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IOTA is an open-source, permission-less distributed ledger. Its protocol is a directed acyclic graph (DAG) called the tangle instead of the traditional blockchain. Where a blockchain is a linked list where every block points to a unique descendant, in the tangle, a block links to two previous blocks. This linking is intended to convey a confirmation of the previous blocks. IOTA began open beta testing on July 11, 2016.
The system is peer-to-peer, with transactions taking place directly between users and with an Coordinator intermediary. Transactions are considered confirmed when the Coordinator has included the transaction in its set of released milestones. In order to send a transaction, a user must validate two other transactions on the network. A sent transaction must accumulate a sufficient level of verification (i.e. must be validated a sufficient number of times by other users) in order to be accepted as “confirmed” by its recipient. The system works with a central or single administrator called the Coordinator, without which the network is not sufficiently secured in its early stages. The Coordinator is meant to be removed later when network is sufficiently large. Iota addresses the scalability and transaction cost concerns inherent in other distributed ledger technologies which are based on a block-chain