What is IOTA for Dummies | IOTA Review

What is IOTA?

IOTA sounds small, but its ambitions are huge. The Internet of Things(IoT)—a term encompassing all internet-connected devices—transacts massive amounts of data and resources every day, and this blockchain-alternative project aims to make machine-to-machine transactions into their own economy, trading data and resources between themselves.

Ultimately, they hope to become “The Ledger of Everything,” creating a currency used between smart technologies. Your solar panels could sell excess energy to your neighbor; your phone could gather weather data and sell it to meteorological computers–the possibilities are almost infinite.

How does IOTA work?

You’re probably used to hearing about cryptocurrencies and blockchains as almost the same thing. IOTA, however, does not operate using a blockchain. Instead, the developers created a platform called the Tangle, which requires participants in the network to validate two previous transactions for every transaction that they want to execute.

When you make a bitcoin transaction you are charged a fee, which incentivizes others to spend computing power validating your transaction. However, if you send a coin on the Tangle the only fee is that your device has to donate some computing power to the network. This means that devices making nanopayments at computer-speed won’t constantly be paying fees, and that the speed of the network will grow with its size—both vital considerations for an IoT application.

As the technology is still in development, there are a few kinks. Eventually it will be a decentralized network, but for now there is a centralized “coordinator” that ensures nobody can take over and exploit the currency. This is probably good, as MIT’s cryptocurrency lab found a security flaw in the cryptography in August 2017. It was quickly corrected, but raised some doubts.

Recent major developments

Despite possible concerns, major companies involved in the IoT sector have recently made large (up to seven figures) investments. Microsoft, Cisco Systems, Samsung ARTIK, Volkswagen, Fujitsu, and Bosch are all partners. Bosch have even officially bought significant amounts of the currency.

How to buy IOTA

IOTA’s coin is mostly bought and sold on Binance and Bitfinex. You can’t buy it with fiat currency yet, so here is a quick guide on how to buy IOTA starting with fiat:

1. Buy Bitcoin or Ethereum at an exchange that uses your fiat currency. Coinbase, Kraken, and Cex.io are all popular options.
2. Transfer your BTC or ETH to an exchange that supports IOTA. Currently, Binance and Bitfinex are the best choices. (Tip: if you bought BTC/ETH on Coinbase, look into using GDAX to avoid transfer fees)
3. Buy IOTA by trading your BTC/ETH for their coin, and you’re done!

Fun fact

The developers intentionally chose a name that implies multiple things, but gave no official definition. Therefore, it can be read as “Internet of Things Application” (their goal), “very small amount” (referring to their small transaction sizes), “lightweight,” or even “Internet of Things Apocalypse” (in the sense that “apocalypse” in Greek means “an uncovering of knowledge”).

More Articles for You

How to Close a Wells Fargo Account Conveniently

You may have decided that it is time to close your Wells Fargo account, but have no idea how to …

Using Bitcoin as a Payment Method for Your Business

The turbulent nature of cryptocurrencies has left many people wondering whether investing in Bitcoin is worth it or not. Between …

How to Handle Money in a Frugal Lifestyle

Let’s be honest: handling money can be hard and requires a lot of self discipline, especially if you know living …

What is the Highest Credit Score You Can Get

When people think about credit cards, curiosity gets the best of them and the question of “what is the highest …

5 Ways to Boost Your Credit and Buy a House

Buying a house is an exciting experience and one of the best things that could happen to you. However, the …

Tips for Saving Money on Groceries

Who does not want to save a couple of bucks? There are no avoiding expenses for groceries so may as …