Why I sold my IOTA position after looking deeper into the investment case
I first heard about IOTA and the tangle in late November last year and loved the idea immediately:
- It is fully scalable and becomes faster the more people use it.
- It does not come with any transaction costs as the sender of every transaction also takes over the role of the miner as he has to validate two other transactions.
- In the future it is supposed to be possible to also build smart contracts based on IOTA.
Microsoft, Daimler, BMW, Bosch, Deutsche Telecom, Accenture or PWC all showed interest it seemed - although the interest was not nearly as intense as a press release of the IOTA foundation made people believe.
So at least on paper IOTA could be the future of the blockchain technology (though itself is not a blockchain) and yes it could potentially disrupt the crypto currency space a lot. I therefor bought some IOTA (which is a troublesome process) - unfortunately after it had more than tripled within a few days.
Then I looked deeper into the investment idea and at second glance the picture was not so bright anymore:
Part of the excitement about IOTA comes from the fact that it does not require any transaction costs. This should be very attractive for ICOs as it would allow developers of their own coin to be transferrable without transaction costs and it would remove the need to always keep some other crypto currency in your wallet to pay for transaction - which is not really cool for a new currency....
But if that is the case, what do you need IOTA for then? What would be the difference between newly invented crypto currencies on the IOTA tangle and IOTA itself? Both would run on the same technology and would have probably similar features?
And this is the reason why I believe that the IOTA coins might become a victim of their own technological success. Do you really believe that the ride hailing services of the future will be paid in IOTA? No, most likely they will be paid by a native coin of the company that runs the service, (call it the UBER...) which will be pegged to the USD or the EUR.
Will sensor data be paid in IOTA? Why should it? Big industrial companies would most likely prefer something pegged to a fiat currency - and they could easily create this based on IOTA.
Once thousands and millions of smart devices from the IoT world would enter the IOTA space, the network would most likely get better and better and faster and faster. But the IOTA coins, which have been the first smart contract built on the technology will not be necessary anymore for the stability of the network.
I have thus sold my IOTA - and prefer steem.
Am I missing anything? Do you see it differently? Please let me know.
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Interesting thought! thank you for sharing your opinion
Thank you for your well-thought out reasoning. I never thought about it like you have. It does make me question my investments into IOTA. Would there be anything that would get you back into investing IOTA?
I think I would reconsider this once the tangle works smoothly and smart contracts become available. An the price would need to be much lower for me to invest. Right now, I find steem 10x more attractive.
I don't think it will get much lower. I have a felling it'll be at $6.00 before the end of January.
Please check out my article to understand that IOTA is bound to be a winner.
https://steemit.com/iota/@migxxl/understanding-iota-not-another-bitcoin
I don't think that you fully comprehend IOTA. I think it's actually a really good crypto and you should ready my blog on why:
https://steemit.com/iota/@migxxl/understanding-iota-not-another-bitcoin
Thank you for this comment, I will do this.
Iota is a brand new and novel micro-transaction cryptotoken optimized for the Internet-of-Things (IoT). Unlike the complex and heavy blockchains of Bitcoin and the like, which were designed with other uses in mind, Iota is created to be as lightweight as possible, hence the name "Iota" with emphasis on the ‘IoT’ part.
The number of connected devices that will permeate our modern landscape in the coming decade is estimated to be 50 billion(!) Each of these are designed to make the world a better and more seamless place for us. Tied to this fantastic promise are of course a ton of obstacles to be overcome, of which one major one is micro-transactions. These connected IoT devices must be able to automatically pay miniscule amounts to one another in a frictionless manner without having to compromise on product design by introducing additional hardware. This is why Iota was conceived.
While it was developed as a solution to scalability issues faced in IoT, the underlying protocol is agnostic and can be applied in any other use-cases that utilize micro-transactions.
In order to achieve these audacious goals Iota’s design diverged radically from blockchain cryptocurrencies. It still retains the core principle ideas of the distributed consensus blockchain, but in order to be able to scale to the size of the coming Internet-of-Things ecosystem with tens of billions of devices that are connected to each other, it needed to be very lightweight and efficient. This problem is solved by Iota’s core innovation: the tangle.
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