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IOTA Seed Generator

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Following IOTA rules - 81 characters
(only uppercase letters and number 9)

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What is a seed?

It's your main password with which you log in to the IOTA network (tangle). Why no username, you ask? What else is a username/password combo than just one large password? Now consider an 81-character password made up of capitalized letters and the number 9. Now that's an IOTA password (or seed).

  • You can have as many seeds as you like.
  • Addresses are generated under a particular seed. This is a deterministic process, meaning that re-generating a seed's addresses always results in the same list of addresses, in the same order.

How to get your own seed?

IOTA and the tangle are both conceived to be decentralized and as such there is no-one to "give out" seeds or anything like that.

So whenever you require a new seed you just make one up and use it to log in to the tangle. Once you use it, it's yours - simply because it's nigh impossible for someone else to pick or guess the same one. It really is as straight-forward as that.

Do make sure you seed contains a truly random combination of A-Z and 9. Rattling the keyboards or combining some words won't do.

What is IOTA?

IOTA is a distributed ledger that uses a directed acyclic graph (DAG) called the tangle instead of a blockchain. This innovation makes IOTA uniquely suited not only for IOT, but to become the first globally accepted digital currency.

The tangle can be considered a more fine-grained 3D generalization of a blockchain. The IOTA protocol governing this tangle exhibits many more differences, but that mental picture should help you along.

Internet of Things

The Internet Of Things (IOT) is defined as the growing network of connected devices that are capable of collecting and exchanging data.

This network will allow for direct integration of the physical world into the digital realm and will soon enable smart grids, virtual power plants, smart homes, intelligent transportation and smart cities.

Three phases to IOT maturity

IOT can't mature without a transactional backbone that is secure, infinitely scalable and offers fast, zero-fee transactions. It needs to be light-weight enough to be integrated into sensors and actuators. Blockchain-based ledgers are unable to fill these requirements.

A true Machine-to-Machine Economy (M2M) will emerge as devices are able to transact and communicate with one another. Gartner says IOT will comprise of over 20 billion connected devices in a market worth 3 trillion dollars. Source

Consensus mechanism

Each ledger technology needs a way for the network to determine which transactions may be trusted. Blockchains are deterministic, meaning that once a number of blocks have been added to the chain, consensus is immediate and you can say your transaction is definitely valid. The tangle is probalistic (or stochastic). Consensus is only reached eventually, i.e. once (almost) all network participants have repeatedly said your transaction is more valid than this other transaction.

Blockchain Proof of Work

Blockchains use miners (validators) in order to have transactions validated and included in the next block. These miners require incentive to compute your request in the form of a transaction fee.

That's because these validations are deliberately complex. The blockchain protocol figures that an attacker can't out-compute the entire competition and so when being offered two blocks, it will trust the one that took the most work. So blockchains use this Proof of Work (PoW) as a means to reach consensus over which block is to be trusted.

IOTA is different

The IOTA protocol differs from blockchain's in that it looks at the number of validations a transaction has received instead of combined computing power. An attacker wouldn't need to outcompute competing validators (miners) but rather outpace the transaction influx across the tangle. Source

  • A blockchain favors the most labor-intensive blocks. The block that took the most computing power wins.
  • The tangle favors the most peer-approved transactions. The transaction with the most (direct or indirect) references wins.

IOTA Proof of Work

Consensus is fully distributed in the tangle by requiring each network participant to confirm two past transactions in order to place their own transaction. Because you're contributing to the network through this computational effort, transactions are free. It's important to keep in mind though, that this computational effort (called hashing) only serves to fend off certain attack vectors (called Sybil protection). IOTA's PoW can be kept ultra light-weight because you're signing only your own bundle. As such, the amount of work involved in IOTA's PoW bears no resemblance to a blockchain's use of PoWs. This is a common misconception.

IOTA uses Proof-of-Work as an anti-Sybil (security) measure. Every transaction has some PoW tied to it and each transaction references other transactions its issuer (acting node) treats as valid. Think of a transaction as a vote for all the other transactions it references directly or indirectly.

Among conflicting transactions, the one with the highest number of votes is accepted as canonical (authoritative). Because none of the nodes see all of the transactions, a merchant will wait until a supermajority of transactions votes in their favor. Every merchant chooses at which point they trust in eventual consensus. Is it when 90% of the tangle agrees — or rather 99.9%? The higher the threshold, the longer the merchant will wait (assuming an equal transactions influx). Source

Should someone build a graph (subtangle) which includes an invalid transaction, it will be discarded by nodes following protocol — either partly or in its entirety.

