The so-called “Internet of Things” (IOT) is a fascinating development in interconnected tech, through which anything from your toothbrush to your wristwatch can be hooked up to the internet. And now, with IOTA coin, there is a cryptocurrency to go with this manifold matrix of mechanisms.
Rather than relying on mining, as with traditional blockchain coins, IOTA innovatively utilises the Internet of Things to replace the shared ledgers underpinning traditional cryptocurrencies with self-verifying transactions via a blockless distributed ledger known as the Tangle.
The upshot of this potentially revolutionary new system is an end to transaction fees, better scalability, the possibility of offline transactions, and a host of other advantages for users. For developers and businesses, the Tangle architecture provides a new set of tools, such as micro and nano-transactions: previously impossible with blockchain-based coins.
The crunch in the price of bitcoin and the lack of liquidity in new altcoins means there is definitely a space on the market for new types of cryptocurrency. The question is, does IOTA coin represent a worthwhile investment? Or this product of the sharing economy a tangled web of empty promises? Let’s take a look…
What is the Tangle?
Rather than using a global blockchain, IOTA Coin employs a Directed Acyclic Graph (DAG) called the Tangle to enable its various features. Instead of verifying transactions through mining, as with a traditional blockchain, each transaction on the Tangle forms a new block that is internally self-verifying. To enter transactions into the Tangle, each user much act as a node for two or more transactions, doing away with the need for a shared ledger.
As a result, consensus (determined by miners’ votes in blockchain-based cryptocurrencies) is an intrinsic part of this new system. As a result, not only is the peer-to-peer Tangle decentralised, it is also self-regulating. There are no third parties or mining communities are involved at any stage of the verification process: everything is handled by the system itself.
The IOTA Coin is a token rewarded to uses how become relays in the Tangle, because every transaction forces nodes (networked objects) to perform ‘work’, which improves their integration in the Internet of Things and increases data security. Unlike in blockchains, this doesn’t slow down transactions ‒ it actually makes them more efficient over time.
What are the Advantages of IOTA Coin?
Firstly, the Tangle dispenses with transaction fees. Data is signed and hashed by a node in the internet of Things, with security ensured with immutable hash values that maintain the integrity of the data pertaining to each transaction. This also allows the coin to handle microtransactions ‒ unworkable with blockchains because transaction costs make the exchange of very small amounts of currency pointless.
IOTA Coin is also highly scalable, unlike dominant cryptocurrencies such as Ethereum and bitcoin. Only time with tell whether the recent bitcoin fork will resolve the issues around transaction speed and computing recourses imposed by bitcoin’s 1-megabyte cap. Meanwhile, the slow start faced by the Bancor Network (and the diminishing value of BNT) demonstrates that Ether is less scalable than many had expected (or hoped).
By contrast, the IOTA Coin operates on the basis of a permissionless, distributed ledger in an environment between devices that make countless calculations and interactions every minute. As such, this coin has a great deal more scope for scalability than either bitcoin or Ether.
Finally, IOTA Coin allows for offline transactions, because its nodes will operate with or without an internet connection ‒ they simply store data on the transaction and complete it when a connection is achieved. This means you could make a transaction at any time, and coins will appear in your ledger as and when you find a hotspot.
How to Buy IOTA Coin Online - Step-by-Step Guide
You can pick up IOTA Coin at many popular exchanges ‒ we recommend Bitfinex. The easiest means of buying it is with USD (the only viable fiat currency for buying this coin at the moment) or bitcoin, which you can obtain at the Coinbase client. Below we offer a straightforward guide for purchasing IOTA Coin using Coinbase and Bitfinex:
- Get over to Coinbase.com and set up an account. You’ll need to enter basic details such as your name, email, current location and some photographic identification.
- Once your account is up and running, choose a preferred funding method ‒ such as a linked bank account for transfers or a credit/debit card. Purchase some bitcoin and you’ll be ready to go.
- Next, head to Bitfinex, grab your Bitcoin wallet address and send some bitcoin from Coinbase to your Bitfinex balance.
- Click on “Trading” to see the markets and the performance of IOTA relative to bitcoin, then enter the amount of IOTA you want to trade in the relevant field.
- That’s it ‒ you’ve successfully obtained IOTA Coin. Happy trading!
What is The Internet of Things?
The Internet of Things is a network of real-world, physical smart devices that are able to collect, store and exchange data. Any device embedded with the requisite electronics can potentially form a node in the Internet of Things. This permits better integration of real-world objects with computer systems, and allows data to flow efficiently and autonomously across the network.
IOTA is a dedicated cryptocurrency for the burgeoning Internet of Things industry, that uses nodes in the IOT to store data on transactions. The network is asynchronous, meaning that nodes don’t always see the same set of transactions and do not have to achieve consensus on which transactions go in the ledger, but in the case of conflicting transaction uses a tip selection algorithm to ascertain validity.
What Is the Value of IOTA Coin?
Currently, IOTA coin is trading at a value of around 50 cents (USD) and has a market cap of $1.5m, which is pretty modest by all accounts. As with Bancor and safecoin (tokens whose potential value is based on the success or failure of their lofty ambitions) this is a low-risk purchase whose future is difficult to predict.
