How to Get Started in IOTA Trading
IOTA is a new, groundbreaking open-source distributed ledger that does not use blockchain. IOTA’s innovative new quantum-proof protocol, known as the Tangle, has unique new features such as infinite scalability, zero fees, fast transactions, secure transfer of data, and much more.
Below, we discuss the basic things to know about IOTA, including how to find the best IOTA trading platform, the best cryptocurrency exchange to buy IOTA coin, as well as how to best trade IOTA.
What is IOTA coin?
We all live in an interconnected world. Our interactions with technology have become continuous and widespread, and these interactions include the process of internetworking our physical devices, such as buildings, cars, houses, software, and electronic devices. These objects are, thanks to innovative technology, allowed to collect and exchange data.
IOTA’s initial focus is on serving as the backbone of the Internet-of-Things (IoT). The Internet of Things, also known as IoT, is at the forefront of the fourth industrial revolution. IoT promotes the idea that even non-network devices can and should be connected to the internet.
Traditional Blockchains, like Bitcoin, rely on miners. Computing-power-farmers sit in China and boost transactions through a synchronised peer-to-peer network and mine parts of the currencies with this processor power. This is why we pay a small transaction fee when we send Bitcoin to someone over the network. This transaction fee is part of the miners’ rewards.
IOTA was developed to resolve the problems of transaction costs, scalability, and offline transaction. IOTA is an open source, non-profit organisation focused on building an IoT solution inspired by, but not based on, blockchain technology.
The IOTA Foundation developed IOTA as a “gemeinnützige Stiftung” (“non-profit Foundation”) based in Germany. The Foundation’s goal was to provide an IoT solution, including Blockchain’s incentive mechanisms and security without the negatives of fees and transaction scaling.
The first (and maybe most important) aspect of the Iota coin is its lack of transaction fees.
IOTA has no transaction fees
Replacing the global blockchain is a DAG (Directed Acyclic Graph) called Tangle, which enables various features like zero-cost transactions, infinite scalability, and offline transactions.
This lack of transaction fees enables new, data-driven business models. Data is hashed and signed by an IOTA node. The immutable hash values and signatures reassure the payer that he can rely on the authenticity and integrity of the data whenever he makes a nano-payment.
To date, major public blockchains like Bitcoin and Ethereum have not successfully proven that they can deliver micropayments at volume. This lack of success is due to the way in which they reimburse the parties that process and resolve payments.
IOTA Tangle reaches far beyond blockchain’s one-dimensional concepts and instead uses completely new architecture. IOTA is not just another blockchain idea; it is a well-engineered, new technology concept that has to potential to be a key enabler of the machine economy.
IOTA has scalability
Ethereum has emphasised the lack of scalability of its competitor, Bitcoin, but Bancor ICO showed that Ethereum also scales poorly. Today’s blockchain technologies have clear limitations regarding their scalability, computing resource requirements, and transaction fees.
In IOTA, scalability, and adaptation to high-throughput environments where devices make thousands of transactions are the norm. IOTA is the first distributed ledger without permission requirements to achieve scalability, making Machine-to-Machine payments for IoT possible.
IOTA allows for offline transactions
Blockchain has the layout of a global state, where each network participant must be in full synchronicity to make a transaction. The IOTA Tangle’s design is less rigorous and enables the network to build clusters and make transactions in an offline environment.
IOTA nodes can easily operate without being connected to the main tangle. If these nodes later wish to connect to the network (when, for example, internet connection is available) they can do so with ease.
Trade IOTA Online Using CFD Services
If you are interested in trading because of the opportunity to profit from the incredible volatility of cryptocurrency, your best option is to use an online trading platform that allows CFD services. Currently, there are very few CFD platforms that allow you to trade IOTA, so to see available options refer to our recommendations above.
CFD Brokers are a great option if you want to trade IOTA coin with the option to accept multiple forms of payment. Furthermore, if you want to buy IOTA with Paypal, you can. These forums also accept major credit cards and wire transfers in exchange for IOTA. Also, if you choose to trade IOTA through a CFD or forex platform, you will pay the lowest commissions possible in comparison to other alternatives. CFD companies use an exchange rate that is an aggregate of different Crypto exchanges.
Trading IOTA – Getting Started with CFDs (Contracts For Differences)
CFD brokers allow you to trade IOTA without owning actual IOTA coin. IOTA CFDs were generated to give traders exposure to Bitcoin without the need for ownership.
