Why IOTA coin wil be bigger than ethereum in just one year

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Iota is a cryptocurrency that aims to establish itself as the fuel for efficient machine-to-machine (M2M) transactions. It uses directed acyclic graphs (DAG) instead of a regular blockchain, enabling various features like zero-cost transactions, infinite scalability or offline transactions.

In the following, I will provide a brief introduction to IOTA. After that, I will express my personal investment-related beliefs.

IOTA

The cryptocurrency IOTA essentially solves three major flaws of todays cryptocurrency ecosystem: Transaction costs, scalibility and offline transactions.

Transaction costs

Iota is the first cryptocurrency without a blockchain. It uses the “Tangle”, which is based on DAG technology. In a traditional blockchain, various transactions are bundled in each block before this bundle of transactions is verified by miners. In the Tangle, every single transaction forms a new block and is essentially verified by itself: In order to successfully conduct a transaction, you first have to verify two randomly chosen transactions is the network. This is done with help of a very simple version of proof-of-work, therefore one could argue that transactions aren’t zero-cost. Yet, the transaction costs are essentially not existent, as the needed PoW is so low that every single device is able to independently carry it out.

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Scalibility

As every new transaction verifies two new transactions in the network, scalability rises with adoption. Therefore, the network could become indefinitely scalable, once more and more people send transactions.

Offline transactions

Via the use of subtangles that reattach to the main Tangle at a later time (when a node comes back online), offline transactions can be carried out. This property offers high promises for applications in supply chain or other industries, as nodes don’t have to be online over a whole process.

On March 31, a IOTA development roadmap was published. For more technical information you can also have a look at the whitepaper or the website IOTA support.

IOTA TOKEN

All IOTA tokens are premined and, as no mining is needed, no new coins are added to the system. In order to effectively enable micro-payments, 2779530283277761 IOTA were created. This enables transactions with minimal amounts of value.

IOTA held an ICO in Q4 2015 and was able to raise 1.191 BTC (at that time worth around $436.000). Currently, IOTA can only be traded OTC in a slack channel but the underlying price is constantly growing. At this time, one Mi (1.000.000 Iota) trades for 0.000024 BTC. This means that the current market capitalization of IOTA accounts for about 66.708 BTC. This would rank IOTA at place 14 on coinmarketcap (under Zcash and above Golem) at the time I’m writing this post.

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IOTA team & foundation

In Q1 2017 the Iota Foundation was formed in Berlin, Germany. The main personnel consists of Dominik Schiener, David Sønstebø, Sergey Ivancheglo (Come-from-beyond) and Sergei Popov. These individuals are very bright minds and talented programmers with a proven track record. Yet, one major flaw of the IOTA team is that they don’t have a marketing expert or a community manager. Dominik Schiener and David Sønstebø interact with the community but, as talented programmers they are, they simply lack social and business development skills. I believe that this hurt(s) the growth of the network. The technology is overall so superior that it still works out but from my point of view the growth of the IOTA network underperformed in the past. By adding a community manager to the team, this flaw could be fixed almost instantaneous.

The IOTA foundation is constantly adding relevant actors as members. For an overview, have a look at the medium announcements.

The process of adding IOTA to an exchange has been a controversial topic over the last couple of months. Expectations were high and team members kept saying that an exchange launch would be close, but overall nothing happened (apart to the introduction of a semi-automatic escrow/slack-exchange). I believe that IOTA will be added to exchanges over the next couple of weeks, as the demand is growing and exchanges won’t miss out on the trading fees they could achieve.

From my point of view, the price of IOTA will further rise in anticipation of an exchange launch and make one big jump up once an exchange listing is announced. After trading is launched, prices will most likely consolidate, which might be another nice entry point.

After I read the whitepaper and talked to some individuals from the IOTA community, I personally believe that the project will have a bright future. Therefore, I will likely acquire coins to add them to my mid- to long-term portfolio.