IOTA’s Tangle – Simply Explained

When Bitcoin was first released to the world
in 2008 it started a revolution. People claimed that the blockchain would solve
many problems and that it has countless of applications. Blockchains indeed have very interesting properties
and you can learn all about them in this video here. However they have one big limitation and that
is that don’t scale very well. This is exactly the problem that the creators
of IOTA wanted to solve. Instead of using a blockchain, IOTA uses something
called a DAG or tangle. DAG is short for Directed Acyclic Graph and
it’s a storage system where individual items link to each other. “Directed” means that the link between
items always have a direction and acyclic means that you cannot create loops inside
this structure. This might sound complicated, so let’s take
a look at a simple tangle. Each square represents a single transaction
and is also called a “site”. Each site contains all the details about the
transaction: such as the sender, the receiver and the amount of coins. It also has a connection to at least two other
transactions. These are called “edges” and they validate
the transactions. Here is an example of a bigger Tangle. Near the end of our Tangle we find a few transactions
that don’t have two or more incoming edges. This means that these transactions are unconfirmed. We also call these the tips of the tangle. Alright now that we understand some of the
IOTA terminology, let’s take a look at how we can add a new transaction to the tangle. We have to attach our new transaction to one
of the tips of the tangle. An algorithm selects two of them at random
and makes sure that the transactions don’t conflict with one another. If one of the tips is a fake transaction,
it is ignored and a new tip is selected. If everything checks out, we attach our transaction
to the two tips. This adds our transaction to the tangle and
verifies the two other transactions. Our transaction is now part of the tangle
and becomes a new tip. This technique makes IOTA’s tangle incredibly
scalable. For every transaction that is added to the
tangle, two others are being confirmed. This means that the network doesn’t slow
down when there are a lot of new transactions. In fact, it actually speeds up! That’s all great, but how do we know we
can trust a transaction? In traditional blockchains people often use
the number of confirmations to check wether or not a block should be trusted. Well IOTA has similar technique. Each site has a weight. This number signifies the amount of work that
a node has done to make this transaction. In other words: a higher number means the
node spent more time doing the proof-of-work for that transaction. Each transaction also has a cumulative weight. This is the sum of it’s own weight plus
the sum of the weights of all transactions that approve this transaction. It seems quite complicated, but it really
isn’t. Here is an example of a Tangle where every
transaction has a weight of 1. We’ll put the weight of an individual transaction
in the bottom right of each square. Now let’s check how trustworthy this pink
transaction is by calculating its cumulative weight. To do that, we sum up the weight of the two
transactions that have approved it. But those transactions where approved by other
transaction as well. So we keep summing up all these weights until
we get to the end of the tangle. In this case, the accumulative weight of the
site is 6. Transactions with a high cumulative weight
are usually older and have more direct or indirect verifications. So we can trust those transactions more then
others. So now you know what IOTA’s tangle is and
how works. But how does it stack up against traditional
blockchains? Well, the tangle solves two big issue’s:
scalability and miners. Let’s discuss _scalability_. As we’ve seen: IOTA’s network becomes
faster when more transactions happen. This means that IOTA can handle almost an
unlimited amount of transactions per second while traditional blockchains can only handle
a few. But there is an other aspect to scalability
that most people seem to forget and that is storage. In a blockchain, you need a full copy of the
chain before you can start adding new transactions. Right now the Bitcoin blockchain is almost
150GB in size and keeps growing very fast. Storing all this data is not something every
device can do and will get harder over time. IOTA’s Tangle is much more lightweight. You don’t need a full copy of the tangle
to add transactions. You only need a small part of the tangle to
create and verify transactions. This makes it much more future proof. And finally IOTA has _no miners_. Usually miners are there to create blocks
and validate transactions. For this hard work, miners take a fee from
each transaction. In IOTA, no miners means no fees. Sending money around is this completely free! So now you know how IOTA’s tangle works,
and how it compares to regular blockchain technology. If you liked this video, please give it a
thumbs up and get subscribed to my channel. Thank you very much for watching, and I’ll
see you in the next video!

93 thoughts on “IOTA’s Tangle – Simply Explained”

  1. I can not recommend the iota Wallet. It's the worst technique I've ever seen. I wish I could sell my Iotas, but unfortunately it is not possible to send these tokens to an exchange !! Because of the outstanding transactions, they are not confirmed by the tangle. What a bad joke ..

    How ever, great explanation ?

  2. Can you do on Ripple and XRP? Also although size is reduced because you don't need the whole "blockchain" eventually when the network becomes large enough and grows enough to have large amount of transactions, IOTA will face the same issue correct?

  3. Great video…I'd love tomke a french translation of it for french speaking people.

    Also you should correct your tangle cum weigths, because the node with 3 is incorrect, it should be 4, right?

  4. Simple, amazing explanation. I subscribed.
    Quick question though : at the beginning you mention that it takes two edges to validate a site. Which I understand to mean two directly connecting transactions. When you discuss scalability at 4:46, the site on the far left only has one edge connected in blue color .. is it considered a confirmed site/transaction ?

  5. Great video.
    If we have a cryptocurrency over Iota…
    How does Iota get created? And is it available in limited amount just like Bitcoin?

  6. If I am using a light wallet then am I still approving 2 transactions before mine goes through ? Or is the load balancing server doing all of that for me ? I have trouble visualizing this if my computer is not acting as a node. Is the server acting as a node for multiple light wallets ?