Bitcoin is different. The fundamental argument behind the incentivized ledger of Bitcoin, rather than a blast of tradeable tokens at the outset, is that the security and sanctity of the ledger becomes the imperative of the users to preserve, such that they can continue to be rewarded. Source This monetized incentive of the blockchain has long been thought to be unavoidable. A necessary evil — particularly when keeping its huge waste and energy repercussions in mind.

In IOTA though, everyone is required to contribute to the ledger's validity — and they can afford to look only at their neighborhood too, thanks to IOTA's stochastic nature. This also helps to understand IOTA's partition tolerance and offline capabilities.

Transaction mechanism

A transaction is placed by using an application called a local wallet. These are used to check your balance and send/receive funds. It's through your local wallet that you'll instruct a nearby network participant (called a full node) to broadcast your transaction to the tangle.

In order to do this, your wallet will construct a transaction bundle. That's a set of related transactions. You see, even though the tangle contains only transactions, nodes work with bundles. When we think of a transaction, there are actually multiple transactions being broadcasted to the tangle to make it happen.

One outgoing transaction per address

The Winternitz signature used by the IOTA protocol has the (huge) advantage of being quantum resistant, but at the cost of being a one-time signature technique. This means that each time you sign an outgoing transaction, you reveal a random portion of the sending address' private key. Repeat this a few times and it becomes feasible for an attentive thief to guess the entire key and gain access to the funds on the address.

Note that an address' private key is not the same thing as your seed. Wallets use your seed to generate addresses — which each consist of a public & private key. These public keys are the actual addresses. Private keys provide access to its corresponding address only. It's impossible to figure out which seed generated an address, regardless of private keys.

Only outgoing transactions require your signature. You can receive funds on the same address to your heart's content — it's only when you send from the address that you should stop using it altogether — be it for sending or receiving, e.g. as a donation address.

Transaction bundles

Of course, wallet software as well the IOTA protocol both take care to avoid mishaps. An outgoing transaction will always be bundled with another transaction which cleans out the remainder of your balance by transferring it over to a newly generated address atomically. That is to say, any full node following IOTA protocol will only consider validation once it receives all transactions making up the bundle.

This need for bundling is compounded by the fact that we have to reference branch/trunk transactions.

Transaction procedure

Suppose Alice has a balance of 100 iotas and decides to send Bob 70 iotas. This is what the bundle would look like:

Transaction Value
1. Withdraw Alice's entire balance -100
2. Withdraw for added security (complementary) 0
3. Deposit to Bob's address +70
4. Deposit to Alice's change address +30

All of these transactions will be associated with the same two past transactions you're required to validate in order to place your transaction(s).

First a raw bundle is constructed, then its bundle hash is calculated and signed. The signatures are copied into each transaction the bundle contains (with an added offset to tell which is which). These transactions are then broadcasted to the tangle for approval. All other nodes will eventually receive (see) these transactions and reconstruct the bundle for processing. At processing level, bundles become atomic because either all or none of its transactions will be approved by others. Source

Data integrity

The tangle is network bound instead of computing bound. So its main bottlenecks are routers and firewalls, rather than mining rigs and hashpower. The attacker would have to be omnipresent in the network to amass sufficient weight.

Tangle deals in probabilities. There is no global consistency in the tangle. There is eventual consistency. This is related to the CAP theorem. If your transaction is referenced directly or indirectly by every new transaction then it can be considered "confirmed" with high likelihood. Source

When a full node is asked to provide tips to a light node to create a transaction, the full node will walk backwards along the edges of the DAG to the genesis transaction and check if there are any conflicting transactions along the way. If there is then that tip is discarded. If there isn't then the tip is considered valid. Source

So full nodes are constantly being asked to provide branch and trunk tips to light nodes for bundling purposes and will only select tips free of conclict. The attacker will try and do the same with his double-spend and has to find a way to overwhelm the entire network's influx.

Pruning mechanism

New snapshots are validated by other nodes. Whistleblowing prevents tampering here. Source Subtangles can perform their own snapshots because the Tangle is partition tolerant. E.g. a group of IOT devices with limited storage can perform its own snapshot at leisure. The IOT is only interested in the current state of balances and addresses and doesn't care about transaction history. Source Permanodes do store and retain all transaction history. Permanodes differ from full nodes. Full nodes can perform snapshots while remaining full nodes. Source