IOTA: platform overview, features, how to earn on IOTA cryptocurrency
The Internet of Things is a network of electronic digital devices that can be controlled remotely. This system can autonomously collect and process data, and generate the result a person needs to make a decision. The Internet of Things includes smart homes, city system monitoring, data collection using sensors in agriculture, etc. IOTA is a payment system with a unique security protocol and Tangle transaction confirmation system. In this article you will find out more about the integration of IOTA in the Internet of Things, the advantages, disadvantages and prospects of the cryptocurrency.
IOTA and the Internet of Things: Integration with Perspective
The Internet of Things, Tangle - these and other terms appeared in the cryptocurrency world with the advent of the IOTA platform (MIOTA). In 2017, the cryptocurrency market faced an unprecedented influx of investors and people interested in the blockchain technology. Payment and transaction systems (BTC, Monero, LTC, Dash) faced serious issues:
• Problems of network scalability, transaction speed and cost. The existing system simply could not cover the influx of people.
• Transaction confirmation problems. For any protection there is always someone who wants to hack it. This is how 51%, Sibyl and other kinds of attacks appeared. But cryptocurrencies are supposed to be the most secure data transfer option, which means the problem had to be resolved very quickly. Someone switched to other consensus algorithms (more about this in this article), others found more radical solutions.
IOTA developers have proposed their brand new idea in the midst of the cryptocurrency technologies facing a new challenge - in 2017. Below you will learn what IOTA is, what the novelty of the idea is, how to make money on this cryptocurrency, what are its advantages, disadvantages and prospects.
IOTA cryptocurrency: description, benefits and how to make money on it
What is the Internet of Things? According to Statista, in 2017, the number of devices connected to the Internet exceeded 20 billion, and according to Cisco, by 2020, this figure will increase to 50 billion. Internet of Things is a single digital network of devices controlled remotely. For example:
• Refrigerators, kettles and ovens that can be controlled remotely from a smartphone.
• Smart sensors in fields, drones with cameras to monitor the condition of crops in the fields, fires in forests and even analyze the state of the soil remotely.
• City management: planning transport routes, noise and pollution levels with sensors, analysis of traffic jams and automatic control of traffic lights, etc.
The Internet of Things (IoT) is a single network of devices connected as M2M without human intervention. This system collects, generates, and analyzes data to help people make decisions. It is possible that in the future a person will be able to program the oven to cook scrambled eggs cooking, and the oven will find the best price for eggs, place an order, arrange delivery and make delicious scrambled eggs in the morning all by itself. Now the Internet of Things is a network overloaded with devices with communication problems similar to the scaling problem in cryptocurrencies.
According to the developers of IOTA, the communication system on the Internet of things will require its own internal currency. Therefore, it was decided to focus on the development of the payment system with the optimal transactions speed and complete security - in other words, on which will eliminate the problems of BTC and offer a cryptocurrency that will act as a link between the nodes of the Internet of Things.
The work on the platform began in 2015. The first attempts to collect start-up capital using crowdfunding did not succeed. Though, not many people were interested in cryptocurrency in those years. The successful beta testing of the platform in 2016 attracted the attention of strategic investors:
• By the time of launch in 2017, Samsung, Volkswagen, Microsoft were among IOTA's partners, and cooperation with the German Foundation for the development of the Internet of Things began.
• In the same year 2017, a large investor Outlier Ventures entered the startup investing an amount 7 times higher than the estimated cost of the platform.
• In June 2018, the largest Norwegian bank DNB ASA became interested in Tangle technology and entered into a partnership with IOTA.
• In July 2018, IOTA and Startup +CityChange were among the participants in the 5-year smart city development project. Thanks to it, the development of energy-saving technologies began in 7 cities of the EU.
• In August 2018, the REFUNITE database containing information about missing people was transferred to IOTA.
• Robert Bosh VentureCapital, a venture fund, has become another institutional investor.
• In April 2019, the British Jaguar Land Rover began testing smart contracts based on IOTA technology. The developed program will be a smart wallet for cars.
• In May 2019, IOTA entered into a partnership agreement with Avery Dennison Corporation, a global manufacturer of clothing labels, protective films, and paper for the food and medical industry.
How it works. IOTA does not have a blockchain in the sense of BTC or ETH. The developers have created their own data structure system - the Tangle transaction log. WHile in blockchain information is recorded in a block, Tangle has neither blocks, nor chains or miners. Each network participant who wants to do a transaction must confirm two previous transactions (participation in the network consensus). In other words, each new transaction confirms previous two random transactions.
Advantages of IOTA cryptocurrency:
• A promising idea. The Internet of Things will be developing at a very fast pace in the next 3-5 years, and its integration with the blockchain is an interesting solution. IOTA has no strong competitors yet, because a full launch of the platform can turn the platform into the leaders of the cryptocurrency market.
• Ability to perform minimal transactions. The network allows for a transfer of 0.001 cents (US dollars). In theory, in the future this should allow to give remote orders to perform small tasks: start a program for household appliances (washing, cooking in the oven), open a tap, etc.
