While Bitcoin and Ethereum are incredibly well known, some of the other popular cryptocurrencies, such as IOTA, have more doubts surrounding them, at least for the average person. Buying IOTA is just as simple as buying any other cryptocurrency, as long as you know where to look for it. At the time of writing, IOTA is among the more affordable popular cryptocurrencies, valued at $1.02.
A Refresher on IOTA
Before getting into how to buy IOTA, let’s take some time to refresh your memory on what it is. IOTA is actually the platform, and the IOTA token is MIOTA, but most people just use IOTA to refer to either the platform or the token. Tangle, a new distributed ledger, serves as the basis for IOTA. IOTA itself is a new layer for settling transactions and transferring data with the Internet of Things.
While Bitcoin is based on blockchain technology and has transaction fees, IOTA doesn’t use blockchain technology and has no fees. In fact, the lack of blocks is part of the logic behind IOTA; no need for blocks enhances IOTA’s scaling ability since miners do not need to verify network transactions.
Instead, each transaction on IOTA requires the creator of that transaction to approve two earlier transactions via computational work. Essentially, instead of paying fees with IOTA transactions that would go to the miners who secure the network, you as the transaction creator secure the network.
Because IOTA does not have any transaction fees, nanopayments are possible. These are extremely small transactions that the team at IOTA feels will have use cases in the form of internet-connected devices conducting transactions with other internet-connected devices.
Convert Fiat to Cryptocurrency
Unfortunately, both Bitfinex and Binance only support cryptocurrencies, not fiat currencies. Because of this, you must first take the time to buy a cryptocurrency, preferably either Ethereum or Bitcoin, as those are the trading pairs you are likely to find for IOTA.
Many experts will suggest buying Ethereum instead of Bitcoin for this type of temporary use because the transaction fees are lower and the transactions process more quickly.
To get the initial cryptocurrency, you can use a fiat-to-crypto exchange, a platform like LocalBitcoins or LocalEthereum, sell a product for cryptocurrency, work in exchange for crypto, or visit a Bitcoin or Ethereum ATM. Those who are new to cryptocurrency but want to invest in IOTA will likely want to consider Coinbase for this transaction.
Coinbase is based in the United States, has been around since 2012, and supports a range of payment methods, including bank transfers and credit or debit cards.
Buy IOTA on a Crypto Exchange
The simplest method for buying IOTA is to visit one of the cryptocurrency exchanges that support it. Bitfinex and Binance are the two exchanges with the highest trading volume for IOTA, although you can also find it on Coinone and Coinfalcon. Consider a quick internet search to see if you can find another exchange supporting IOTA if you do not like those options.
Once you convert fiat currency to either Ethereum or Bitcoin, you can head to Bitfinex or Binance to begin the process of buying IOTA. You will need to begin by creating an account. Always opt for a strong username that is unique since this will help protect your account.
You should also opt for two-factor authentication for added security. You might need to verify your account on the exchange depending on the one you choose and how much IOTA you plan to buy. Binance, for example, has a daily limit for withdrawals of 2 BTC (or its equivalent) every 24 hours without additional verification.
Once your account is set up, go ahead and log in. Now, you will need to go to your account page and select “Deposit.” You should see a choice of cryptocurrencies to deposit into your account, so choose the appropriate one. The exchange will give you a wallet address to deposit the funds into. Remember that each cryptocurrency has a unique wallet address, so you would need to send Ethereum and Bitcoin to two separate addresses.
You can now log into the wallet you store your cryptocurrency in and send the amount you wish to deposit to the address you got from Binance or Bitfinex. Your account page should show when the deposit clears.
Now you will actually be able to buy IOTA. Go to the Exchange section of your chosen crypto exchange and find the trading pair you want. Binance lets you place a limit or market order. Bitfinex also offers a range of order types, including market orders, which will be the simplest.
On either exchange, enter the amount of BTC or ETH you want to sell for IOTA and finalize the sale. Once the exchange finalizes, you can view your IOTA in your exchange wallet.
Storing IOTA on the IOTA Light Wallet
Once you have your IOTA, you need somewhere to store it. Hopefully, you chose to download an IOTA wallet before buying it, so this cryptocurrency will not need to sit in your chosen exchange’s account for too long. Wallets are simply more secure than exchanges.
The simplest and most common choice of IOTA wallet is the official IOTA GUI client from IOTA. You can get this wallet whether you use Windows, Linux or Mac. As you set up the wallet, select a host and “light node.” You will need to create a seed with 81 characters that only has uppercase letters plus the number 9.
Store this seed securely. The light wallet is relatively easy to set up for those experienced with coding, and you can find detailed instructions online. Even so, it might be a bit challenging for beginners.
For those who want more information, you begin by downloading the wallet. The light node is enough for the average person, although those who are technologically savvy may want to run a full node.
You will have to choose a host from the dropdown menu, but you should be fine with any host you choose as long as you connect.
If you want, you can also figure out which host has the best ping and go with it, but that is not typically necessary. If the first node you choose delivers a “Connection Refused” message, just go to Tools, then click “Edit Node Configuration” so you can change nodes.
Unfortunately, IOTA will not automatically generate your seed, meaning you have to make one that is cryptographically secure. Your seed is essentially your password, so you want it to be as secure as possible.
You should never use a seed generation service you find online since malicious websites are popping up that will use their “free generation” to steal your funds once you put them in the wallet. If you have to go this route, do your research first to confirm the online seed generator you choose is safe.
You will enter your seed when you log into your IOTA wallet and will see a three-digit checksum next to it. Whenever you log in in the future, these three digits will always appear. After logging in, you are ready to generate a new Receive address and send your IOTA to the wallet.
Storing IOTA on Another Wallet
You can find a mobile wallet for storing IOTA, but always use caution when going down this route. At the time of writing, there are both iOS and Android versions, both of which are still in beta and therefore require additional care.
The Android version even has a disclaimer saying that you use it at your own risk. As a rule, do not store large quantities of IOTA on either of the mobile wallets until the full versions are released and they no longer have warnings attached to their descriptions.
A safer option is to opt for an IOTA paper wallet. This has the same requirements as the desktop light wallet from IOTA: 81 characters that include the number 9 and uppercase letters. You just generate the paper wallet and print it; then, you can start sending IOTA to the wallet.
Just keep in mind that copying the accurate address from a paper wallet requires lots of care. A single wrong character in the address will lead to a loss of money.
Because of this, your paper wallet will always include a QR code to scan. Long-term holders of IOTA, however, will likely want to go with the paper wallet.
IOTA is the method for settling transactions that allows for nanopayments and should provide numerous advantages for the Internet of Things. Because IOTA is currently less popular than cryptos like Bitcoin and Ethereum, the methods for buying it are somewhat limited, although you can still purchase it.
You will need to make sure you have cryptocurrency to buy IOTA with and that you have a secure wallet to store it in. Once everything is ready, you can hold onto your IOTA for as long as you want.