What Is IOTA (MIOTA)?
Updated: March 16, 2022
IOTA (MIOTA) is based on a new type of distributed ledger. The system was created with the aim of becoming the standard mode of conducting and recording transactions between machines and devices in the Internet of Things (IoT) ecosystem. The IOTA coin, MIOTA, accounts for in-network transactions and attempts to deliver secure, feeless payments and communications.
The IOTA protocol relies on Tangle, IOTA’s answer to blockchain technology. By relying on a network of nodes to confirm transactions, rather than blocks, Tangle is the innovative means by which IOTA proposes to solve persistent problems plaguing crypto: scalability, high fees, and slow transaction times.
Read on to find out more about IOTA’s unique technology, how it’s being integrated with IoT technology, and why investors might consider trading MIOTA coin.
How Does IOTA (MIOTA) Work?
IOTA is a distributed ledger and platform that links Internet of Things (IoT) devices by transmitting data. IOTA claims to be the backbone of the IoT and is poised to be integral in the industry’s growth. More broadly, the IOTA Foundation is eyeing opportunities in IoT infrastructure for smart cities, global trade, digital identity protocols, and ehealth.
Unlike standard blockchain with sequential nodes, Tangle uses a directed acyclic graph (DAG) with a nonsequential sequence of nodes to confirm transactions. The nodes are connected only in a particular direction, and transactions are processed simultaneously instead of sequentially. As more systems are attached, the Tangle becomes more secure and efficient at processing transactions.
A notable feature of IOTA is that there are no transaction fees for IOTA payments regardless of the size, and validation is nearly instantaneous.
IOTA lends itself to industry-wide scaling because, according to its founders, it has solved the problems that have plagued standard blockchains. These are the centralization of mining to a specific group, low network speeds, and scalability. Other blockchains have been difficult to scale because transactions become backlogged.
Advantages and Disadvantages of IOTA (MIOTA)
Like many crypto platforms, the IOTA protocol is not yet proven, and there are pros and cons that investors should be aware of.
The advantages of IOTA are its uber-fast transaction rates. This speed allows IOTA to be scalable and offer micropayments and even nano-payments, with no fees.
Thanks to its innovative use of DAG technology, IOTA is far more energy efficient compared with the familiar proof-of-work model used by Bitcoin and Ethereum, among others.
IOTA’s disadvantages lie primarily with its technical challenges. MIT found that the network could be vulnerable to security breaches. For example, in 2018 criminals launched a phishing attack on the IOTA network and stole $11 million worth of IOTA. Also, Vitalik Buterin, cofounder of Ethereum has voiced doubts concerning DAG’s scaling capabilities.
• IOTA’s transaction rate is faster than many other crypto because consensus is not necessary.
• Has been subject to theft, and MIT found a vulnerability with its hash function.
• Because transactions are faster, IOTA is scalable.
• Vitalik Buterin, co-founder of Ethereum, has cast doubt on IOTA’s ability to solve scalability issues.
• The IOTA coin, MIOTA, facilitates micropayments — even small amounts are feeless.
• Use of DAG technology to create a blockchain alternative (Tangle) is unproven.
Who Created IOTA (MIOTA)?
Sergey Ivancheglo, Serguei Popov, David Sønstebø, and Dominik Schiener are the co-founders of IOTA, which began as an IoT hardware chip manufacturer. That project was called Jinn, and it held a crowd sale for its tokens in September 2014. Although the sale was relatively successful, there was some dispute as to whether the coins could be considered security tokens.
As a result, Jinn was rebranded as IOTA in 2015, and another token sale was held. The tokens were marketed as utility tokens this time around, and holders could exchange their tokens for equivalent value in the new system. Later, the founders explored the concept of a decentralized network.
Why Does IOTA (MIOTA) Have Value?
IOTA has forged partnerships with large corporations to gain traction in the burgeoning IoT industry. For example, IOTA hopes to enable various IoT integrations in the electric car market, including insurance usage and charging payment systems.
According to Statista, the global market for IoT end-user solutions was expected to grow to about $1.6 trillion by 2025, which could provide various opportunities for IOTA’s innovations. The Iota platform claims to have unmatched scalability and endless use cases in the IoT market. For example, creating smart cars that can pay for parking and battery charging, securing data integrity in supply chains, revolutionizing health care, or building energy-efficient intelligent factories.
Price of IOTA (MIOTA)
As of March 15, 2022, MIOTA was worth about $0.70, with a market cap of $1.95 billion and a total circulating supply of 2.78 billion MIOTA.
