IOTA digital coin is an open-source distributed ledger. It uses a directed acyclic graph (DAG) instead of a blockchain.
Transactions are transmitted between users and are confirmed by a central Coordinator. Transactions are considered confirmed when the Coordinator has included the transaction in its set of released milestones. In order to send a transaction, a user must validate two other transactions on the network. A sent transaction must accumulate a sufficient level of verification (i.e. must be validated a sufficient number of times by other users) in order to be accepted as “confirmed” by its recipient. The system works with a central or single administrator called the Coordinator, without which the network is not sufficiently secured in its early stages. The Coordinator is meant to be removed later when network is sufficiently large. Iota addresses the scalability and transaction cost concerns inherent in other distributed ledger technologies which are based on a block-chain.
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The goal for the IOTA cryptocurrency is to be accepted and utilized for real world applications. IOTA has already taken steps in this direction.
IOTA has developed partnerships with giant companies like Cisco, Samsung and Volkswagen, and they are testing its technology. It is also working with the City of Taipei to give Tangle-based ID cards to its citizens.