How to Buy IOTA: Solve your Wallet Issues for this Hot Token
Buying and holding the IOTA or MIOTA token may be confusing. Learn how to avoid losses or locked accounts.
IOTA is a hot token that managed to displace Litecoin from its position in the Top 10 tokens of CoinMarketCap. With a huge circulating supply, IOTA succeeded in raising its market capitalization to join the market leaders. And with a robust price growth, IOTA may start attracting significant investor interest.
For more information on the IOTA project, go back to our guide on What is IOTA.
IOTA is one of those tokens for which users would need a separate wallet and some work to hold the token safely. Holding tokens on an exchange wallet is risky and may lead to being locked out of your funds. For IOTA, there is an open-source desktop wallet, based on GitHub.
The biggest problem with the IOTA wallet is that it would require some manual action.
The wallet generates an 81-character seed which you need to save or write down. For new users, older seed insecurities are mostly resolved. Currently, the Windows option to generate a seed has been disabled, as it was deemed insecure and the seed could be easily discovered by hackers. Currently, online seed generation tools are used instead.
This is how a valid seed looks, as the system uses your mouse movements to randomize the string.
Then, every address generated by the wallet needs to be "connected to the tangle". You manually add the address to the network to make it active.
The wallets for IOTA offer the option to run a full node or a light node. Recommendations vary, but light node is used for simplicity. Running a full node requires manually selecting other nodes, up to 7 in number, and requires that Java is installed.
A light wallet will ask the user to connect to a server. Be aware that your IP address and selected server always go in a pair. If you change your IP address, you need to generate addresses to connect to the tangle again, until the whole balance history is received.
To buy IOTA, your route goes through an online exchange. For such a hot token, IOTA has a relatively small selection of markets. Most of the trading happens on BitFinex, as the most active pair is against the US dollar. This speaks of the possibility of direct investment from buyers that may use IOTA to enter directly into the cryptocoin community, without owning other tokens.
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Which is highly unfortunate, because BitFinex may be a closed avenue for US buyers to get on board with IOTA. Currently, BitFinex is withdrawing from the US market, no longer accepting new verifications and phasing out payout in the next 90 days. The restriction is mostly related to trading ICO tokens, as the Securities and Exchange Commission has moved in to try and regulate the ICO market. The SEC wants to further regulate token sellers, as the regulator stated that ICO tokens may be considered securities.
BitFinex had another recent glitch related to IOTA, when it suspended deposits and withdrawals at the beginning of August.
Lost Transactions of IOTA
As we mentioned above, your IOTA balance may not display immediately upon change of server and IP address.
Most lost transactions are due to user mistakes. Whenever you request to receive IOTA, do not forget to attach the new address to the tangle. The wallet will display a message when it attaches.
Now your wallet is ready to receive IOTA as you send it in from another wallet. The next step is to exchange Bitcoin (BTC) for IOTA on one of the available exchanges.
Selling IOTA is the reverse process. You need to send funds from the wallet onto an exchange and switch to Bitcoin to cash out.
When sending IOTA from your wallet, make sure you select the right denomination. The IOTA is the basic unit. What is traded today is the MIOTA, or one million IOTA.
Do not accidentally send a much smaller- or a much larger sum than you intended. The price for MIOTA was around $0.89 as of August 2017.
The Verdict on IOTA
This token is more suited to intermediate or advanced cryptocurrency enthusiasts. It is much harder to handle compared to other coins, and the trading positions are illiquid. The market price, however, has been showing rapid fluctuations and a lot of hype to inflate it back to $1 levels.