A guide to IOTA 2019
What is IOTA?
Iota is a German designed and high technology distributed ledger. The cryptocurrency associated with it is called MIOTA, which stands for Millions of IOTA or Mega IOTA. This cryptocurrency is designed specifically for the IoT (the internet of things) and when it comes to market capitalization, it currently has a spot in the top ten cryptocurrencies globally. As of July 8th, 2018, the total market capitalization of MIOTA was $3,158,185,693, which is based on its entire supply of 2,779,530,283 MIOTA. This is at the exchange rate of $1, 14 per coin. The peak price of iota coins reached as far as $5.24 on December 20, 2017. Iota coins are supported by all the famous and significant crypto exchanges including Binance.
The IOTA project was created by David Sontesbo, Sergey Ivancheglo, Serguei Popov and Dominik Schiener in 2015. Since its launch, it has been managed by the IOTA foundation which is located in Germany. Similar to other cryptocurrency projects, the IOTA project aims to facilitate the financial system. It seeks to make the process of payments cheaper, faster and secure.
Moreover, IOTA goes one step further from the regular cryptocurrency projects and does not limit itself to financial transactions alone. Iota also allows the movement of data from one machine to another. The IOTA cryptocurrency is called MIOTA or the IOTA coins. It raised funds through an ICO, which is the initial coin offering before it was launched. This whole project received about 3,000 bitcoins in total which were worth around $434,000 at that time. Another thing which makes the iota coin different from the other digital currency is that this project does not use the blockchain technology like the rest. Instead, it uses another form of technology which is the DAG that is ‘Directed Acyclic Graph’ and is also called the ‘Tangle.’
Through the use of the Tangle technology, the IOTA transactions are free. This is possible as the transactions happen peer to peer. The payment of one transaction is the confirmation of the two transactions previously. The process may seem slow, but within the network, there are thousands of transactions occurring per second. The verifications are spread over the system randomly which means one node would be verifying any two transactions from the whole network and then sending a transaction, which means that the network is completely tangled.
An interesting thing about Tangle system is that it does not use miners. For example, when it comes to bitcoins, some people volunteer their computer skills in confirming other people’s transactions and are rewarded with bitcoins for using their resources. They are not involved in the transactions itself but are only confirming other people’s transactions. This mechanism is called the Proof-of-Work (PoW). The main problem with this mechanism is that it gets more expensive to confirm transactions over time, because of the difficulty in mining becomes harder as more electricity and computing power is required. It eventually leads to slow and expensive transactions, and this means that the bitcoin blockchain is only able to confirm about seven transactions per second. When it comes to the IOTA network, things work differently. On this network, if anyone wants to send funds, they must also contribute to the network by confirming other people’s transactions. The whole idea behind this is to have more people use the IOTA system so that it becomes more scalable. This also means that in reality, there is no limit on the number of transactions which can be processed by the network each second, making it infinitely scalable.
What is IoT?
IoT stands for the ‘Internet of Things.’ It is an upcoming technological evolution which is quite complicated but easy to understand. It provides machine to machine communication but without any human interference. This means that every object which is connected to the internet is able to communicate with each other. For example, if you get a soda out of a vending machine, paying through your phone, this transaction would be added to your daily budget app. The vending machine, on the other hand, will process the payment and decrease the amount of inventory that it holds by one soda can that is bought by you. The cost of electricity is already included in the price of the soda can, and in case the inventory levels fall below the required threshold, it would automatically send a request to the supplier to replenish the stock. Through a drone or an autonomous car, the vending machine will be restocked with the inventory as required. In this whole scenario, there is no human interaction. One problem of this IoT system is that it was a micro-transaction on the machine to machine and did not ensure efficiency and cost-effectiveness at the same time. The tangle technology and IOTA are providing a method to make all of this happen for free!
How to buy IOTA
If you are interested in investing in iota markets and buying it, then Binance and Bitfinix are your best cryptocurrency exchange options. The Bitfinex exchange has the most substantial amount of trading volume; it is not available to buy for United States citizens. So for the U.S citizens, Binance is a better option. Even though IOTA coins have the largest market capitalization, there are only a limited number of exchanges where IOTA coins can be bought. The two exchanges where you can trade significant volume of IOTA currency do not accept fiat currency (USD, EUR) as such you may not be able to find the IOTA price as iota to USD. As such, if you want to buy IOTA, you would need to first buy bitcoin or ethereum and then trade it for IOTA.
This is based out of Hong Kong, and this exchange has one of the most significant daily trade volumes of all major cryptocurrencies. They have however discontinued serving the citizen of the United States.
This is a relatively new exchange. The company had successfully raised about $15 million through their ICO (initial coin offering) in just three minutes on the 3rd of July 2017. The exchange went live only two weeks later on the 14th of July. Binance has quickly built up a user base, and their name is consistently on the top 10 daily trade volume of the digital exchanges.
How to buy IOTA on currency exchanges
If you’re buying IOTA on the cryptocurrency exchange, you first need to register an account for yourself. For this, you need to provide a username and password. You will then be sent an e-mail where you would have to verify your user id to sign up and activate your account. Once you have activated your account, you are logged in.
There are plenty of options for the user to deposit cryptocurrency into their account, but the most popular ones are bitcoin and ethereum. Once you choose, you can then deposit and send funds to the given address, and it will show up as your available balance. Once your deposit is complete, then you can exchange that cryptocurrency for IOTA cryptocurrency. For this, you have to press on the exchange button and place your order. Binance charges 0.1% fee for a trade. The amount of IOTA you get will depend on the price of IOTA coins as per the bitcoin or ethereum you had chosen to exchange for it. Once this transaction is complete, the IOTA coins show up on your exchange account as a balance. From there, you can withdraw your IOTA coins from the exchange to the wallet of your choice.