Contracts For Differences, also known as “CFDs,” represent a contract between trader and exchange. CFDs declare that the difference between the price on entry and the price on exit will be a trader’s profit or loss. Basically, CFDs are an agreement held between two parties that simulate an actual asset.
CFDs have a lot of flexibility, meaning that they let traders go long (betting on a price increase) or short (betting on a decrease). When traders use CFDs for trading IOTA, they can enter trades any day, anytime, and likewise close them whenever they want.
Another advantage are the low fees when compared to other trading methods. Although, these fees are slightly above those of exchanges like Kraken and Bitstamp, which help with the direct buying and selling of IOTA.
How to make money by trading IOTA
There are several ways to make money trading IOTA. Many involve trading IOTA against the US dollar. The first method is to find a top IOTA trading broker and to invest in the same way that you would with a physical currency – by buying low and selling high. Since IOTA is volatile, you should be able to identify the dip with studying and market research.
Buying vs. trading IOTA – What is the difference between a crypto exchange and a broker for IOTA trading?
One way to invest is to buy IOTA on a cryptocurrency exchange, while another popular method is through an online trading broker. There are excellent opportunities for investors using either approach, and there are positives and negatives to both. On a cryptocurrency exchange, you are purchasing an actual IOTA coin, and through a trading broker, you trade IOTA CFDs. Many will argue that investing in IOTA CFDs are better due to its simplicity and regulation. Forex and CFD brokers are highly regulated and operate with strict professionalism, with all funds stored in segregated accounts.
Unfortunately, cryptocurrency exchanges are entirely unregulated. Because cryptocurrency is a very recent – and booming – market, the majority of these exchanges are quite new. One of the essential questions people ask is how to know if a particular platform is safe or at-risk.
Check if the exchange provides data on the coins located in cold storage. Furthermore, you must check whether the exchange has the reserves required to provide its activities with liquidity. You can find this information easily by checking whether an exchange is regulated.
It can be challenging to set up an IOTA wallet at a cryptocurrency exchange, but it’s like that with anything worth doing. With a trading broker, however, you can set up an account in a matter of minutes. Once you deposit currency into your account, you can start trading right away.
Read on to learn how to find the best online broker to trade IOTA and be sure to review the platforms we suggest above, all are fully-registered and come highly recommended. For additional information regarding trading IOTA as a CFD, check out our guide on “The Basics of Cryptocurrency“. It’s important that you remember that leverage works both ways and it will magnify the gains and losses.
How to Find the Best Online Broker for Iota Trading
With the high levels of market competition and large exchange/broker volume, it can be difficult to make a decision. So, before deciding on the right online broker for IOTA trading, keep these things in mind:
Ensure that the broker or exchange you use is regulated by a body such as the Financial Conduct Authority in the UK (known as the UK’s FCA). These regulators develop rules and services to protect the market’s integrity and the safety of its traders and investors. Due to safety concerns, always open your IOTA trading account using a regulated broker.
IOTA trading happens online 24 hours a day, meaning that customer support must be available at all times. You will want to be able to speak with a live support person. Many brokerages have a local office. Make sure to ask pertinent questions to analyse whether the representative is reliable or not. The details of a trustworthy broker should be out in the open, either online or otherwise, for the public to see.
Your ideal online broker for IOTA trading should offer either multiple account options or provide an element of customizability. The broker may even have a separate account for beginners. Look for a broker that offers competitive spreads and simple deposits/withdrawals.
Many people concentrate on just one asset class when selecting a broker. However, you keep in mind there are many other types of investment alternatives offered. These include stocks or shares, Forex, ETFs, other popular cryptocurrencies, CFDs, options, or futures.
Buying and selling IOTA costs money. IOTA brokers usually charge a percentage, but you may choose, instead, to find a broker who charges a flat fee, not a percentage.
Because IOTA is traded in a market where people buy and sell, make sure you consider the amount of liquidity an exchange has. Liquidity is the ability to sell without wrecking the price.
Here at TopBrokers.Trade, we take pride in providing the best possible online trading broker comparison, reviews and ratings. These reviews enable you to select the best trading platform for your needs. We don’t just help you pick a great place to trade, but do everything we can to show you how to get started. For more information on trading and investments, please see our articles and tutorials.