The impression that the cryptocurrency market might give, from the flooding of it with coins and the media furor surrounding it, is that it is perfectly poised for imminent take off, launching us into some glorious era of economic equality and unprecedented spending power.
This is not true.
There are several hurdles to cross first, not the least of which is the limitations of the technology itself. Even the pioneers of the technology, such as Vitalik Buterin, acknowledge that much development is required before it can become of any significant commercial use. The truth is that Bitcoin and Ethereum, and by extension the more recent coins, cannot scale to a level where they can process transactions for daily use. The problem is very direct, but the solution not so much.
If you take some time to research some of the alternatives to Bitcoin, Ethereum, Litecoin and Ripple, you’ll discover that many of them are designing their own unique solutions to the problem of scaling, while also addressing other technical challenges and optimizations.
IOTA (MIOTA) is one of these coins – few altcoins have raised as much investment interest. There are numerous reasons as to why this technology has become the talk of the cryptocurrency community. They are addressing numerous issues that are serious obstacles to cryptocurrency’s growth and they are doing so in a rational manner.
Let’s take a look at what makes this coin so special.
What is IOTA?
Along with blockchain and Artificial Intelligence, another burgeoning technology niche is the Internet of Things (IOT). It is essentially a network of smart devices capable of communicating and working with each other – and this is precisely where IOTA would like to employ its platform.
Stating themselves that they would aim to make IOTA act as the “backbone of the Internet of Things”, IOTA wants to bring the benefits of a Directed Acyclic Graphs (not blockchain technology, we’ll get to this shortly) – distributed computing, secure data, zero fee transactions – to devices which will soon be connected and operating with each other in a global network.
IOTA’s intentions are to bring secure communication and payment mechanisms to this field. Being connected to the cloud, it also allows most electronic devices with network capabilities to be rented out as a service (more on that later). IOTA believes that their proprietary technology, the Tangle, will help achieve this goal.
To understand IOTA’s objectives, it’ll do well to know a little more about the Internet of Things.
What is the Internet of Things?
The internet of things is actually a simplistic concept, in principal. Various devices – such as phones, computers, elevators, refrigerators and even cars – supported by electronic sensors, network connections and other glorious technological innovations, that can communicate and exchange data with each other form the Internet of Things.
It is basically the internet…with devices. In a sense, it is the same as the internet we know today, except it works with a very specific set of data.
Is this technology worth anything?
Picture the “I forgot the milk” scenario today. You’ve just come back from the grocery store. You open up the fridge to load in your groceries, only to realize that you forgot to pick up milk. In an IoT world, your smart-fridge could communicate missing groceries (discerned through sensors installed in the fridge) to your smart-car, reminding you of the necessary purchases as your car realizes through Google maps that you’re heading to the grocery.
This is a only a very trivial example of what IoT could do.
The IOTA Technology
IOTA’s technology is what has so many people interested in the project. The team is looking at both the medium and long-term implications and challenges of this industry. Unlike many other other projects, they are both spotting these and addressing them in a realistic way.
The key point here is that IOTA is not blockchain based. Rather, it operates on something called the Directed Acylic Graph (DAG). Like the blockchain, the DAG is a distributed ledger, but it performs better and can scale to greater numbers. The DAG allows for micro and nano transactions, giving developers more to work with in implementing applications.
This system, called the Tangle, solves the problem of scalability and reduces fees to nothing – the holy grail of cryptocurrency development. Bitcoin currently suffers from high transactions fees and while solutions are being developed, is it not yet ready. IOTA is thinking two steps forward with the Tangle and it is realistic that they might pose the major coins some challenge in the near future.
In the Tangle network, every transaction is required to confirm two other transactions. In this kind of system, the expected transaction rate could possibly be millions of transactions per second. Counterintuitively, the more users get on the network, the faster it becomes. This is an incredibly remarkable way of dealing with the scaling problem.
There are obstacles in this system however. Imagine if the network became, practically speaking, infinitely large. How would the network handle transactions? The verification process would take a great amount of time. The team is looking at solutions to eliminate this problem.
There’s another interesting aspect to the Tangle. It is quantum proof. Commercial quantum computing is going to arrive sooner or later. The predicted date is about 10 years from now. The issue with this is that quantum computers will possess the computational power to break the cryptographic methods used to secure blockchains, rendering them useless when it happens.
IOTA is quantum proofing the network by introducing special digital signatures into algorithms. This is indicative of excellent vision and could potentially strengthen their long term chances of survival. IOTA’s whitepaper is well worth a read.