Buying iota coins in the market is quite easy; the only hassle is that you would only be able to get some if you already have either bitcoins or ethereum with you already.
How to store IOTA
When you are purchasing cryptocurrencies from a centralized exchange, you are putting your trust in someone else to take care of your funds. The most significant risk is that in case their servers get hacked, their entire database is at risk. There have been many incidents of exchanges getting hacked into where a large number of bitcoins and ethereum were stolen. There is no guarantee that the exchange will give it back to you; that is why it is essential that you move your funds to a safe wallet, which is your own. There are two options which you can consider for storing your IOTA coins, the Trinity Wallet and the official desktop GUI.
The desktop GUI is what is suggested by the IOTA team to store your currency safely. It is available on Windows, Linux and MAC devices. When you are using this wallet, you have the option to access it as a full node or a light node. A light node will suffice if you are using the wallet for storage and transactions.
This wallet is much simpler to use as compared to the GUI. It is in Beta, which means you can encounter some bugs. No matter which device you use your wallet on, there are many options to choose from. It can be used on Mac, Windows, Linux operating systems as well as on Android and IOS devices.
IOTA wallet for android
This is a mobile iota wallet but gives you a lot of conveniences. You can download this from its official app, and it can then send, hold as well as receive your iota coins wallet to wallet. It also has a QR Scanner, iota to fiat currency exchange rate and other password tools.
Nelium IOTA Wallet
This is another iota wallet which is quite user-friendly and being developed. This would be compatible with IOS and with Android once it is released, making it a mobile-only wallet. The best part about this wallet is that it is perfect for beginners since the interface is straightforward.
Different types of Iota wallets
This type of wallet is the least secure one in the market, and it means you can have access to your coins through the internet browser. These are very convenient even though they are very risky. If you want to send somebody funds quickly, then web wallets are quite simple and easy.
A mobile wallet is where you hold your cryptocurrency on your mobile device. The sending and receiving of funds through this type of wallet are very convenient. Moreover, it also gives easy and instant access to your funds at all times, and you can also use the features of QR scanning. This is a barcode that your phone scans and then it can automatically convert your barcode into a unique wallet address. For example, in places like Japan where the cryptocurrency is actually accepted in real world stores, you can simply scan your phone at the checkout and the funds would be transferred directly to the vendor. However, there is a risk in case your phone gets stolen or gets a virus.
This is slightly more secure as compared to the mobile wallet but less convenient of course. The wallet is downloaded on your laptop or your computer, and it stores your IOTA coins offline. The only time your wallet needs to be online is when you have to send the funds to somebody. Your private keys are also not held by a third party server, and only you have access to them, this also means if you misplace them, you lose your cryptocurrency forever!
The hardware wallet is almost like a real world safe for your IOTA currency which means it is held offline in a physical hardware device and only when you plug it in, is when it is connected to the server. In order to transfer funds, you would need a pin code. In case it gets stolen the hackers wouldn’t get access to your coins, and you can recover your coins through the password recovery phase. Unlike the other wallets though, this one needs to be paid for, and it is well worth the investment, especially if you own a large number of coins.
Pros of IOTA
• The transactions are free
• Unlimited scaling
• It can process any data and not just financial transactions
• It allows instant transactions to take place
• There is no IOTA mining, and everyone contributes
Cons of IOTA
• Not a finished product yet
• It is unclear when the whole project will be ready
• There should be a centralized coordinator
• There have been quite a few technical flaws and bugs
• Many people think it has terrible security
IOTA Price Prediction
The security issues which are mainly faced by the blockchain based cryptocurrencies is eliminated in the IOTA system. This is through the DLT, the distributed ledger technology which reduces the issues of privacy in the blockchain technology. IOTA coins have quite a lot of potential for giving high returns, and it may reach $4.20 by the end of 2019. IOTA cryptocurrency is an excellent option if someone is looking to invest in a digital currency with a promising return. Moreover, the IOTA foundation has signed an MOU with the city of Taipei where around 3 million residents will be able to have transactions of data and money with the help of their ID cards and built-in Tangle IDs. This year holds a lot of development for IOTA and as such the price is expected to rise, based on the IOTA price predictions for the coming months.
IOTA price prediction for five years
It is expected to grow exponentially in the next five years and beyond. There are going to be many upcoming projects associated with the IOTA network which is expected to take it to a higher level. By the end of 2023, the IOTA price is expected to reach $9.87, and by the year 2025 it is supposed to be around $15, and it may even create history by reaching $20 by the year 2030!
Is it safe and secure?
This project of IOTA is still in the infancy stage and has experienced a few technical issues. The coordinator protocol is centralized which means if it does not work correctly, it could put the entire network at risk which has happened already a few times. This made the IOTA system unusable for a few days. Many people are also concerned that the IOTA system can be at risk of a replay attack where hackers are able to repeat a transaction without the sender knowing about it and if they are successful, they can steal other people’s coins without them finding out.
Conclusion to Buy or invest in Iota
Globally there are about 1 billion objects which are expected to be connected to the IoT by the year 2020. For this innovation, the IOTA cryptocurrency will be aiding this change. Through the tangle technology, the IOTA team has guaranteed zero fees for transactions. The IOTA team is working all ready to tackle any issues which may arise and to have a sustainable strategy in the long run. The IoT is expected to change the world with its futuristic technology, and it has a lot of potentials to be used on a global scale. If you are however thinking of buying IOTA, it is indeed a great choice. You must, however, remember that cryptocurrencies are well known to be extremely volatile and they experience substantial fluctuations, making them speculative and risky. There are many internal as well as external factors which impact the value of the cryptocurrency as such it is essential to consider these issues before you invest.