DAG (Directed Acyclic Graph) which is a directed graph without cycles. In IOTA there is no ledger as in normal blockchains instead they use a DAG called Tangle.
No Transaction Fees
In most Blockchain networks the transaction cost is often a matter. But IOTA is not charging any fee for the transaction. The IOTA is mainly designed to perform Nano transactions and these Nano transactions will be executed without any fee. The IOTA can create both private and permissioned networks of IoT and can manage the transactions with Tangle without any transaction fees.
In case of a Blockchain mining is a vital element, but IOTA is an exception to it. There is no miners or mining process in IOTA network. So how the transactions are verified in IOTA? The tangle just needs a verification only. And the verification is done by the node who generated the transaction, with the help of a validation algorithm. But the node will be able to proceed this transaction only after verifying two other random transactions in the network using the same validation algorithm.
Instead of the Bitcoin protocol, IOTA uses the GHOST(Greedy Heaviest Observed Sub Tree) protocol, which is a modified version of bitcoin protocol itself. GHOST just modify the bitcoin protocol by creating a tree instead of a blockchain.
In IOTA, the priority of the transaction is measured with the help of ‘weight’ associated with each transaction. DAG is a weighted graph and the weight of each transaction is proportional to the amount of work that the issuing node invested into it. And obviously, the transactions with higher weight will get higher priority than the transactions with lower weight
IOTA offers a high level of security for both transactions and assets. The data transfer through the tangle will be in encrypted form and fully protected from external attacks. IOTA uses the masked massaging technique to ensure the security of data transfer. In Masked messaging service, the data is encrypted with quantum proof security which makes the data broadcasting also easy.
Starting from the weight calculation to restricting an external attack, IOTA employs several mathematical equations which are capable of detecting any small changes in the graph. This highly mathematical approach ensures the protection of data from any kind of external attacks.
The combined advantage of blockchain and IoT has already brought many application areas to IOTA. As the IoT and blockchain are expanding rapidly, more existing services may come under this technology in near future.