Blockchain vs the Tangle

  • July 30, 2018
  • Feature
Blockchain vs the Tangle
Blockchain vs the Tangle

By Jonathan Wilkins, Marketing Director, EU Automation

Apple versus Microsoft, Uber versus Lyft, Amazon Video versus Netflix. Technology companies are constantly advancing their product or service offering to remain competitive in their fields, particularly when they have a large rivalry. As cryptocurrencies become more popular, their creators are vying for new customers. This article explains how blockchain and the Tangle differ and what both can do to improve manufacturing practice.



Cryptocurrencies, such as Bitcoin, have the potential to radically change the financial sector. They use technology that stores and processes sensitive information in a way that is easy to trace but difficult to hack.

Blockchain, the digital ledger that records cryptocurrency transactions, logs each set of transactions as blocks and chains. The data is distributed over a large network of computers, rather than just one, to protect the data and decentralise control.

Blockchain is in the early stages of development, so its future is unclear. However, there are currently some limitations stunting its growth.


Secure But Slow

The main criticism of blockchain-based cryptocurrencies such as Bitcoin is speed.

Miners verify transactions that are added to the blockchain and monitor the system to keep the network secure from hackers. However, miners are incentivised to complete transactions as they receive a fee for every block created. The diffused nature of blockchain makes it inherently secure. Any individual or group of people with malicious intentions would need to control 51 per cent of the nodes on the entire network to manipulate the transactions and balances.

Currently, blockchain miners complete 4.5 transactions per second whereas Visa completes 4,000 transactions per second. It would be difficult for Blockchain to reach this scale because when more blocks are created, the system becomes slower. For the Blockchain to become mainstream, issues with speed and scalability must be resolved.


Enter the Tangle

The IOTA foundation considered these limitations when it created the Tangle, a technology to rival the blockchain. It ignored the process of block and chain, choosing instead to develop a directed acyclic graph (DAG), or a collection of non-circular nodes that allow connectivity and transactions between humans and machines.

To complete a transaction in the Tangle, you must verify two other previous transactions. There is no need for miners to power the network – users can help the system grow. The Tangle also processes micropayments and machine-to-machine payments, encouraging machine connectivity and removing transaction fees.

Each node will become more secure as more related transactions are made, making it more difficult for each transaction to be tampered with. The verification speed of the network becomes faster as more devices join it, which means that. the more devices there are using the Tangle, the more secure and scalable it becomes — a crucial advantage for cryptocurrencies vying for a position as the de facto alternative to non-digital currencies.



Blockchain and the Tangle are both in the early stages of development, so we are only starting to see the potential. However, when looking to the future, the Tangle could have more potential in manufacturing applications.

IOTA developed the technology to help companies realise Industry 4.0 and markets the Tangle as the backbone of the Internet of Things (IoT). Any internet-connected device can securely complete transactions using the Tangle. As the technology refines, machines will be able to complete secure transactions without human interaction.

Despite being the most talked about technology hosting cryptocurrencies, blockchain is not the only solution to online, secure transactions. Competitors, such as IOTA, are developing technologies that remove the limitations of blockchain. In the future, rather than choosing one based on price or the one with the latest model, manufacturers should look to the goals of each system to determine which service will benefit them most.

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