The IOTA is a new cryptocurrency specially developed for the Internet of Things (IoT). The IOT stands for connections that exist between all kinds of electronic devices. Consider, for example, the refrigerator that supplements your supply of milk or the heating that automatically goes up a few degrees when you are inside. The idea of the Internet of Things is that everything is connected to each other.

The IOTA then offers a decentralized technology that can be used to connect all this information. This does not use the blockchain like the bitcoin. No, IOTA uses the new protocol Tangle. But what does this new protocol mean?

What are the benefits of IOTA?

The new system behind IOTA has the necessary functions. As with the normal blockchain, the technology ensures that information that is exchanged cannot be manipulated. This makes financial transactions safer. With the Internet of Things, there is a chance that someone will hack your fridge to collect the money that normally goes to milk.

However, there are even more advantages that IOTA offers thanks to the Tangle protocol:

Costs: transaction costs are greatly reduced because they are decentralized.
Scalability: the system is easy to prepare
Security: the system cannot be hacked
Availability: the system is always available
What makes IOTA different from the bitcoin?
The big difference with the bitcoin at IOTA is the fact that miners are not required. Normally, the capacity of the blockchain is limited because only a limited number of transactions can be performed per mined block. However, the Tangle protocol does not have any mining at all, since it uses Directed Acyclic Graph which is a new cryptographic decentralized network that can be scaled indefinitely.

This all sounds complicated and although the technology behind it is interesting, you are of course curious about what it exactly means. Well, the IOTA requires little processing power to carry out transactions, which means that this can take place on all modern equipment. All devices with which IOTA payments are made are in fact connected to each other, and for each executed payment the device has to confirm two other transactions. As a result, sufficient capacity is always available for carrying out transactions.

IOTO protocol

Here you can see clearly why the capacity of IOTA is always sufficient

Invest wisely in IOTA
The technique behind IOTA is certainly promising: especially the unlimited capacity within the new protocol is interesting. However, it is important to take into account several things when you invest in IOTA. Firstly, it is very important to do enough research before buying up IOTA.

The price of the IOTA is largely determined by the market sentiment. Cryptocurrencies are a lot in the news and a positive or negative news item can strongly influence the price. It is therefore important to take this into account in your investments. When, for example, a positive news item about the underlying protocol of IOTA comes out, it may be a good time to buy the IOTA.

For the rest, it is important to invest wisely. Do not invest more money than you can miss. It is also wise to use a stop loss when investing in IOTA. In this way, you prevent a major loss from a sudden sharp decrease or increase. Also remember that although the technology behind the IOTA is promising, it will not yet be with certainty the currency that will drive the Internet of Things. Buy only a small number of IOTA coins and spread your risks!