MIOTA. You can make IOTA trading on some exchanges such as: Binance, Coinone, Okex,...
The technology that IOTA uses will solve the problem of scalability, which is a problem that some cryptocurrencies using Blockchain technology are facing such as Bitcoin, Ethereum. So is this technology really as special as rumored and how does it work? Let's find out in the next part!
1.2. What is tangle?
Tangle (also known as DAG - Acyclic Linear Diagram) has a completely different structure from Blockchain, but was created to serve the same purpose: to create a trusted decentralized network to perform the receipt and transfer of transactions.
The Blockchain network of most cryptocurrencies based on mining algorithms suffers from problems related to blocks, miners, and transaction fees. For example, Bitcoin uses a proof-of-work algorithm that consumes electricity and costs to upgrade miners; also, oversold attacks can occur if a group of people/miners take control of more than 50% of the network's mining hashrate.
see more: Surprised the true identity of Bitcoin's father
To overcome this problem, Ethereum also tries to switch from a proof-of-work algorithm to a proof-of-stake. Miners do not need to invest in a “huge” configuration of miner to find new blocks, but they must stake a part of coin/token to verify identity and participate in validating transactions in a block. However, if a person/group of people joins the system and they have a lot of money, they can take control of the system.
Tangle technology can solve the above problems based on its 3 outstanding characteristics:
Do not use blocks
No Miners Needed
No transaction fees
Another problem with Blockchain technology is transaction processing speed and scalability. The blocks in the Blockchain network are linked together, the next block not only contains the verification information of the previous block, but also includes the transaction information of the whole system. Therefore, the more blocks are added, the slower, more expensive, and difficult to scale the system becomes. Tangle technology can also easily solve these problems by, once a transaction is confirmed and added to the system, it only needs to verify the previous 2 transactions. The system will not become slower as more transactions arise, because each new record in the ledger contains the same amount of information as the previous one.
However, Tangle technology still has its own disadvantages, let's compare the advantages and disadvantages of Tangle compared to Blockchain through the table below!
2. Can Tangle completely replace Blockchain and will IOTA outperform BTC?
IOTA is currently developing quite well in the market, standing at 22nd place in Coinmarketcap rankings. crypto still has quite a bit of space to expand, as its developers can strengthen its security features, and the number of users and the number of nodes on the system increases in the future.
IOTA is not created to surpass BTC but to develop the cryptocurrency ecosystem. Blockchain is an age-old technology that has been widely applied in many areas of social life. Network scalability issues and security threats will certainly be improved by developers in the future. Besides, Bitcoin will still maintain its position as the leading cryptocurrency with the largest market capitalization, simply because it is extremely popular, and highly liquid.
However, IOTA brings with it 3 very important characteristics that many users expect in a future cryptocurrency: fast transaction speed, low fees (even no fees), and Unlimited scalability of the network. These characteristics of IOTA will help it to continuously develop further.
Have you heard of Tangle technology or this IOTA cryptocurrency? Do you think this is a coin worth investing in and it will thrive in the future? Please share your thoughts with the Crypto-loving community at primexbt news!
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