Serguei Popov, for Jinn Labs: The tangle, IOTA
April 3, 2016. Version 0.6
In this paper we analyze the technology used as a backbone of iota (a cryptocurrency for Internet-of-Things industry). This technology naturally succeeds the blockchain technology as its next evolutionary step and comes out with features required for micropayments conducted on a global scale.
The rise and success of Bitcoin during the last six years proved the value of blockchain technology. However, this technology also has a number of drawbacks, which prevent it to be used as a one and only global platform for cryptocurrencies. Among these drawbacks, an especially notable one is the impossibility of making micro-payments, which have increased importance for the rapidly developing Internet-of-Things industry. Specically, in the currently available systems one must pay a fee for making a transaction; so, transferring a very small amount just makes no sense since one would have also to pay the fee which is many times larger.