Blockchain vs. Tangle

The Blockchain vs. Tangle

in Editor's Picks/Popular/Technology by

THE ONE where the blockchain is seen as old school …

Tangle technology “succeeds blockchain technology as its next evolutionary step.” This is a quote from the IOTA white-paper and might seem to some as quite an odd statement: isn’t it a bit too early to be talking about the next evolutionary step for what is essentially a technology in its embryonic stages?

The world is still waiting, after all, for its first blockchain products of mass adoption – its Yahoo moment, the blockchain Facebook, Amazon, Uber and Tinder. They are coming, but they will need time.

It appears, then, altogether quite visionary – and daring – when some assert that the blockchain is nothing more than an inefficient, out-of-date mastodon in need of a radical overhaul. That is, however, the claim that Tangle’s proponents put on the table.

You Scratch My Back, I’ll Scratch Yours

This may be, on the one hand, a sign of our hyper-postmodern world – where even a revolutionary innovation is considered out of date not long after it has emerged from its Pandora’s Box.

On the other, the criticisms aimed at blockchain technology are often legitimate.

Whilst consensus mining started out with good intentions, it has introduced a whole range of issues – ecological, political, and practical. It is believed, for instance, that only a handful of mining operations are now seizing the vast majority of the rewards handed out by the Bitcoin network for participating in its Proof-of-Work protocol.

A sign of the times – even a revolutionary innovation is considered to be outdated

And it is precisely these issues which the Tangle’s inventors have set out to solve with a much more robust approach – one that also includes incorporating resistance to the advent of quantum-computing which some believe may be the Blockchain’s Sword of Damocles.

Under the Hood

Designed primarily for the impending machine economy – where IoT devices are expected to collaborate and transact with each other – the Tangle seeks to implement a more localised consensus mechanism.

The idea is fairly simply – instead of seeking sign-off from the entire network for its transactions, a node simply collaborates with some of its nearby neighbours in order to be granted such sign-off.

The approach implies a higher degree of trust which, by definition, leaves a wider margin for manipulation. On the other hand, Tangle implements reputational scoring – the idea according to which some nodes have a better track history of providing legitimate information in comparison to others.

Where the Tangle goes further, however, is in the expectation laid down by its protocol that any node which wants to benefit from the security offered by its consensus mechanism, also needs to contribute to that network by providing evidence of its own contributions to establishing network trust.

It is, in other words, a You-Scratch-My-Back-and-I’ll-Scratch-Yours system, in stark contrast to the blockchain where a node can in theory – and often does in practice – delegate the establishment of trust to others.

Whilst that may imply that an individual node can get away with doing very little, it also means that, overall, the entire network takes longer to get anything done. It is, then, a trade-off – and it is precisely this trade-off nature which implies that Tangle technology cannot be expected to supplant the blockchain but rather complement it.

So, the IOTA white-paper may be jumping ahead of itself – instead of representing the next evolutionary step, it more likely qualifies as a new evolutionary offshoot.

And each of the two technologies will likely continue to adapt to their own specific use cases, ultimately ending up as two entirely separate species with Bitcoin as a common ancestor.