IOTA – What is it and Why is it Important?

First up, total disclosure, I have bought some IOTA and this post is NOT an attempt to get you to buy some and push the value up, it is a post giving a brief overview of IOTA, why it MAY be a good investment and how to buy IOTA without giving up your identity to the Internet.

Second up, never make an investment if you could not afford a total loss, you shouldn’t have to worry about eating cat food during your retirement.

What is IOTA?

IOTA is a cryptocurrency, similar to Bitcoin, in that it has a de-centralised ledger, but with the difference that it does not use blockchain to maintain that ledger instead it uses a directed acyclic graph, which the developers call the Tangle. The thing to focus on, in my opinion, is the de-centralised nature of the currency, by using a distributed ledger the integrity and the availability of the data is increased and thus risk is reduced. How can I make such a statement? Because, for example, IBM have developed their own de-centralised blockchain based solution for loan guarantees which has been adopted by Westpac bank in Australia for and Microsoft is working with Bank Hapoalim in Israel on a similar venture. Both ventures cite increased security, trust and efficiency as critical success factors.

Why invest in IOTA?

As you can see above Microsoft believe in the distributed ledger concept, and it would appear that they are hedging their bets as they are not only working on their own solution but are part of a new partnership between over 20 companies and the IOTA Foundation to provide what they are calling The Data Marketplace for the Internet of Things (IoT). This new partnership, which not only includes Microsoft but also heavyweights such as Fujitsu, Deutsche Telekom, Bosch, Accenture, and PwC is running a demo until January 2017, and one can be fairly confident, in my opinion, that this convergence of big data and distributed ledger technologies will influence our lives in quite short order.

How to Invest in IOTA

Now this is where it gets tricky, at the time of writing to use the likes of Bitfinex, CoinSpot and Binance by depositing fiat money requires verification, for money laundering purposes, of your identity which requires you to send WAY too much personal data to these companies, such as passport pages, both sides of driving license cards, bank statements and the like. So the way I found to purchase my IOTA without having to give up my identity was to use Coinify, create an account to buy Bitcoin, to create an account with Bitfinex which I transferred the Bitcoins into from Coinify and then purchase my IOTA’s with these Bitcoins – sale will be the reverse but when realising your profit don’t forget the transaction fees along the way.

Update 27th December 2017 – ALL the cryto-currency trading sites are now requiring FULL verification of people before they will allow you to trade, so you may well be able to set up a personal wallet and find a way to buy Bitcoins but to trade on Bitfinex, eToro or the like you will need to verify your identity, and that is a risk calculation you are going to have to make because these sites are prime targets for criminals to harvest data from, so you really do increase the likelihood that you end up being cloned or similar.