Identity on the network comes in two flavors: One is the identity of the user; the other, the identity of the device. In the case of the IoT, where there often is no user in the traditional sense, authenticating the identity of the device itself is critical, and a blockchain has been introduced to establish and maintain those device identities.
The basis of the IOTA model is the "tangle," which is a combination of Full Nodes (defined as a full peer-to-peer member of the network) and Light Nodes (which must connect to Full Nodes in order to complete transactions). It is a variation on the traditional flat blockchain, but it does allow less powerful IoT devices to be part of the verified chain and remain fully identified and trusted.
The distributed ledger of blockchain has found application in many fields, from cryptocurrency to supply chain. Much of the excitement about blockchain is due to its reputation as an inherently secure technology. As with other emerging technologies, the biggest question is not seen as whether blockchain can be used in security, but in which applications it is best used today.