IOTA, performed as a distributed ledger designed to record and perform transactions between machines and devices in the Internet of Things (IoT) ecosystem, makes a solution to the Bitcoin problem is to remove some of the key concepts and connect the blockchain topography.

MIOTA, the IOTA cryptocurrency, is pre-mined and the transaction consensus occurs differently compared to blockchain.

The developers of IOTA have built a new data structure that is known as Tangle. Tangle is a Decycralized Acyclic Graph (DAG), an unordered system node. Each node can provide several other nodes in Tangle. However, they are connected only in a certain direction meaning that a knot cannot return to itself. The blockchain standard is also a DAG because it is an ordered linked set.

Tangle IOTA is also known as a parallel system, where transactions can be accessed simultaneously, not sequentially. When it comes to processing transactions, the more systems attached to it, the more secure and efficient Tangle becomes. In Bitcoin, a group of systems running a full node containing the entire transaction history for the ledger is required for confirmation and consensus. This process is energy and computational intensive. Also, full Node miner is not necessarily required in Tangle. Each new transaction with the confirmation of the previous transaction time, will reduces the amount of time and memory required to confirm the transaction.

Proof of Work (PoW) that is easy to crack and add immediately to transactions as a last resort. The two selected transactions are called tips. The IOTA system uses a “confident” tip selection algorithm as the measure for any occurred transactions. If a transaction has been approved 97 times in the past, then the confidence that a node will re-approve it in the future is 97%.

Related to the concept of “trust” is the weight of the transaction. When moving through Tangle, transactions accumulate weight. The transaction weight increases with the number of approvals. After a transaction has been confirmed, it is checked across the network, and other transactions that have not been confirmed can choose a recently confirmed transaction as one of the tips for confirming itself.

This transaction confirmation method results in no-cost and low power consumption, allowing MIOTA to be used in a wide variety of devices and machines with different power requirements.