As more organizations invent innovative applications faster than ever before, the blockchain frenzy continues unabated. Because of its effective communications and public ledger, the architecture popularized by bitcoin and its predecessors has proven to be a helpful instrument that offers superior security and transparency, leading to its rising use in numerous industries.
Despite this, blockchain’s spectacular rise has not been without setbacks, and there have been times where it has shown flaws that could prove to be big roadblocks in the future.
Blockchain’s capabilities have shown to be particularly well-suited to industries like the Internet of Things (IoT). Interconnected devices necessitate quick and transparent data verification, which the blockchain’s ledger excels at. Some have remarked, however, that blockchain’s rather inflexible architecture makes it well-suited for keeping limited amounts of data in a secure manner. This means it’s not genuinely scalable for things like large data storage, which has become synonymous with the Internet of Things.
This and other problems prompted a group of developers to create IOTA, a cryptocurrency platform tailored to the IoT ecosystem’s unique requirements. IOTA claims to deliver zero-fee transactions, as well as a new verification procedure that solves many of bitcoin’s scalability issues, thanks to a variation on the classic blockchain called Tangle.
Tangle is striving to establish itself as a viable alternative to Ethereum, which remains the gold standard for most blockchain-based applications. Regardless, future Ethereum-based IoT solutions may make the debate moot by providing a better way for IoT to function.
Streaming vs. Storage
One of the most contentious issues between advocates of blockchain and Tangle is the latter’s data storage capacity. IoT systems generate enormous amounts of data to interpret and store, yet most existing blockchains can’t handle it. Indeed, the technology is designed to provide reliable and secure data storage for small amounts of data.
Detractors believe that this concept is incompatible with IoT architecture, and that Tangle, with its approach to mining, provides a superior alternative. Every transaction in IOTA necessitates the user verifying two additional, random transactions, resulting in a tangled ledger that eliminates the need for mining and theoretically eliminates any fees. This makes it a viable infrastructure for IoT devices that need micro and nanotransactions to process data without increasing overheads.
Tangle architecture has a number of advantages over blockchain in this regard. Larger block sizes and volumes will take substantially longer to process in blockchain since they must be properly confirmed before being appended to the chain.
This could result in prohibitive expenses and a lack of usefulness for an IoT platform due to higher processing times. However, certain blockchain-based applications may offer a third option, utilizing Ethereum’s blockchain to address several of the system’s data storage difficulties.
Streamr, an Ethereum-based application, has created a platform for IoT devices that relies on live data streaming rather than storage. Storage in such technology, in the minds of the development team, is unneeded on an atomic level, because most gadgets require live data rather than obsolete knowledge to make the best possible decisions.
Streamr also plans to provide a marketplace that will allow IoT providers to sell their real-time data and increase the incentive for interconnection and participation. The system also includes a development environment that makes it simple to create IoT apps.
Which is the King of the Blockchains: Ethereum or Tangle?
On a deeper level, the IoT war between Streamr and IOTA involves a bigger philosophical confrontation. On the one hand, blockchain technology has shown to be a game-changer. The smart contracts and architecture of Ethereum have sparked a boom in the field and democratized information.
Tangle, on the other side, uses its verification approach to practically eliminate transaction costs and solve the mining problem. IOTA also argues that their verification mechanism eliminates many of the concerns associated with traditional mining, such as centralization. There is no reason to centralize the verification process because miners are not required to execute blocks of transactions.
Ethereum supporters, on the other hand, have argued that, despite Tangle’s ostensibly superior design, it must still be executed on hardware that isn’t designed for that type of activity. Instead, due to the binary structure of contemporary technology, verification could become clogged, resulting in higher processing times down the road.
Furthermore, systems like Streamr eliminate the need for a data dialogue by removing the burden of data storage off the blockchain. Instead of dealing with enormous amounts of data that might cause a network to fail, live streamed data provides a quick solution for IoT and decreases the total operating strain on the chain. The existing ecosystem, on the other hand, is already designed toward existing platforms like Ethereum’s ERC-20. Developers can lower development costs and avoid compatibility difficulties by building applications that blend in with the surrounding environment.
An Increasingly Tough Race
Despite blockchain’s popularity, new solutions are always developing that could jeopardize the technology’s recent darling position. Tangle is a fascinating challenger to Ethereum, which has solidified its staying power in many areas and remains the most popular development environment for blockchain-based apps.
IOTA’s design is still in its early stages, and while it has taken positive strides toward wider acceptance, it must compete with Ethereum’s existing infrastructure and first-mover advantage. Companies that build on Ethereum also have an advantage because they are already interoperable with existing platforms. Even with its custom-built design, Tangle may have an uphill battle to dethrone Ethereum in the IoT sphere with the arrival of live-data streaming capabilities from businesses like Streamr.