• A unique encryption method different from the elliptic method used in most cryptocurrencies. I will not describe it in detail here.
There is no mining, 2.8 billion tokens were emitted at once, a little more than 1 billion were issued.
Where to buy and store IOTA cryptocurrency
1. Cryptocurrency exchanges. Like other attractive coins, IOTA is included in the listing of many large and small exchanges. In total there are about 15 of them, which is quite enough even for earning on arbitration. You can buy the coins for BTC, ETH, USDT, BCH, BNB, and OKB (Binance Coin and OKEx exchange coins), or for fiat currencies USD, EUR, GBP, JPY, and KRW.
The trading volume on exchanges is distributed as follows:
• Binance. This exchange accounts for about 20-25% of trading volume in various currency pairs. However, in the trading volume structure of the exchange itself, the coin is listed below the 40th position, lower than the less eminent startups. It is noteworthy that in 2018, the situation was much more optimistic.
• HitBTC. About 20-22% of daily trading volume falls on this exchange, in whose structure IOTA still trades outside of the top 20.
• Bitfinex. Another 10-12% of the trading volume of coins is here.
The remaining trading volume comes from smaller exchanges. In general, the picture is relatively good: IOTA is quite interesting for investors who work exclusively with exchange accounts and with several dozen cryptocurrencies at the same time.
2. Cold wallets. Since the platform is less popular than BTC and ETH, there are some problems with cold wallets. Developers offer Trinity wallet available in mobile and desktop versions. Its beta version was introduced in August 2018, but a full-featured version is still under development. You can download the wallet for any operating system on the IOTA website.
3. Brokers. Trading cryptocurrency via brokers is another option for earning, which has several advantages:
• Brokers never get hacked (unlike exchanges and various kinds of wallets).
• There is a possibility of earning on a short position, i.e. you can earn on the decline of the rate.
• Here you can also earn on classical instruments: oil, currencies, gold.
LiteFinance broker offers you to get acquainted with cryptocurrency trading opportunities using the example of the IOT/USD pair and share your opinion in the comments
IOTA cryptocurrency prospects for investors
IOTA is one of those cryptocurrencies commonly referred to as “black swans”. For a long time, it was in the top 10 and was considered one of the most interesting from the point of view of investing. Nevertheless, in terms of the PR campaigning and media coverage, it was losing heavily to BTC, ETH and their forks. Even Stellar and ZCash were ahead in this regard. It seemed that the startup was about to soar and was steadily in the TOP-5, but the opposite happened - the coin flew out of the TOP-10 to the TOP-20.
Despite the promising idea, its implementation is still not great. In 2017, almost immediately after the ICO, the discovery of a vulnerability in the transaction confirmation system collapsed the coin by 15%. And although the developers did not agree with the error found, the investors voting with money considered otherwise.
The problems continued in 2018. A number of users faced the problem of forming a secret phrase in the IOTA wallet and turned to third-party resources to generate a phrase. After a while, these users began to lose money. The total loss was about 4 million dollars. At the same time, the network suffered a powerful DDoS attack. Developers ignored the problem again and said that “the users were to blame for entrusting code generation to third-party resources”.
And other disadvantages of the cryptocurrency:
• It does not have a functional wallet, which is unacceptable for a cryptocurrency of this level.
• Despite the interest of investors, there are no examples of real application of the platform functionality. Until all this is only a theory.
• We are not talking about decentralization yet; the platform has a coordination center.
The chart of the coin can be described as classic: a sharp rise in the general wave of growth of the entire market, and then a sharp collapse. So far, the coin is worth less than at the time of ICO, although with the growth of the entire market it is possible that the situation will change. Therefore, recommendations to investors are as follows:
• Earn on short-term intraday fluctuation in either direction.
• Invest a small share of the funds with a horizon of at least 6-12 months.
Unlike the lower echelon cryptocurrencies, when the market reformats, IOTA has a chance to stay afloat. Therefore, as a risk diversification, a coin may be interesting in the long term. But I would not recommend counting on it very much.
Conclusion. The Internet of Things is promising in the relatively distant future. In the same relatively distant future, blockchain technology is also promising. But how promising the symbiosis of both these directions is difficult to say. The Internet of Things already has concrete achievements and results of development, whereas the situation with cryptocurrencies is more than unstable and precarious. Most of the platforms are abandoned by developers, security problems are not resolved, the status of cryptocurrencies is not legally regulated.
Possible risks of investing:
• After a fundamental transformation of the cryptocurrency market, the equilibrium price may be lower than the current one.
• IOTA developers may leave the project after getting their profits or the integration of blockchain into the Internet of Things will be unsuccessful.
A positive scenario is also possible, but can hardly be expected this year. As an alternative to BTC, one might consider the IOTA, but within reasonable limits. I will be glad to discuss the prospects of this cryptocurrency with you in the comments!
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Price chart of IOTAUSD in real time mode
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