Since its inception in 2017, ADA maintained a low of just a few cents throughout most of 2018, 2019, and 2020, but the price began to rise significantly in February of 2021. It reached a high of about $3 in September of 2021.
Why Use IOTA (MIOTA)?
IOTA has the potential to revolutionize the IoT sector. IOTA is a unique alternative to blockchain, which is difficult to scale for industries like the IoT because traditional blockchain technology requires consensus, and consensus causes backlogs. IOTA also permits micropayments with no fees.
IOTA is working to reduce the energy footprint of crypto networks. The Iota Foundation is pursuing low-energy initiatives and green use cases. For example, digitizing and reporting its sustainable performance in Chile, exploring the use of solar panels for energy in electric vehicles, and improving supply chain efficiencies.
How Can I Buy IOTA (MIOTA)?
First, find platforms or exchanges that enable MIOTA trades. Also, be sure to review how crypto exchanges work, as well as any fees that may apply.
Step 1. Choose an exchange and set up an account.
Set up a crypto trading account and then fund it with a secure wire transfer from your bank, or even with a credit or debit card transfer. Check with your bank in the case of restrictions. Fees may apply.
Step 2. Set up a wallet to store your assets.
Just as you might keep money in a physical wallet, cryptocurrencies are held in digital “wallets.” Be sure to select a crypto wallet that supports MIOTA.
Note that some crypto exchange accounts come with a custodial wallet, and there may be restrictions about moving your crypto off-platform.
Step 3. Trade MIOTA.
Once you’ve completed your trade, you can transfer your MIOTA holdings to your wallet. Or you can leave your holdings there if you plan to keep trading — or hodl them, as they say in crypto-slang.
Sharing Personal Data
Depending on where you choose to trade crypto, you may have to supply different forms of identification. Some exchanges adhere to Know Your Customer (KYC) rules, a common set of standards that require investors to disclose certain information. Others may allow anonymous or P2P transactions.
Similar to trading securities, there are cryptocurrency fees to consider when trading crypto. Be sure to understand the associated costs that may come with trading crypto on one platform versus another, or using one form of payment versus another.
How to Sell IOTA (MIOTA)
Once you’ve decided to sell MIOTA, the next step is deciding whether you plan to cash out for a fiat currency like U.S. dollars (USD) or trade another type of crypto.
Step 1. Decide what to sell.
If you’re exchanging MIOTA for USD, the steps may be different than if you’re buying another form of crypto — or you may have to complete a more extensive KYC identification.
Step 2. Find the best price.
Crypto prices fluctuate by the minute, so do your research beforehand so you know a good offer when you see one.
Step 3. Sell MIOTA.
Complete the trade and move your crypto (or cash) to your wallet, unless you plan to keep trading on the exchange.
Step 4. Keep taxes in mind.
Remember that crypto gains are subject to taxes. Be sure to consider the tax implications of selling MIOTA coin, and consult a professional as needed.💡 Recommended: What Is Crypto Tax-Loss Harvesting? How Does It Work?.
Does IOTA (MIOTA) Have Staking?
Crypto staking is a way for token holders to lock up crypto holdings and obtain rewards or earn interest for doing so. Iota announced the official start of IOTA staking in December 2021.
According to the IOTA website, by using Firefly 1.3.0 “IOTA holders can stake their IOTAs in return for SMR, the native token of the Shimmer network and ASMB, the native token of the Assembly network.”
In other words, IOTA stakers that they can be rewarded in either SMR tokens, ASMB tokens, or both, with no lock-ups, additional cost, or penalties.
IOTA offers an alternative to traditional blockchain technology. It provides fast transactions with no fees, which other blockchains lack because of their sequenced node technology. IOTA’s Tangle network uses non-sequenced nodes, and the IOTA foundation claims its Tangle technology will form the backbone of the IoT industry.
IOTA has forged partnerships with several large corporations. Given the growth potential of IoT solutions, IOTA could see wider adoption. The IOTA platform claims to have unmatched scalability, and proponents of IOTA envision vast opportunities for the crypto’s applications in sectors from electric vehicles to supply chains, ehealth, and low-energy smart city infrastructure.
The crypto ecosystem is rapidly evolving, and trading crypto is becoming easier for investors. When you open an Active Invest account with SoFi Invest®, it’s simple to set up a crypto account and start trading crypto, for as little as $10. SoFi doesn’t offer a crypto wallet or staking. Trade securely 24/7 with a SoFi brokerage account.
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