IOTA is an unusual cryptocurrency that caught the attention of the investment community as it entered the crypto market in 2015. Launched by its four creators, IOTA offers an interesting set of features for users as well as cheap investment opportunities. In 2021 many investors are examining if IOTA is the right investment to make in the second half of this year.
IOTA bears some similarities to other crypto coins on the market and is not completely alien to those already aware of the cryptocurrency scene. As many other crypto coins do, IOTA works by publishing its data in an open-source distributed ledger. It stores the data print of the transactions that are made on its system on this ledger by using directed acyclic graph technology.
This technology differs from that used by the top crypto coins, however, there are a few core reasons behind it. The first is the greater potential for long term scalability. Secondly, because IOTA does not use the coin mining process that cryptocurrencies like Bitcoin prefer, there are no fees.
This no-fee benefit then means that microtransactions can be made on the system without users worrying about the build-up of costs. On fee-paying systems users are pushed to make fewer transactions, choosing ones that are large and worth the fees involved. This has interested investors as it is a huge benefit to using IOTA as a currency transfer system as well as a cryptocurrency.
Without miners, the IOTA system relies on a trustworthy collection of node operators to validate the transactions being placed on the ledger system. To take the pressure off of these node operators the IOTA Foundation which oversees the system also has a coordinator node that they run.
Because of this central figure of the coordinator node, who oversees the top level of verification the IOTA system is still considered to be centralized. This is the main feature that sets it apart from most major cryptocurrencies which are part of the decentralized finance (Defi) system.
These operational differences have attracted investors looking to spread their portfolios. By including a wider range of crypto coins and involving themselves in new centralized systems as well as the Defi market, investors are preparing for more possible market outcomes. This has potential investors looking into the reasons that IOTA might be the right cryptocurrency to invest in during 2021.
IOTA and MIOTA
IOTA coins are capped at a total supply of 2.79B, which ensures that the value rises as coins are lost during circulation. The crypto coins are stored in an IOTA wallet, with a password that is set up as an 81 digit sequence called a seed. If a user forgets or loses the password and loses access to their crypto coins then the overall price goes up as the coins are in shorter supply. Which then benefits other users and investors. These IOTA wallets keep the currency offline when not in use and are necessary for completing transactions on the IOTA system, similar to all other major crypto coins.
IOTA is the name of the system but is also the coin symbol for one unit of the cryptocurrency. However, because the crypto coin is often traded on digital platforms in units of 1 million IOTA these are called megaIOTA and trade under MIOTA. Both IOTA and MIOTA can be used to buy and sell the same IOTA cryptocurrency but in smaller or larger quantities.
When the idea for IOTA was taking shape its four founders David Sønstebø, Dominik Schiener, Sergey Ivancheglo, and Serguei Popov raised money by holding an initial token sale. In 2015 these IOTA coins were purchased by the public using other cryptocurrencies that were already in circulation raising the equivalent of 1300 Bitcoin which was half a million US dollars given Bitcoin’s price at the time.
The money was distributed evenly to all the initial investors and the IOTA network was established in 2016. These initial investors in IOTA decided to put 5% of the total token supply of the IOTA cryptocurrency to one side in 2017. This money was then used to launch the community which evolved into the IOTA Foundation.
The IOTA Foundation was based in Berlin and worked to oversee the direction and the technological evolution of the IOTA institution. They maintained company standards and joined the board of the International Association of Trusted Blockchain Applications (INATBA).
Co-founder Sergey Ivancheglo left the IOTA Foundation board of directors in 2019 after arguments with David Sønstebø who also left the following year. By the end of 2020, only two of the founding members remained with IOTA and the company stabilised.
IOTA 1.5 Upgrade
One of the main differences between IOTA and other popular cryptocurrencies is that IOTA is centralized. Because the IOTA foundation puts a central coordinator in charge of the main verification node, IOTA is separate from the Defi sector. The coordinator makes valueless transactions on the blockchain in order to validate the transactions being added to the IOTA ledger.
Many strong supporters of the Defi sector feel that this is a mark against IOTA. They believe that the IOTA cryptocurrency should join the majority of popular coins in the Defi sector. The cryptocurrency market and the Defi sector are very closely interlinked and without the support of the Defi sector, IOTA progress could be impacted.