The IOTA Team
IOTA has been in function for a very long time now. The IOTA team has been working on blockchain technology since 2011, but the IOTA foundation and the project itself was put together in 2016. They are supported by an experienced and knowledgeable team.
David Sonstebo is the the CEO of IOTA. He has particular knowledge in IoT, smart cities, distributed ledgers and eGovernance, among other things. He seems to be behind IOTA slow but steady entry into cryptocurrency, through reliable partnerships and careful PR management. It is easy for cryptocurrencies to ride on hype and then crash, but Sonstebo and the team are being vigilant to prevent IOTA from suffering the same fate.
IOTA’s team has also drawn in a lot of academic experts, which is important in an industry that is still in the research phase. The team continues to grow and involves individuals from all across the world.
What Do the Numbers Say?
As of writing this article, IOTA is valued at $2.33. It has a market cap of $6.4 billion and is ranked 11 on Coinmarketcap. The maximum supply of coins is roughly 2.77 billion coin, all of which are in circulation. The coin’s value has spiked greatly in December 2017 and has been on something of a decline since, which is fairly normal in this new kind of market.
All in all, IOTA has been doing very well. Yes, in January of 2018, it has been dropping, but the overall feeling is that this is that rare coin that is backed by strong fundamentals and development, possibly putting in the position of jumping greatly in value in 2018.
IOTA also has a very active and enthusiastic community. This is essential for any coin and public support is a crucial stepping stone for mass adoption. IOTA has been checking off the criteria for success steadily.
By any standard, IOTA is a sound investment. They are taking a very serious and realistic approach to their project, unlike many other projects out there, which are nothing more than well disguised scams. There is a no-nonsense characteristic to their project and we are glad that there are some projects with an eye on goals, not fundraising.
IOTA’s technology is by far their most eye-catching aspect. There is nothing else in the cryptocurrency world that can hold up against Tangle. That it is quantum proof is further proof that there is some serious practical thought going on behind the scenes. It serves as further incentive for investment.
Now, the IoT industry is already here – albeit in the very earliest of stages. IOTA is operating in a very lucrative space that could genuinely benefit from the technology that they are offering. Like it or not, we are going to live in a world that’s even more rooted in hardware and software. There is reason for IoT players to work with IOTA and this puts the latter in an excellent position to grow.
Furthermore, IOTA has already partnered with the likes of Microsoft, Fujitsu and Deutsche Telekom. These are no small time entities. The backing of giants such as these, who all work in different spaces, is a significant milestone in any project. Any coin would like a partnership with one of these – IOTA has them all.
This project partnership has involved twenty companies and involves the monetization of the data market. Data is now a commodity and it is growing at an exponential rate. We know data is valuable, but are yet to develop full-fledged systems that can help make use of it.
IOTA has also seen good growth in the market, as we have mentioned. 2018 will the year where they are really tested, with many development milestones on the horizon. There are reasons for all coins to be hopeful and worried about what will happen in 2018. The fear of a bubble burst is very real, as government regulation looms on the horizon. Yet, the growth of platforms and real world use cases also approach.
How to Buy and Store IOTA
It is easy to purchase and store IOTA. Many exchanges support the coin. The team has also created its own wallet for storing IOTA. Bitfinex, Binance, IOTA exchange and Bit520 are some exchanges on which you can buy IOTA.
However, you’ll need to buy IOTA with Bitcoin or Ethereum. Let’s take Binance as an exchange for an example/ To buy IOTA, make sure your Binance account has some Bitcoin or Ethereum. You can send these coins to your Binance account from another wallet. Once you have this, you can exchange Bitcoin or Ethereum for IOTA’s tokens on Binance. It’s as simple as that.
If you are unsure about how to perform any of these actions, then you should definitely spend some time learning about how to choose a wallet, set one up and trade on exchanges. These are basic tasks that will take place often if you plan to invest in cryptocurrency.
IOTA is definitely a coin to keep an eye on. The technology is solid, the team is focused, development is moving along and there is a definite need for the services they are offering. The Internet of Things industry is just about to entrench itself in our daily lives.
Our world is going to become more data driven. IOTA is carving out a cozy little space for itself where it can serve the needs of already established companies and industry services, which puts it an advantage. We can expect to see a great deal from this project and 2018 will be the year it grows from childhood into adolescence.
There will be a few tantrums, as is expected from any coin, but IOTA is a rare one that displays a commendable level of maturity. There are few coins that can be recommended with such certainty, but IOTA is one of them.