A Cryptocurrency for the IoT

IOTAgeralt / Pixabay

The amount of data in the world is growing at a pace never seen before. Companies have been rushing to be the first ones to store and manage it efficiently. In fact, it’s created an entire industry: cloud storage.

Twenty years ago, when the internet was just starting out, nobody could have imagined that there would be buildings dedicated to housing giant servers full of data. At least, not at this scale. For example, there’s a data center being built in Nevada that will be 7.2 million square feet when it’s finished. That’s over twice as spacious as the world’s tallest building.

A lot of this data has been generated over the Internet of Things (IoT). The IoT is the network that is made up by devices “talking” to each other by sending data. This is the future, and it’s called the “machine-to-machine economy.”

Right now, there are over 20 billion devices connected in the IoT. And by 2025, that number is expected to grow to 75 billion. So, the amount of data in the world is only going to go up, and at an exponential rate.

The emergence of blockchain technology since the invention of bitcoin has taken security to a new level.

And as blockchain has continued to prove itself, companies have been showing interest in somehow securing data in it. The appeal of blockchain is that it’s decentralized, and therefore extremely hard to hack.

Now the IoT is about to take its level of communication a step further. Soon, machines will be able to purchase data from each other using a new form of cryptocurrency called IOTA.

IOTA: Not Your Average Cryptocurrency

An example of IOTA being used would be a smart meter in a building selling its data on electric, gas and water usage to a utility provider. The buying/selling could be continuous or once a day. Or it could be a computer buying more cloud storage or computing power.

The transactions would be quick, and you wouldn’t have to do anything, hence the term “machine-to-machine (M2M) economy.”

And for a transaction to get confirmed, two other transactions that preceded it need to be confirmed before it. So, as it gets used more, there will be more transactions to reference, and the speed of payments, or “scalability,” will continue to get faster.

IOTA does not use blockchain technology. It’s on a different platform called Tangle. Without getting into the technical side of how they differ, an extremely important feature of Tangle is that there are no transaction fees.

These payments between devices will be a few cents at most. So having a transaction fee, which is part of doing any sort of buying/selling on a blockchain, wouldn’t make sense. Tangle is the first alternative to blockchain, which gives IOTA an extreme advantage.

In fact, the IOTA Foundation, which created Tangle, recently formed a partnership with some pretty big names. Companies like Microsoft, Bosch, Cisco and Samsung are giving IOTA a test run right now in the “data marketplace.”

A Limited Resource

The IOTA Foundation has a display on its website that lets you see all of the data sources currently participating on Tangle here. If you click on the locations on the map, you may notice that the prices are hundreds to thousands of IOTA.

If you look at the price of an IOTA online, it’s several dollars. So, to clear up any confusion, the price you see online is for a MIOTA, which is 1 million IOTA. Now the prices on the map look a lot smaller. If a MIOTA is $4, that means 2,500 IOTA is worth one cent.

Another feature that sets it apart from the rest of the cryptocurrencies out there is that there will never be any more IOTA coins “released.”

With typical cryptocurrencies, a fraction is sent out to the public at the beginning of its existence, and the rest are “mined” into existence over the course of years. But whenever a resource becomes more plentiful, it dilutes the price. As the demand for IOTA goes up, but the number of outstanding coins stays the same, the price will keep going up.

Thankfully, there is an easy way to invest in this cryptocurrency. To see a step-by-step guide on how to buy IOTA, click here.

Right now, IOTA is already the fifth-largest cryptocurrency in the world, with a total value of over $12 billion. But if it can capture a monopoly on the micropayments industry, it could grow substantially.

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About the Author

The Sovereign Investor
The Sovereign Investor Daily delivers timely and actionable information to succeed in any market. We realize that a world of investment opportunity exists in stocks, commodities, currencies and asset protection that are often overlooked. Our mission is to bring them to you each day.

8 Comments on "A Cryptocurrency for the IoT"

  1. I don’t know about a better system than DAG is in this moment. When people realize what advantages this system brings to us, then start to transfer their money to the cryptos like IOTA, based on this new revolutionary DAG technology with many differences.
    No fees, No waiting for a long time for a confirmation from miners, no forks = no fakes cryptos, no confusing in the future similar like by the BTC forks. Thousands of transactions per a second. No scalability problems. Better security system.

  2. Internet of things will be everywhere – it is going to be in every device we will use. Data and informations from every sensor will have the biggest value. This is revolutionary coin.

  3. Internet of Things is the market of the future, in the 1-2 years, there would be lot of devices, sensors, home appliances and also even connected cars, that would need to communicate and exchange payments. IOTA offers the technology to do this – no miners, no fees, instant transactions, communication not only over internet but it can also use other protocols – Zigbee, bluetooth, and even can work offline and then transfer the data when connected. The technology is robust, market potential – by 2020 there would be billions of devices and IOTA is already working at testing this technology with the teams from major IoT companies in their devices. IOTA would be soon traded also on all of the big crypto currency marketplaces, which would attract new investors to this technology.

  4. That’s true, we’re talking billions of dollars in a few years. If IOTA gets a major share of this, it will be huge.

  5. IOTA has a lot of potential. Being a DAG-based cryptocurrency, it solves the main problems of blockchain cryptos. Now with the announcement of important partnerships with big companies, it also got a lot of credibility and is becoming mainstream.

  6. Cryptocurrency with bright future. No troubles with miners, scalability, no fees, cooperation with large corporations. That speaks itself. And actual price? Funny for possible potential of this coin.

  7. IOTA is my favorite coin, because they use a 3rd generation of cryptocurrency technology and eliminate this way so many troubles which we can see in blockchain. IOTA will be for long time part of my portfolio.

  8. IoT will be the huge market and IOTA knows it. It is great target for the company and great opportunity for investors. IOTA will have the big lead in this branch and that means lots of money from the market.

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