  7. IOTA is smoke and mirrors. If you have a technical background it's pretty easy to see they are selling hype and concept. Nothing else. And let's not forget they completely lied about their partnerships with Microsoft, Cisco and IBM.

  8. Response to MIT FUDs By other hand IOTA is starting Think about Blockchain in 2010. In fact think on Bitcoin today. Bitcoin is unfinished technology 7 years later.

  9. I was about to say that it would be better if you can also mention the problems with these technologies, not only for Iota. Generally about all. For instance I think security wise Iota fails, it would be nice to hear your opinion as well but other than that great video again, thank mate!

  10. 2:00 Those tx are not yet confirmed. They have only ONE incoming transaction only. You need two TXs to confirm one TXs

  11. These videos are the bomb bro! How have you not got more followers???

    Oh right, you're not a Bitconnect scam or giving anything away..

    It's best this way.

  12. So basically, what I got out of this is that IOTA's "Tangle" system can be much faster in terms of transactions per unit of time, and it requires less memory, but it is much riskier and less safe than the blockchain.

  13. Shouldn't you mention that IOTA's code is ternary, but needs to run on machines (it's developed to run on the IOT's) which are based on binary code and hardware based systems – thus all IOTA code has to be repackaged into binary, leading to massive storage overhead – apparently not as efficient as they would have everyone believe. In my opinion, this seems to be a valid criticism, so one will have to see how they prove themselves in real world transactions. Also how secure this very lightweight confirmation (compared to regular blockchain) network will turn out to be, once it starts being implemented. On the other hand, it does seem promising, regardless, they just need to address these issues.

  14. LOL the reason there are no fees is because it does not work with a 2 years fingers crossed promise that it will…….

  15. Very nice combination of knowledgeable speaker and excellent presentation! Just wondering what software are you using fo animate your videos?

  16. I must have missed something. Is there incentive for participation? Maybe lite weight, but without incentive it won't be on my machine.

  17. Its a shame how all these "TOP 5 ALTCOINS TO THE MOON!" channels have more subscribers than yours. You actually explain the tech behind the products people are just tossing money into without regard. Very happy to have discovered your channel today. Please keep up the good work in helping crypto investors learn, which will hopefully lead to more informed and thought out decisions being made in the long run.

  18. IOTA sucks, see all their problems with their wallet, lots of people their tokens stolen from iotas inferior wallet, how can you create a great crypto, if your tech guys dont know to build a save simple wallet? Warning,, dont invest your money in these amateurs.

  19. Fast transactions, no fees and this tangle thing seems too sketchy. What's the business model of IOTA if eveything is free? What's the point of "weight"? Seems like a promise, that will never happen.

  20. You say there'll be no fees but earlier in the video you say there's a treasury that takes a cut off all transactions. That sounds like a fee. Otherwise I like your videos

  21. The tangle is a great idea, but let's not forget that miners are there for a reason. They make sure that the amount of bitcoin in the system is more or less evenly distributed. Otherwise there has to be a single person or company that creates coins and that's where things get centralised…

  22. No mention of trinary in this video. The concept appears flawed, but I'm not as smart as the IOTA team and trinary author of the 70's.

  23. Can’t work with just the information presented. What precludes double spending? Just need to make two transactions spending the same amount in two different “neighborhoods” of the DAG…

  24. Which incentive would nodes have to validate transactions if they get no transaction fee or anything of the kind?

    And how does iota prevent double spending? Wouldn't I just need to make a payment to two tips with enough distance to each other?

  25. Excellent man, excellent! Please keep on making as many explanations for as many of the Cryptos that you value. These are the best explanations I have seen anywhere on the net!! Really brilliant and super simple! Fantastic work!

  26. Nice video, i just coudnt undearstand 2 things. How can the network identify if a block is tampered and how the creation of new blocks are made wihtout miners?

  27. This channel is really something, I like it! Really explain the potential of the projects from different dimensions. I hope it can produce more excellent projects, I will join after final decision and will donate if I earn from the project haha

  28. Tangle reminds me of the Chinese board game "Go", I know it's weird and completely different but for some reason, that is what I think of when I see Tagle explained.

  29. Very well explained, as in all of your videos (i loved the graph theory!!!) But one question stays in my mind: Where do all the Computers come from, that operate the system, if nobody is paying them …

  30. This is a bit of what is coming, the quantum protocol Tangle IOTA will drive the next industrial revolution, solving the biggest problems of the blockchain, some of the huge improvements of IOTA are: zero fees, infinite transactions per second, as that increases the number of users these are becoming increasingly faster and with greater security, artificial intelligence that continuously improves the decentralized economy of the Tangle of IOTA, infinite scalability, without the need for miners, a new financial system built to empower the future "internet of things", by 2020 this technology will be implemented for the creation of smart cities, such as the "Smart City Hackathon" sponsored by the car manufacturer Renault, IOTA is the new gold, blockchain was the beginning, now the technology tangle of IOTA will achieve mass adoption, I leave the data, everyone can investigate the matter.

  31. Oh, so that means a malignant user can't spam the network with transactions to cause congestion, because each of those transactions are helping the network by confirming 2 other transactions? Confirmarions aren't made by miners but by whoever sends a Transaction? Have I got it right?

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