At the moment, IOTA isn’t the most compelling investment but (true to its design) it has at least proved stable, enjoying a quick spike to $1 USD in August 2017 and then hovering around the $0.50 USD mark ever since. The success of the coin rather depends on the ubiquity of the Internet of Things, which is itself a fairly young industry. However, the B2B possibilities of microtransactional models with cryptocurrency and machine-to-machine transactions are quite significant.
As with many coins that seek to change the game and break the cryptocurrency trading scene out of its rut, it would be a grave mistake to judge IOTA’s potential on its current market value. With the future of bitcoin presently in some doubt, this is one worthy of your attention.
Future of IOTA Coin Trading
IOTA has a great deal of advantages, and is predicted by some as much more likely to be embraced as a ‘normal’ payment method than the likes of bitcoin or Ether. By resolving issues with transactions fees and speed, IOTA is certainly more workable in the context of a general store. It also potentially resolves the issue faced by Ether’s unlimited supply, which is currently pushing down its value, and bitcoin’s absurd market cost and achingly slow transaction speeds.
One issue that holds IOTA back is the fact that transactions currently have to be handled manually, which is quite a tricky and technical process, which could raise an insurmountable barrier of entry for average Joes. That being said, the coin is still at proof of concept, and with smartphones serving as potential nodes in the IOT, the penetration of necessary tech is certainly there for IOTA to flourish.
For our money, the real appeal of IOTA is its potential to become integrated in the real world. Let’s face it: the world of cryptocurrencies is pretty esoteric to the uninitiated. Not to mention the fact that this coin has received great interest from the Chinese market and multinational tech companies like Microsoft. Reputable investors like Jamie Burke getting on board is also a good sign.
The key thing with IOTA is that it gets over the hurdle faced by many altcoins that inhibit their capacity to ‘go mainstream’, in that this is a currency that you can actually spend – quickly, and at no additional cost. This is the kind of advantage with the chance to render blockchains obsolete (unless the blockchain currencies find a way to catch up and make themselves palatable).
As the price of bitcoin spirals to absurdity, there is a lot of room for a more user-friendly and day-to-day applicable currency on the market. Could IOTA be it? Only time will tell.
How to Buy IOTA Coin with Credit Card
If you want to buy IOTA Coin with a credit card, you must use USD, as this is the only fiat currency that is currently usable for purchasing this coin. Alternatively, you can pick up another cyrptocurrency that is tradable with different currencies (like bitcoin) and trade for IOTA in the manner described above. After you have created and verified your Coinbase account, you can select credit, debit or bank transfer as a preferred method for getting currency into your balance. If you opt for a credit card, you will benefit from generally faster transaction speeds and better security.
You can add cash to your Coinbase balance with a credit card in exactly the same way as with a bank transfer. Once your card is verified and stored, simply choose the amount of USD you want to put in your balance or the amount of coin you wish to purchase for your wallet. Remember you will be charged a small transaction fee if you wish to add cash to your balance with a credit card. However, credit and debit cards are needed for lower limit purchases, so this might be unavoidable. As soon as you have some USD or another coin in your wallet, you will be able to purchase and trade IOTA using the handy, step-by-step guide above!
How to Buy IOTA Coin with PayPal
Good news for US-based users! The beta PayPal services on Coinbase allows you to manage transfers directly to and from your PayPal account by linking it to the client. All you have to do is add PayPal as your preferred payment method, and then verify your personal PayPal account with Coinbase. You can then get USD into your Coinbase wallet with which to purchase IOTA, make withdrawals (in fiat) or purchase bitcoin and Ether, which can in turn be exchanged for IOTA.
PayPal benefits from a high level of data security and instantaneous transfers: the only downside are low limits on transactions and a small fee applied to each one. Although this payment method is presently restricted to the US, Coinbase has promised to add PayPal support for other territories in due course. We’ll be sure to keep you updated!
Cryptocurrency Guide list
Enjoyed this Bitcoin guide? Then see our other cryptocurrency guides:
- How to buy and trade Bancor
- How to buy and trade Bitcoin
- How to buy and trade Bitcoin Cash
- How to buy and trade Dash
- How to buy and trade Dogecoin
- How to buy and trade EOS
- How to buy and trade Ethereum
- How to buy and trade Ethereum Classic
- How to buy and trade Factom
- How to buy and trade GameCredits
- How to buy and trade Gnosis
- How to buy and trade Golem
- How to buy and trade IOTA
- How to buy and trade Litecoin
- How to buy and trade MaidSafe Coin
- How to buy and trade Monero
- How to buy and trade NEM
- How to buy and trade NEO
- How to buy and trade Peercoin
- How to buy and trade Potcoin
- How to buy and trade Ripple
- How to buy and trade Steem
- How to buy and trade Storjcoin X
- How to buy and trade Stratis
- How to buy and trade Tezos
- How to buy and trade Waves
- How to buy and trade Wings
- How to buy and trade Zcash