How to trade IOTA with Plus500

IOTA is a revolutionary new digital currency, specifically designed for the Internet Of Things. The currency is relatively new, and it still requires further development. In this article we look at how you can invest in IOTA and we also discuss the innovative technology behind this cryptocurrency.

Investing in IOTA

Like other cryptocurrencies, IOTA is also a very volatile currency. You can use this volatility to trade with an online broker. It is possible to take advantage of price drops and price increases in the IOTA cryptocurrency by buying and selling at the right moments. Currently, there are only a limited number of brokers that allow traders to invest in IOTA.

One of the best brokers to invest in IOTA is Plus500. Plus500 is a professional, listed broker where it is possible to trade the most popular cryptocurrencies, such as Ripple, Ethereum, Dash, Litecoin and Bitcoin. Using Plus500 to trade or invest in IOTA gives you a couple of advantages:

  • You do not pay commissions on buying IOTA
  • You can go short to benefit from falling prices
  • It is possible to trade with demo account

Click here to open a free account with Plus500 >>

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But what exactly is IOTA?

The IOTA is a new cryptocurrency specifically developed for the Internet of Things (IOT). The IOT stands for connections that exist between all kinds of electronic devices. Consider, for example, the refrigerator that supplements your supply of milk or the central heating that automatically goes up a few degrees whenever you enter a room. The idea of the Internet of Things is that everything is connected to each other.

IOTA offers a decentralized technology that can be used to connect all this information. Unlike bitcoin, IOTA does not use the blockchain technology. Instead, IOTA uses the new protocol Tangle. But what does this new protocol mean?

What are the benefits of IOTA?

The innovative technology behind IOTA has the multiple functions. As with the normal blockchain, the technology ensures that information that is exchanged cannot be manipulated. This makes financial transactions safer. Internet of Things devices are particularly vulnerable to hackers, making it even more important to have a safe technology behind it, that prevents your fridge and microwave from being hacked.

However, there are even more advantages that IOTA offers thanks to the Tangle protocol:

  • Costs: transaction costs are greatly reduced because they are decentralized.
  • Scalability: the system is easy to expand
  • Security: the system cannot be hacked
  • Availability: the system is always up and running

What makes IOTA different from bitcoin?

The big difference with the bitcoin is the fact that IOTA does not require mining. Normally, the capacity of the blockchain is limited because only a limited number of transactions can be performed per mined block. The Tangle protocol on the other hand does not have any mining at all, since it uses Directed Acyclic Graph, which is a new cryptographic decentralized network that can be scaled indefinitely.

This all sounds complicated and although the technique behind it is very interesting, you are of course curious about what it exactly you can do with it. Well, the IOTA requires little processing power to carry out transactions, which means that this can take place on all modern equipment. All devices with which IOTA payments are made are in fact connected to each other, and for each executed payment the device has to confirm two other transactions. As a result, there is always sufficient capacity available for executing the transactions.

Be rational when investing in IOTA

The technique behind IOTA is certainly promising: especially the unlimited capacity within the new protocol is interesting. However, it is important to take into account several things when you invest in IOTA. First of all, it is very important to do sufficient research before buying IOTA.

The price of IOTA is largely determined by the market sentiment. Cryptocurrencies are popular in the media and a positive or negative news item can strongly influence the price. It is important to be aware of this when you purchase IOTA, or any other cryptocurrency. For example, when positive news about the underlying protocol of IOTA is released, it may be a good time to buy IOTA.

Secondly, you should make rational investment decisions. Do not invest more money than you can afford to lose. It is also wise to use a stop loss when investing in IOTA. This prevents you from a major loss due to sudden price movements. Also remember that even though the technology behind the IOTA is promising, it is still far from certain that this will be THE currency that will drive the Internet of Things. I would advise to buy a relatively small amount of IOTA so you have some cash left to diversify in other cryptocurrencies!

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