Network security

1. Crypto currency of The Future
Presented by,
Fathima Murshida K
M-Tech,S1 CSE
IOTA

2. Contents
● Introduction to Bitcoin and Blockchain
● Blockchain
● Problem with Blockchains
● Introduction to IOTA
● IOTA : Architecture and Design
● IOTA : Key highlights
● IOTA use cases: Internet Of Things
● Possible Attack Scenarios
● Conclusion
● References

3. Introduction to Bitcoin
● Digital Currencies - DigiCash (1990), Paypal (1998)
○ Central Authority, Higher transaction fee.
● History of Bitcoin.
○ By Satoshi Nakamoto in 2008.
○ Decentralized and distributed public ledger of records.
○ A worldwide payment system.
○ Peer to peer transactions, no intermediary.

4. Introduction to Bitcoin
● Bitcoin (Contd.)
○ New coins are created as reward for process called mining.
○ Creator of Bitcoin, Satoshi Nakamoto still remains unknown!!!
○ Nakamoto implemented the software as Open source.
○ He disappeared in 2010 and handed over the responsibility to
Gavin Anderson.
○ It works using the concept of a blockchain

5. Bitcoin Price Chart

6. Introduction to Block Chain
● The double spending problem
○ same single digital token can be spent more than once.
● How to solve this problem without the need
of a trusted authority?
● Block chain is a continuously growing list of records,
called blocks, which are linked and secured using cryptography
● Distributed ledger
● Each block typically contains
○ A hash pointer as a link to a previous block
○ A timestamp
○ Transaction data
● Data is stored across the network

7. Structure of block chain

12. Problems with block chain
● Very high transaction processing time.
● So many unconfirmed transactions at a time.
● Higher transaction fee (given to miners)
● Transaction uncertainty
● Average transaction fee is 1$ !!! (for bitcoin)
● Problems with mining

13. Electronic transactions, speed
comparisons

15. Distribution of Bitcoin mining power

16. Classical computer vs Quantum
computer

17. Introduction to IOTA
● IOTA is an open-source distributed ledger (crypto
currency) focused on providing secure
communications and payments between machines
on the Internet of Things.
● It’s features are
○ Unlimited simultaneous transactions!
○ Fast confirmation time!!
○ System scales easily!!!
○ No transaction fee!!!!
● IOTA is named after ι (iota, the smallest Greek
symbol)

18. Introduction to iota : A brief history
● Very recent technology.
● Founded in 2015, beta tested in 2016, initial Investment done
in 2017 ,Ready to go for production in 2018!!!
● Founded by David Sønstebø, Sergey Ivancheglo, Dominik
Schiener, and Dr.Serguei Popov.
● Supported by the iota foundation, iota.org

19. IOTA :Architecture and design
● It uses a Directed Acyclic Graph (DAG) technology instead of
the traditional Block chain system. (Linked list vs Graph)
●A fixed supply of 2,779,530,283,277,761 Iota are already
created.
● No more IOTA can be created as there is no mining!
● For each transaction to happen, the user verifies two other
randomly selected transactions.
● When a transaction is verified a sufficient number of times,
It is said to be accepted or confirmed.

20. The Tangle, also known as BlockDAG
● Each square represents site / transaction
● It contains
○ sender
○ receiver
○ amount of coins

21. ● it also has a connection to atleast two other transaction

22. IOTA : Transaction

23. IOTA : Transaction

25. IOTA : Transaction
● In order to issue a new transaction, each node does the
following.
○ The node chooses two other transactions to approve according
to an algorithm.
○ The node checks if the two transactions are not conflicting,
and does not approve conflicting transactions.
○ Adds new transaction to the tangle and verifies two other
transactions
●Asynchronous parallel transactions are possible!
● In case of conflicting transactions, a tip selection algorithm is
used

26. Tip selection algorithm for the tangle
● Some definitions :
○ Weight : amount of work that a node has done to make this
transaction
○ Height : the length of the longest oriented path to the genesis
○ Depth : the length of the longest reverse-oriented path to
some tip.
○ Cumulative Weight : the own weight of a particular transaction
plus the sum of own weights of all
transactions that directly or indirectly
approve this transaction.

27. An example of tangle
Cumulative weight:1+1+1+1+1+1=6

28. ● Transaction with high cumulative weight are usually older and
have more direct or indirect verification

29. IOTA Highlights
● In bitcoin, the consensus (verification) is decoupled from
transaction generation and is largely performed by a
smaller subset of network, leading to some kind of
centralization.
● But in IOTA, every participant in the network making a
transaction also actively participates in the consensus.
● Validation is parallelized and network stays completely
decentralized
● There are no blocks in the classic sense.

30. IOTA Highlights
● Tangle solves two issues scalability and mining
○ scalability: light weight and don't need full copy of the
tangle to add transactions. Only need small part
of the tangle to create and verify transactions
● in iota no miners means no fees!!!

31. IOTA use cases: Internet Of Things
● Data Integrity
○ Real time updates
● Bandwidth on demand
○ Pay per byte system for IOT devices
○ Share resources and pay
● Supply Chain - Data Syncing
○ importers / exporters.

32. Iota in smart charging
• Introducing IOTA in Smart Charging.mp4

33. Conclusion
● With infinite scalability and 0% transaction fee, IOTA and The
Tangle really is an improvement over the traditional
blockchain system.
● As the time goes on, IOTA will be moved to the IPI and the
transactions will get faster and the network will get more safer.
● This new trending cryptocurrency stands in 9th place of all
cryptocurrencies by market cap.
● Definitely worth buying!
● 1 MIOTA only costs ~4$ as of now.
● IOTA is also quantum-resistant.

34. Scalability comparison

35. References
1. Serguei Popov “The Tangle” https://iota.org/IOTA_Whitepaper.pdf
01-10-2017
2. Kimchai Yeow, et al. Decentralized Consensus for Edge-Centric
IOT http://ieeexplore.ieee.org/stamp.jsp?tp=&arnumber=8168250
01-10-2017
3. Satoshi Nakamoto, Bitcoin: A Peer-to-Peer Electronic Cash System
https://bitcoin.org/bitcoin.pdf 31-10-2008
4. Best of ICOs, IOTA Coin Review https://hackernoon.com/iota-
coin-review-6a1c73c5cfa3

36. “There are three era’s of currency:Commoditybased,
politically based and now, math based”
- Chris Dixon
Thank you!