Blockchain vs the Tangle.

Author:Wilkins, Jonathan

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. Here, Jonathan Wilkins, marketing director of industrial obsolete parts supplier, EU Automation, 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.


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