IOTA Foundation showcases improved algorithm with better security and scalability

The IOTA Foundation recently presented a research paper with a novel algorithm for improving the network's ability to combat spam attacks and congestion.

Each transaction requires a computer to expend resources on a proof-of-work puzzle.

The difficulty of the puzzle increases with the number of transactions sent over a given time period.

Senders can stake IOTA as collateral to reduce the overall difficulty of these puzzles.

One of the main challenges for IOTA is building a system with small, resource-constrained IoT devices in mind.

Senders with limited hardware or low collateral would be able to send a limited number of transactions cheaply.

As an additional benefit, as IOTA is tied up as collateral for sending transactions it will take coins out of circulation-increasing the price.

Unlike most major cryptocurrencies, IOTA does not use a blockchain.

Instead, IOTA leverages a different distributed ledger technology called a directed acyclic graph, which allows for multiple chains of transactions to co-exist and interconnect.

Unlike Bitcoin, which relies on miners to validate transactions and maintain network security, the Tangle instead requires the sender of a transaction to validate the correctness of two other transactions.