IOTA vs Blockchain

By Robert Koenig

Robert Koenig
4 min readMay 24, 2019


There is something I don’t understand. Here in the US, every time I listen to a crypto influencer talking about IOTA, I hear mainly negative things. Like most of us, I am hooked on the crypto industry, and in 2016, I started looking into IOTA. I learned that IOTA has a different architecture from the traditional blockchain architecture, and I learned that if you come from the blockchain world, the tangle is not easy to understand. You need to learn that there are no miners, that proof of work is used differently, why transactions are free, why it is scalable, why it is not sequential, etc.

There are over 2000 cryptocurrencies out there, of which over 1000 are probably already inactive. For a project to be successful in the long term, it needs to be clearly differentiated from all the other projects. There is no shortage of blockchain and/or crypto ideas, but there is a real shortage of ideas that will gain widespread adoption. The internet has been extremely effective because it is the layer upon which we make transactions in a variety of ways. From my point of view, a protocol has to focus less on delivering infrastructure as a service and more on delivering a platform as a service (with the exception of Bitcoin, of course). IOTA fits into this category.

Transaction volume, storage space, and decentralization

For any platform-type of business, the lifeblood is transaction volume.

As an individual, it is difficult to see the impact when the number of transactions increases, but if you work in a corporate environment or a data center, you know that an exponential increase in transactions will cause major issues. Full nodes form the backbone of a blockchain. A full node downloads the entire blockchain and is the key to the decentralization of the system. The size of the Ethereum blockchain, for example, is currently around 250GB, and it takes several hours to sync the 8 million blocks of a full node. While I accept that data storage is cheap, I have a problem seeing a long-term solution: There is currently no serious transaction volume on the Ethereum blockchain, yet the size is already 250GB. Data storage will become an issue in the future, and the use of larger databases also means the need for more powerful computers. More powerful computers mean centralization, as not everybody can afford a powerful computer. Once the transaction volume increases significantly, scalability will become an issue. But for IOTA, that is not a problem, as from time to time, the system runs a so-called “snapshot” that removes all data and thereby keeps the size of the nodes manageable.

Miners, fees, and decentralization

With Bitcoin, you have blocks of a finite size, and you can put a certain number of transactions in them. These blocks are linked together sequentially like a pearl necklace, creating a bottleneck, as the network can only validate one block at a time, and you can only fit a certain number of transactions in a block. Also, the miners who validate the blocks are incentivized to pick the blocks with the highest fees, so with an increase in transactions, the fees go up. IOTA got rid of the blocks, removed the sequential architecture, and instead implemented a solution where every new transaction validates two previous transactions, similar to a mesh. Validating two previous transactions has become an intrinsic value of utilizing the tangle, and therefore, there are no fees or miners.

The result is the elimination of the oligopolistic centralization that exists in the blockchain architecture because there is no incentive to own the hashing power. There are no block rewards, and there is no incentive to pull resources together to control the network.


If you want to start using a blockchain, you need to hire a blockchain expert. Developing and maintaining current blockchain-based programs is highly complex and requires specialist knowledge. Even simple programs require a good knowledge of that blockchain. With IOTA, it is different. It is simple to use the libraries and tools available. For example, within a few hours on a Raspberry Pi, I was able to create a simple program (less than 50 LOC) that uses an RFID reader and records data on the tangle. On the other hand, just try to create a token on the Ethereum blockchain and include some smart contract capabilities. It is not possible if you have not been trained.

So what am I missing?

From a purely logical point of view, the features of IOTA win most comparisons hands down, including the most important ones: true decentralization and scalability.