To fix this problem the Chrysalis update was formed and then launched in April 2021. This update also goes by the name IOTA 1.5 and has removed the problems created by coding that was not beneficial to IOTA long term.
IOTA has also been testing a version of the cryptocurrency which leaves behind the central coordinator role and allows the coin to become decentralized. The completion of this update will be excellent news for investors as it will likely lead to a boost in share price.
This second stage of the update is called Coordicide, IOTA 2.0 and signals a new decentralized era for IOTA going forward. The complete version of IOTA 2.0 should be fully launched by the end of 2021, making now a positive time to invest in IOTA.
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The IOTA Tangle
The transaction settlement part of the IOTA mechanism which also includes the data integrity layer is described as a Tangle. This is due to the way that the wider transactions are linked together and stored by the network of distributed node operators.
This network is known as the tangle and the network users all have some responsibility for verifying the transactions made. Every user has to verify two transactions to complete one transaction themselves, creating a communal system that is similar to the decentralized financial model.
The main benefit of this is that there are no transaction fees needed and this means that micropayments are viable on the system. This increases the scalability of the IOTA system moving forward. As well as currency transactions data can also be sent using IOTA and stored on the ledger.
IOTA Market Adoption
The technology that IOTA has developed is being used more and more by large industries. The automotive industry and the Internet of Things industry are both adopting these technologies widely. Some of the larger players involved are Bosch, Jaguar Land Rover and STMicroelectronics.
IOTA is also expanding its usages into the energy sector, the waste management sector and the digital ID industry. The search engine, Xain, already uses IOTA technology in its verification process.
Increased market adoption creates broader scope for the IOTA technology and use of the IOTA native coin which is excellent news for investors. It should also speed up the process of being able to buy goods and services using IOTA coins in the future.
Trading MIOTA to USD
IOTA has had a volatile history of highs and lows which have been more dramatic than the average cryptocurrency experiences in the market. IOTA experienced some late resistance which led to a sideways trading pattern that dominated most of 2019 and 2020. During this period IOTA traded around the $0.25 market for a prolonged stretch of time.
The post-covid cryptocurrency surge of 2021 gave a new lease of life to the IOTA trading pattern. After a very unimpressive two-year low the price began to surge upwards. The crypto sector had new interest and investment after the covid-stock market crash shifted faith from the stock market to the crypto and Defi sectors.
The surge took the IOTA price past its previous high which was just below $2. By the second peak in April 2021, IOTA had achieved a new all-time high of $5.25. Breaking past the $5 mark was a huge win for the IOTA crypto coin. This cheap cryptocurrency has reached a new high and provides excellent returns for its investors who bought during the two-year low period. However, the corrections and declines across the crypto sector in the summer of 2021 have been extremely harsh.
The initial correction down to $1.63 was a disappointment after the previous peak, however, after regaining their place above the $2 mark, the bear market hit. The bearish trading cycles across the crypto market have seen prices plummet. Although the IOTA price keeps struggling against the dip it has suffered staggering drops over June and July 2021. The price is now down to $0.80, however, the signs are positive for this price to hold, rather than drop further.
Will IOTA Rebound from the Last Correction?
The correction down to $1.63 from the all-time high of $5.25 was a steep one, however, this volatile MIOTA cryptocurrency shows signs of bouncing back. IOTA is prone to steep movements in both directions which would make another surge, larger than the last, a viable possibility.
The second drop-down to $0.90, after some of the initial correction was recovered, gave investors a shock as most had not expected IOTA to go below the $1 mark. However, as the values have stabilised at around $0.80, further drops are unlikely. This makes buying in at the low point and waiting for the next surge a possible strategy for investment going forward in 2021.
The drop in coin price during the correction is likely to be recovered. However, the return to the $5 position may be a slow one over the course of 2022 if the peaks are not as high as the trading cycle suggests they could be.
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IOTA in 2021 and the Future
Like the rest of the cryptocurrency market, the remainder of 2021 is looking uninspired. However, IOTA is a very cheap cryptocurrency offering a particularly low entry point into the cryptomarket, with great scalability potential.
