r example: g has a depth of 4 to TIP A. Path = F,D,B and A.

It’s a 3 step process to make a transaction

1) Signing – You sign the transaction inputs with your private keys.
2) Tip selection – Markov chain Monte Carlo is used to randomly select two tips (i.e unconfirmed transactions), which will be referenced by your transaction.
3) Proof of Work: In order to have our transactions accepted by the network, we need to do some proof of work- Similar to hashcash.

Your node checks if the two transactions are not conflicting. Next, the node must do some proof of work by solving a cryptographic puzzle (hashcash). Hashcash works by repeatedly hashing the same data with a tiny variation until a hash is found with a certain number of leading zero bits. This PoW is to prevent spam and Sybil attacks. A Sybil attack is based on the assumption, that half of all hash power is coming from malicious nodes.

Once you’ve done that, your transaction will be broadcast to the network. Someone else will come along, choose your transaction in the tip selection process and validate it. And just like that, transaction is confirmed.
• It’s quite easy to determine the confirmation level of your transaction: it executes the MCMC algorithm N times, the probability of transaction being accepted is therefore M of N.
• As a merchant, in IOTA you have complete freedom to decide with what probability you will start accepting transactions. If you are happy with 51% transaction you can increase the threshold to 99 or 100.

How does IOTA prevent double spending

• In the tangle, transactions are atomic. During processing though, bundles are.
• 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 general 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.