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A Beginner’s Ultimate Guide To DAGs and How do they Work? We are going to see how the tangle of IOTA works. The Tangle, which is the data structure behind IOTA, is a particular kind of directed graph, which holds transactions. Each incoming transaction looks at all the currently unapproved transactions, and simply chooses two at random. The strategy for choosing which two tips to approve is very important, and is the key to IOTA's unique technology. This randomness is achieved by using a Poisson point process to model how transactions arrive.