In this paper we analyze the mathematical foundations of IOTA, a cryptocurrency for the Internet-of-Things (IoT) industry. The main feature of this novel cryptocurrency is the tangle, a directed acyclic graph (DAG) for storing transactions.
The tangle naturally succeeds the blockchain as its next evolutionary step, and offers features that are required to establish a machineto-machine micropayment system.
An essential contribution of this paper is a family of Markov Chain Monte Carlo (MCMC) algorithms. These algorithms select attachment sites on the tangle for a transaction that has just arrived.