Most cryptocurrencies try to be one thing (a viable alternative to fiat currency) and end up being another (a speculative investment). IOTA is different. This unique cryptocurrency is making huge waves in the data industry, as the IOTA platform’s underlying technology can leverage the millions of household devices in the internet of things (IoT) to secure and decentralize our data.
By 2025, we could be using 30.9 billion connected devices on the Internet of Things. The IOTA project offers a data solution that could be used at the consumer and corporate level alike. As crypto projects go, an IOTA investment is one tempting trajectory. Before we delve into how to invest in IOTA, what is this “industry marketplace,” and how does it work?
What is IOTA?
IOTA calls itself an “open, feeless and scalable distributed ledger, designed to support frictionless data and value transfer.” In other words, the IOTA network was built to facilitate data exchange between man and machine. Given the exponential growth of the Internet of Things, the IOTA idea of “enabling the machine economy” is no small feat. If we are to believe what IOTA promises, the Tangle protocol could effectively transfer data integrity back into the hands of consumers. More than just control, an ambitious use-case of IOTA would even be to monetize our data.
Imagine you are sitting at home watching your smart TV. There is a robot floor cleaner at your feet and an Amazon Alexa in the corner of your living room. Your smart thermostat is silently saving you hundreds of dollars on your heating bill, while your Fitbit watch keeps the pounds off by monitoring your calories and counting your steps. These are all examples of the Internet of Things.
Now, imagine all those above appliances are not only tracking and saving your data but enabling microtransactions between other IoT devices. The “IOTA data marketplace” could add another layer to these machines that, through no effort on your part, put money into your pocket.
Other use cases of the IOTA protocol include optimizing supply chains, enabling smart cities, and replacing passports with digital identities. Already, the Berlin-based non-profit has forged partnerships with hundreds of organizations, including Dell Technologies, Jaguar, Intel, and the EU Government.
The first thing to understand about IOTA is it does not use blockchain technology. This significant difference sets it apart from many of the top cryptocurrencies – Bitcoin, Ethereum, Litecoin all run and store their transactions on the blockchain public ledger. The IOTA crypto project looked at the inherent flaws of the blockchain technology used by other altcoins and decided to “reinvent the wheel” altogether. Enter “Tangle,” the alternative consensus algorithm that powers the IOTA network. MIOTA is the underlying token. Tangle is short for “Direct acrylic graph tangle” (DAG). Unlike the linear blockchain, the DAG network looks more like a tree with a distributed sequence of nodes. Each transaction uses MIOTA tokens and, in the process, validates two previous transactions. The benefits of this method are threefold:
- There are no fees on the IOTA network;
- IOTA is not “mined,” therefore there are no environmental issues;
- Infinite scalability: the more users, the more computing power, the faster the network.
Holding IOTA tokens (MIOTA) rewards you with network resources and enables you to create smart contracts. The MIOTA used to add value to the network transactions can be bought, sold, or traded on cryptocurrency exchanges.
Should I Invest in IOTA?
Investing in IOTA may appear like gambling from the outside. In one sense, it is always a gamble. No one can say with certainty whether the price of IOTA will go up or down from one minute to the next. Unlike a casino, however, there are ways of tilting the odds into your favor. When you play blackjack in a casino, for example, the odds are always fixed against you, usually by around 2% to 3%. That means you will lose 52% to 53% of the time. For a professional trader, these odds would be unacceptable. You want to be like the casino, not the punter. That means you need to create a system that pays out your statistical advantage over time.
Any successful trader will tell you first step to IOTA investing is to change your mindset from seeing losses and “failures” as just a necessary part of your trading plan. This means you need to anticipate price dips by setting “stop losses” (an amount at which you will sell if the price dips) and decide a reasonable margin to “take profits” (an amount you will sell if the price rises). While it’s good to be patient, simply choosing to “HODL” (hold on to your cryptocurrency no matter what) negates all the tools you can use to help your odds. You’ve got to keep percentages at the forefront of your mind, or else they will come back to bite you. You may get lucky if you make only a single IOTA investment, and keeping up to date with the latest IOTA and cryptocurrency news can give you an advantage. In time, however, this won’t be enough.
An essential ingredient to putting the odds in your favor (and keeping them there) is using chart indicators. Chart indicators are data analysis tools that help make price patterns and key information apparent to the trader. There are thousands of different chart indicators, but you don’t need to learn them all. Even using three of four indicators can give you a good idea of the likely price direction. The Bollinger Band indicator, for example, is an excellent way to spot volatility. MACD (Moving Average Convergence Divergence) is a popular indicator for finding trends in price. The “Volume” indicator is an excellent tool for viewing the amount of trading activity going on.
Interestingly, the jury is out right now on IOTA’s future price predictions. Some indicators are bullish, with prices forecasted to be up to $20 by 2025. Other indicators are neutral or slightly bearish about IOTA’s prospects (but the current dip in the market at the time of writing is likely to be the reason why).
How to Invest in IOTA
There are several ways of making an IOTA investment. The easiest option is to buy IOTA’s currency (“MIOTA”) from an exchange or an online trading platform. If you plan to hold MIOTA for an extended time, the safest place to store it is in an offline wallet. To do this, you will need to download an IOTA wallet and send the MIOTA from the platform you purchased it from to the address of your wallet. Next, transfer your wallet to an external hard drive or a USB. Alternatively, you may wish to make a derivative bet by using a CFD (contract for difference) which is a contract with your broker relating to MIOTA. That way, you can leverage more funds on a MIOTA trade using CFDs. Another popular hedging technique is “short trades,” in which you bet on the value of MIOTA falling.
Where to Make Your IOTA Investment
While there are many trading platforms around now, it can be hard to spot the good from the bad. The platform for your IOTA investment can be just as important as the trade itself. We can highly recommend our online brokerage, “TradeOr.” Not only can we accommodate IOTA trades, but we also have a long list of other cryptocurrencies from which to choose. If you are interested in trading in other marketplaces (and it is generally recommended to diversify your portfolio), we’ve got you covered. Our platform includes stockbroking, forex, indices, commodities, and more. You will be able to enact several trading types across derivative markets (such as CFDs). You can enjoy access to numerous chart indicators, and our accounting software keeps track of all your expenditures for you. We have a technical and expert support team available.
IOTA has a lot of potential, all the more so for being such a forward-looking technology. It has proven itself over the years, and it has achieved a sizeable market cap ($2.2 billion). Currently, chart indicators are contradicting each other over the future price of its currency, MIOTA. This is most likely due to the current bear market at the time of writing. Despite this, some projections still see IOTA reaching $20 by 2025, nearly 40 times its current price. If you do want to make an IOTA investment, it is a good idea to learn how to use chart indicators yourself. Next, how to invest in IOTA? There are lots of derivative bets to choose from, or you can simply purchase MIOTA. Our online trading brokerage, “TradeOr,” can meet all your trading requirements, from buying MIOTA to leveraging money with CFDs and using chart indicators.