The problem comes down to this; at the current stage, an attacker could very easily amass 33% of the hashpower of the network, because hashing only happens at the instants when new transactions are being added to the tree, and is completed in a second using a normal laptop.
I was unable to find any information on how IOTA resolves this seemingly disturbing security issue on their website or in their whitepaper, but I did find the following information in two non-affiliated blogs (1, 2) after a lot of searching:
> Milestones: Milestone is a special transaction issued by a special node called Coordinator. The Coordinator is run by Iota Foundation, its main purpose is to protect the network until it grows strong enough to sustain against a large scale attack from those who own GPUs. Milestones set general direction for the tangle growth and do some kind of checkpointing. Transactions (in)directly referenced by milestones are considered as confirmed.
This means that IOTA in its current form does not provide any censorship resistance, since the path of the tree is centrally directed through a Coordinator node run by the IOTA Foundation. As such, IOTA is no more decentralized than an Apache Kafka cluster, or Ripple and their Unique Node List.
I would argue that this is crucial information a user needs to know, yet I have no idea how the average person is intended to learn about this, since it’s nowhere to be found in the IOTA whitepaper or on their website. (EDIT: Since this article was written, IOTA published a post regarding this matter https://blog.iota.org/the-transparency-compendium-26aa5bb8e2.... I responded to their post https://medium.com/@ercwl/hello-david-b77bbc62c457 )
They seem to have developed their own hashing function, of the sponge family, called Curl - and are actually using the Westernelitz (oh jesus spelling, more space-efficient Lamport) signature scheme - it is a method of constructing a digital signature only from hash functions. Cool.
Not to argue semantics but its isn't a chain. It may have blocks (containing one transfer) but it is by no means linear. This lets the tangle achieve verification parallelization. Which is in contrast to blockchain’s strictly sequential, synchronous ledger.
Seems to be more promise, hype abd marketing, than what it says on the tin.