IOTA is one of the most innovative cryptocurrencies available on the market. It offers fast and feeless machine-to-machine payments, which is a crucial addition to the IoT progression. IOTA is a coin just like Bitcoin but it has one major difference. IOTA is the cryptocurrency that doesn’t use a blockchain. That’s right! Instead, IOTA uses its own form of Distributed Ledger Technology called The Tangle! Below, we are going to explain what IOTA is and how to get an IOTA wallet.
What is IOTA?
IOTA is often considered as another cryptocurrency, but in reality, it’s much more than that. It’s true – it can be traded on exchanges, and it has its own token, but it goes beyond the cryptocurrency scope. IOTA is an open-source, decentralized network, engineered specifically for Internet of Things. The backbone of the IOTA network is Tangle which works similarly to blockchain technology, but without the blocks. However, all things aside, IOTA is different than Bitcoin, the most famous cryptocurrency.
This new feature allows IOTA to perform offline transactions at a zero cost and with a potential of indefinite scalability. Meaning, the network can keep on growing and in few years we won’t face the same issue as with Bitcoin. Machine-to-machine (M2M) economy is one of the least developed aspects of IoT – micro transactions come with high fees, flexibility, and blockchain scalability problems. Tangle, on the other hand, doesn’t work with blocks that have to be verified by miners. In the Tangle network, both users and validators are the same.
IOTA has also been pre-mined with the quantity of 2779530283277761 and no more new IOTAs will be created. Currently, IOTA is placed on the 9th position at CoinMarketCap with the value fluctuating between $0.20-$1.00.
How to get an IOTA Wallet?
When you purchase cryptocurrencies from a centralized exchange (i.e. Binance, Bittrex, etc.), you are putting your trust in someone else — the centralized exchange. This means that when you deposit funds, you are trusting that the exchange will protect them. The biggest risk of trusting a company that uses centralized servers is that if they get hacked, then the entire database is at risk. Unfortunately, since Bitcoin was created in 2009, there have been lots and lots of hacks. In 2016, the major cryptocurrency exchange Bitfinex had its servers hacked, which allowed the criminals to steal more than 120,000 BTC. Back then, that amounted to $72 million.
IOTA is a digital currency and also a system that draws attention to itself with Tangle technology and attracts attention as part of digitization. If you would like to invest in IOTA, you need a wallet to store the coins. While the wallet has to differentiate between offline and online variants, there are also alternatives for investment without a digital wallet. So before investing money in buying coins, investors should get an overview of the different variants of the digital wallet and decide which solutions are suitable for them. It is also advisable to find out more about CFD trading with IOTA.
Types of Wallets
It is important to remember that IOTA is still a very new project. This means that at the moment, they don’t actually have a wallet to suit every type. However, there are lots of new wallets in development, so there is a good chance that you won’t have to wait too long before you get the wallet you want. We suggest that you check this article about Bitcoin to learn more about the different types of wallets. In the meantime, we will explain the different types of IOTA wallets.
A web wallet is the least secure wallet on the market and it simply means you can only access your coins through an internet browser. In fact, in the example I gave earlier where centralized exchanges were hacked, that is an example of a web wallet.
Although web wallets are the most at risk, they are also the most convenient. This means that if you need to quickly send someone some funds, it is best to use a web wallet. However, just remember that you should only ever keep small amounts of IOTA coins in a web wallet, just in case something bad happens.
This particular option is slightly more secure than a mobile wallet, however, it is slightly less convenient. Essentially, you download the wallet onto your computer or laptop device and then store your coins offline. The only time that the wallet needs to make a connection to the internet is when you want to actually send funds to somebody. When you use a reputable desktop wallet, your private keys are not held by any third party servers, meaning that only you have access to them. At the same time, this also means that if you misplace them, your coins will be gone forever!
In a similar way to a mobile wallet, your coins are at risk in a number of ways. For example, every time you connect to the internet, your wallet is vulnerable, especially if a hacker is able to infect your laptop with a virus or keylogger. Also, if you forget to back up your wallet and your device breaks, you could lose your IOTA coins. Never let anyone use your laptop without you being present and don’t leave it unattended with a repair shop!
As the name suggests, a mobile wallet is when you hold your coins on your mobile device. There are some advantages to doing this, however, there are also some disadvantages too. Firstly, sending and receiving funds is very convenient. Not only do you have instant access to your coins, but you can also use the features of QR scanning. This is like a barcode that your phone scans, which can then automatically convert the barcode to a unique wallet address.
For example, in places like Japan, where there are now more than 200,000 real-world stores that accept cryptocurrency payments, you can simply scan your phone at the checkout and the funds are sent to the vendor automatically! Never forget, if somebody is able to steal your phone, they might be able to access your coins before you get a chance to restore them on another device. Furthermore, mobile devices are not 100% secure from malware or viruses.
In one sentence, a cryptocurrency hardware wallet is as close to a real-world safe as you are going to get for your IOTA coins! Basically, your coins are held offline in a physical hardware device, meaning that it is only ever connected to a server when you plug it in.
To authenticate a transfer of funds, you would need to enter the pin code onto the hardware wallet. Even if you had your wallet stolen, the hackers wouldn’t be able to access your coins. Instead, you could recover them by using your password recovery phrase! Unlike the other wallet types I have mentioned, you will actually need to pay for a hardware wallet, but if you are looking to hold a large number of coins, it is well worth the investment.
The Best IOTA Wallets
It is both a mobile and desktop-friendly wallet, which is very user-friendly, with all the upgraded technologies. Tasks are automated, all you need is to enter the correct address and amount, Trinity takes care of the rest. Trinity is a well-secured wallet, which protects you in every step. You can also make a backup of the wallet. Trinity is available on both android and iOS versions. For desktop, it supports Windows, Mac, and Linux, and is one of the best IOTA wallets in the world. They might add some features including multiple languages, primary or expect mode, and the ability to print an IOTA paper wallet.
Ledger Nano S IOTA
The Ledger is a hardware wallet, which is as close to a safe as you will get. This will be the most secure way to store your IOTA coins. Even if you have your hardware wallet stolen, you can still regain access to your funds. The Ledger Nano S hardware wallet will allow users to protect their private keys. The Ledger hardware wallets integrate with the IOTA Trinity and Romeo Wallets, and isolate user’s seeds (the key for their account) from their computer or smartphone, providing another layer of security from hackers. Users will be able to validate transactions on their Ledger hardware wallets as part of the security protocol.