An analytical guide to IOTA in 2021
Where will MIOTA price go in 2021?
What will happen to the IOTA (MIOTA) price in 2021? Crypto investors have always wondered: What drives the MIOTA price?
IOTA is one of the relatively newer cryptocurrencies. IOTA is the brainchild of Sergey Ivancheglo, David Sontesbo, Serguei Popov and Dominik Schiener. Like other notable cryptocurrencies, the foundation of IOTA was laid with the purpose to create a digital payment system, but the hallmark of this system would be its scalability, security, efficiency and lower charges. IOTA also aimed to serve as a channel for efficient data transfer between systems.
The token, cryptocurrency, of IOTA, is called MIOTA.
What are the drivers of IOTA’s price?
The three factors that determine the price of IOTA are:
- IOTA’s network
- The cryptocurrency market
- Increased adoption
Like major coins such as Bitcoin utilise the blockchain technology where transactions are approved with the help of miners, IOTA has its own unique mechanism in place called Directed Acyclic Graph (DAG) also known as Tangle. In the Tangle system, miners are not required to process transactions; instead, a chief coordinator does the job. This system helps eliminate most of the costs that are associated with transactions. It is also the reason why IOTA has one of the lowest transaction charges in the cryptocurrency market.
While blockchain eases back down and requires more assets, the bigger the platform turns into, a DAG does the opposite. The utilisation of the inventive IOTA Tangle innovation brings about higher adaptability and turns out to be quicker and significantly safer the greater action there is on the network, as per the founders.
As more people use the IOTA system, the network becomes more scalable. Source: Bitdegree.
Currently, the status quo prevents data from being accessible, and information is generally restricted to the control of a few rather than the expansive masses. Particularly as of now, when information is getting progressively significant, IOTA presents a solution to this with their Data Marketplace.
The IOTA Marketplace is an illustration of a decentralised information commercial centre that plans to make information accessible to any remunerating party. The information is being gathered and exchanged in real-time by associated devices. Besides, the Data Marketplace makes it conceivable to safely sell and access dynamic data streams. IOTA Data Marketplace clients can purchase or sell MAM or Masked Authentic Messaging. In short, the marketplace can be a solution to modern-day data problems.
As Quantum computing is under development, it has put a lot of things under threat. The cryptography of cryptocurrencies is not hackable, but once quantum computing is developed, it will be able to hack cryptography which is a major issue as organisations are working tirelessly on developing quantum computing. IOTA has proved itself, time and again, to be a futuristic cryptocurrency. The developers have claimed that they have made IOTA quantum resistant. So, whenever Quantum computing is developed, we all will have an option of a cryptocurrency that is resistant to it and, undoubtedly, when that happens the market for IOTA is going to explode as investors flock to it.
What Drives IOTA’s Price?
For any investors, new or expert, the important aspect of making an investment is to figure out the factors which influence the price of the asset. This enables them to predict prices and future trends. But when it comes to cryptocurrencies, determining the factors that drive their prices is the tricky part. Cryptocurrencies are notoriously known for the volatility and unpredictable jumps. The nature of the cryptocurrencies is also quite confusing. In the US, some entities have identified cryptocurrencies as assets, whereas others have identified it as commodities. The unique nature further puts questions in mind in regard to the price determination.
3 Factors That Drive The IOTA Price:
Factor 1: IOTA’s network
A major flaw of blockchain technology is its scalability with growth. The more the network grows the slower and costlier transactions will become. The Tangle system, however, offers a solution to this problem. As the Tangle system only has a central coordinator, the system works by making it mandatory for users to also process other people’s transactions. This unique system means that the more people there are on the network, the faster transactions will become. The Tangle system has what is called infinite scalability. This system is exponentially more efficient than the usual Proof of Work blockchain technology. The incorporation of the Internet of Things in the system makes it appear to be the cryptocurrency of and for the future.
Currently, the Tangle system is not operating at its peak capacity. The technology of Tangle is revolutionary and could, forever, change the cryptocurrency world, but at present, the cryptocurrency world has not really witnessed what Tangle can do. The full potential of Tangle has not been unleashed and investors, throughout the globe, are waiting for the moment when they will get to witness the prowess of Tangle. When that moment arrives, Tangle is going to definitely take off.
Factor 2: The cryptocurrency market
The general market sentiment of the cryptocurrency market has a huge impact on all cryptocurrencies. A favourable market environment encourages investors to invest more, in whichever coin. As we saw in 2017, the market boom helped all cryptocurrencies achieve their all-time highs and to this date majority of cryptocurrencies have not been able to cross their highs established during the boom. Cryptocurrencies are gaining popularity which bodes good things for the market. Positive trends in the market will, indefinitely, impact IOTA positively.
Bitcoin and IOTA correlation. Source: Coinpredictor.
Factor 3: Increased adoption
Increased adoption of IOTA will drive demand for IOTA upwards. The demand plays a detrimental role in IOTA’s prices, like all cryptocurrencies as cryptocurrencies have a hard cap of their supply it is majorly through the demand that prices are adjusted. IOTA’s unique design makes it ideal for a micropayment platform.
As transactions are mined by users who have to be rewarded for their computing powers in the blockchain technology, transactions cost a lot. In fact, Bitcoin has one of the highest transaction costs. In the Tangle system, the absence of miners eliminates the high costs associated with transactions. As users have to process transactions, and it is mandatory for them to do so, the transactions are practically free.
