Can you answer this (quoting myself from another post):
Iota introduces an interesting new concept in the crypto scenario: the directed acyclic graph, or DAG. Basically it's an evolution of the usual blockchain, requiring no fees and without scaling issues.
Nevertheless, after having a quick look at the white paper I still don't understand how the nodes will keep working continuously. In the "tangle" there are no miners, the beloved greedy workers of the Bitcoin blockchain. Instead, here to perform a transaction, you should verify other transactions first. In the white paper (
http://iotatoken.com/IOTA_Whitepaper.pdf) they say:
what motivates the nodes to propagate transactions? In fact, in our setup the nodes do not have motivation
not to propagate. Every node calculates some statistics, one of which is how many
new transactions are received from a neighbor. If one particular node is “too lazy”, it
will be dropped by its neighbors. So, even if a node does not issue transactions (and
hence has no direct incentive to share new transactions that approve its own one), it
still has incentive to work hard.
I'm not convinced by this statement. In fact, let's say that I'm a node and I don't want to be excluded by other nodes (and even on this I would like to understand what it means to be excluded. If you start again working hard can you be re-admitted? I could work only if I need to do transactions).
If my fellow nodes work x, I could work 0.99 x to not get excluded and minimize my work. But this reasoning can be applied to every node, since electricity has a cost, so everyone one will lower its effort, resulting in a system that perform poorly.
As to why a node would want to propagate here is how I understand it:
1) the difficulty is not high with IOTA, it can't be because anything with a processor needs to be able to perform a tansaction. This includes cell phones, modems, desktops, laptops, etc.
2) the more neighbors, the faster the network grows/operates. Would a visual help? This is the tangle live:
https://tangle.blox.pm/you basically have a new way to connect with every new neighbor, so it makes sense you'd want as many neighbors as possible that are not "lazy". If your node is lazy, you essentially are not operating on the network to full capacity and get blacklisted. Electricity costs for this is negligible. The "proof" does not require a miner, only a device containing a small amount of processing power.
I'm not extremely technically savvy, but I have tried to keep up since I have a decent amount,