IOTA is also likely to show some recovery over the next three to four months, as well as providing opportunities for profitable swing trading. These volatile trading cycles allow for this type of short term investment, however, long term growth is likely to be slow during the remainder of 2021. Despite this, IOTA is up 179% this year to date, even with the bear market in place.
However, into 2022 things are looking good for IOTA, particularly given their move into the decentralized financial market which is taking place currently. The IOTA 2.0 decentralized system went live on the 2nd of June 2021, spelling a new era for IOTA:
‘Core modules implemented. Final checks complete. Network ready for launch.
3.. 2.. 1.. Liftoff Rocket
The IOTA 2.0 DevNet (Nectar) is live!
Experience the future of a fully decentralized, scalable, and feeless #IOTA network today. https://blog.iota.org/iotav2devnet/’
@iota, Official Twitter Account of the IOTA Foundation
Now that the IOTA system is being shifted into the Defi sector, the system should expand and integrate into the world of decentralized finance in ways that boost both scalability and coin price going forward.
Read Also: Will IOTA Make Me Rich in 10 Years?
IOTA Trading Forecast for 2021
The trading forecast for IOTA in 2021 is a slow but steady improvement over the remainder of the year. The bear market is still making surges difficult market-wide. However, as IOTA continues to become decentralized, the coin price would strengthen.
There are unlikely to be considerable gains until the bearish trading pattern shifts and the bull market can resume. However, the recovery period for IOTA should be shortened by its recent updates and developments, some of which the IOTA Foundations outlines days ago:
‘#IOTAQuicktakes: A recap of the past days:
We extended our partnership with @TradeMarkEastA
@Blickch wrote about how #IOTA is a #green alternative to bitcoin.
@IOTAXTeams participated as Team Identitree in a Hackathon at @sovereignnature
@iota, Official Twitter Account of the IOTA Foundation
These continued positive updates are supporting upward trends for IOTA in the coming months, despite the difficult market currently. This lines up with the experts’ predictions that highs could be as much as $15 for IOTA price by the end of 2021. However, a modest increase, taking the price to $1.50 is also expressed as a low estimate.
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Who is behind IOTA?
IOTA was founded by David Sønstebø, Dominik Schiener, Sergey Ivancheglo, and Serguei Popov in 2015. These four founders became the heads of the IOTA Foundation until Sønstebø and Ivancheglo left the company between 2019 and 2020.
The IOTA Foundation oversees the cryptocurrency going forward and works to improve the technical efficiency of the system.
What is IOTA?
IOTA is a form of open-source blockchain technology that uses a ledger to complete transactions of currency and store data. The native coin is IOTA but the currency is often traded in megaIOTA which is 1M IOTA, known as MIOTA.
How does IOTA compare to the market?
IOTA and MIOTA are jointly ranked 44th in terms of market capitalization with a market cap of $2.27B at the time of writing. The ranking is lower, partly due to the very recent entry into the Defi sector, compared to other coins which have been decentralised from their launch date.
However, they are a resilient crypto player with some impressive industry adoption under their belt already.
Should I invest in IOTA in 2021?
This is an excellent time to buy IOTA in terms of getting a low coin price and a cheap entry point into the market. The MIOTA coin price is likely to go up from this point due to the company expansion and the continued push towards decentralization.
Investors buying during the low price period are likely to make higher percentage returns during the next bull run.
Is IOTA still going to go up?
IOTA may look as though it holds a weak position but the market as a whole is down and so the prices are likely to rise considerably during the next bullish trading cycle. IOTA is aiming to return to the $5 mark during 2022 and should rise further during the following peak.
In 2021 the experts are predicting that the trajectory will take the IOTA coin price to between $1.10 and $1.50 over the next three months of 2021.
What will MIOTA prices rise to in 2021?
Although experts warn that the low estimates could see MIOTA trading sideways for the next few years, the positive estimates put the value of IOTA at $15 as the predicted high point for 2022. This would provide staggering returns for those buying at the current low coin price. This would give the 2021 price rise a ballpark figure of $10, exceeding the current all-time high.