The nominal costs of transactions make IOTA ideal for micropayments. More and more small businesses are shifting online and require a safe and secure mode of digital payments; IOTA provides a solution to their problems. Predictions indicate that IOTA will soon become the platform for micropayments because of the nominal transaction fees and ease of transactions.
Would you consider investing in IOTA (MIOTA)?
The Future Of IOTA
IOTA is backed by a reputable team and has various partnerships established. IOTA has great potential, and innovative technology can be implemented in numerous use case scenarios.
IOTA’s technology is truly futuristic and revolutionary. It is the first cryptocurrency to make use of the Internet of Things technology. IOTA’s aim is to become not just a payment platform but also a data marketplace, and IOTA’s viability as a micropayment platform is phenomenal. The founders also claim that IOTA is resistant to quantum computing.
The risk and reward ratio of IOTA currently seems to be good. IOTA’s current price is $0.3038, which is close to the next resistance level. The market sentiment is bullish, and after breaking out of the resistance levels prices are going to soar.
It is currently the 32nd largest cryptocurrency in the world, and this number is expected to improve greatly in the coming years.
Price Predictions Of IOTA
Investors are of the opinion that IOTA as a long-term investment is more favourable. It is expected that by 2025, IOTA would have crossed it's all-time high and would be stable somewhere above $5.
In the short run, analysts have predicted that IOTA can cross the $1 if the market remains bullish, but towards the end of 2021, prices can take a more bearish turn. Modest predictions state that the price could average at a level of $0.35, which is way above the sell zone, so there is nothing to worry about. However, to be on the safe side, a mid-term position can be opted for.
IOTA long term trend line. Source: Walletinvestor.
Does IOTA Seem Like A Good Investment?
The downside of the unique Tangle system is that IOTA is still relatively new. The system is designed to become more efficient with its growth as it is still new, and it is not as efficient. The transaction time is completely dependent on the users and how fast can they solve the proof of Work puzzle to verify transactions. Transactions can take as long as a few minutes, which is not an attractive thing to users.
The central coordinator of IOTA is, well, central. Hence, the IOTA system is not completely decentralised, and in the cryptocurrency world where people are attracted towards the notion of no central authority and the problems that are associated with centralisation, IOTA has a huge downside. If the central server goes down, due to some reason, it will make the whole network crash, and if it is compromised, then the whole network is compromised.
IOTA has had some technical issues with its chief coordinator, and it has been inoperable for days. This had given rise to many doubts in investors minds about the security and reliability of IOTA. Investors still have to operate with the constant threat of system failure, which is not at all a good thing for IOTA’s future or present.
Although the developers have taken precautions to prevent the manipulation of the network, a user will have to gain 34% power to be able to implement changes to the network. However, for Bitcoin, the power required is a whopping 51%, so when talking in relative terms, it is a lot easier to override the system of IOTA than Bitcoin. Hence, IOTA may not be as secure and safe as was the goal of the founders.
With the Tangle technology, IOTA has uncovered the secret of scalability, and it is deemed to be infinitely scalable. Even though IOTA is currently facing some hurdles, any investor can tell that it has great potential. The use cases of the innovative technology of IOTA are many. The future seems optimistic as forces are in IOTA’s favour, and it is expected that IOTA will soon overcome all its obstacles and realise its true potential.
IOTA Price prediction chart. Source: Digitalcoin
Ready to invest in IOTA (MIOTA)?
Pros and Cons Of Investing In IOTA
Pros of investing in IOTA:
✅ It is the first cryptocurrency to make use of the Internet of Things and incorporate it into its design.
✅ Transactions costs are nominal.
✅ The infrastructure of IOTA is completely original.
✅ IOTA’s network provides a solution to perils of the blockchain technology through Tangle
✅ The Tangle system is infinitely scalable.
✅ IOTA is ideal for micropayments.
✅ IOTA can also process data long with transactions and is underway to become a data marketplace.
✅ It has a revolutionary and futuristic technology.
✅ The IOTA system is aiming to be able to process transactions instantly.
✅ IOTA is also aiming to become quantum resistance.
Cons of investing in IOTA:
❌ Investors and experts alike, are sceptical about IOTA’s security and reliability.
❌ The need for a chief coordinator by the IOTA system poses many problems.
❌ The system is not completely decentralised.
❌ IOTA has had many technical errors that have made the system inoperable for days at length.
❌ Overriding and manipulating the system is relatively easy.
❌ IOTA has been a victim of hacks which proves that the system is not much secure.
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- IOTA was created with the purpose to become a digital payment platform but with increased scalability, security and safety.
- IOTA has incorporated the technology of the internet of things in its design.
- The cryptocurrency is called MIOTA, and IOTA does not just transfer money but also data.
- It is aiming to become a data marketplace.
- Unlike major cryptocurrencies, IOTA has a unique Directed Acyclic graphs mechanism called Tangle.
- The Tangle system eliminates the need for miners and, thus, the costs associated with it.
- IOTA is infinitely scalable, and transactions are practically free, which makes it ideal for micropayments.
- The founders claim that IOTA is resistant to quantum computing.
- IOTA has suffered from security and has had a few hacks.
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