Updated October 15th, 2018 by Diego Riitano

A variety of altcoins exist, all with differing purposes and unique tokens.

However, they can be difficult to buy or even locate.

Most altcoins can only be bought with other cryptocurrencies, and cannot be directly purchased with fiat currencies.

However, the greater difficulty in buying means that greater profit may be reaped if an obscure altcoin explodes onto the crypto scene.

This guide will explain everything you need to know in order to buy IOTA, an altcoin based on a new technology called the Tangle.

How to Buy IOTA in US with USD

There is no way to purchase IOTA directly with USD. Instead, you have to purchase another cryptocurrency with USD, then trade it for IOTA.

Before Buying IOTA: Purchase Bitcoin or Ethereum

Before buying IOTA, you have to buy Bitcoin or Ethereum first. If you live in the US or one of these countries, you can buy Bitcoin through our step-by-step guide.

Step 1: Send to an Exchange

After buying Bitcoin, you need to send it to an exchange that trades IOTA. In this guide, we will be using Binance, which is one of the best ways to buy IOTA. Binance supports buying IOTA in the US and many other countries.

After signing into Binance, look in the upper-right corner, hover over the Funds tab, then select Balances.

Scroll down to Bitcoin, then click deposit.

Copy your Bitcoin deposit address. Be sure to use your own address, and not the one shown in the picture.

Sign into Coinbase, then select the accounts tab.

Under your Bitcoin wallet, select the send button.

Paste your Binance wallet address in the recipient box. Enter the amount of Bitcoin in dollars that you would like to send, then click continue.

You will then be prompted to confirm your transaction. You will also be shown the miner fee for your transaction. This fee varies, and does not go to Coinbase, but instead to the miners who verify blocks on Bitcoin’s blockchain. If you have 2-factor authentication enabled, you will also be asked to enter your 6-digit verification code.

After you send your Bitcoin, it may take some time to arrive. Don’t panic immediately if your Bitcoin has left Coinbase but not arrived at Binance. Depending on the Bitcoin network and websites themselves, transfers may take some time to process.

Step 2: Buy IOTA

After your Bitcoin transfers to Binance, then you can purchase your IOTA.

Back on the Balances tab, scroll down to IOTA and click Trade. In the dropdown menu, select IOTA/BTC.

In the middle of the screen, select the Market tab. In this tutorial, we will be buying IOTA with a market order. There are other types of orders, but market orders are the easiest to use.

Enter the amount of IOTA you would like to buy. The price you pay per IOTA will be shown at the top right in dollars and in Bitcoin. After entering the amount you would like to buy, click buy IOTA. Binance will take a .1% fee from your transaction.

After buying, you should be able to view your IOTA in the balances tab.

Step 3: Securely Store Your IOTA!

Once you buy, your IOTA is stored on the exchange wallet. Although your IOTA has been received, it is not totally secure. Every wallet has a private key, or a sequence of numbers or letters.

Each private key is unique to one wallet, and allows access to the contents of that wallet.

If you have IOTA on an exchange wallet, they will control the private keys. This leaves your tokens more vulnerable to manipulation by others. If the exchange is hacked, the hackers will use your private keys to access your IOTA.

Additionally, if an untrustworthy exchange pulls an exit scam, they could walk away with your tokens. While these events may seem unlikely, they have occurred before multiple times.

The best way to store cryptocurrencies is usually a hardware wallet, as they combine security and accessibility.

Unlike Vechain and other ERC-20 tokens, IOTA currently has no compatible hardware wallet, and must use a software wallet. Software wallets are programs that are downloaded onto a computer or other device and used to store cryptocurrency.

If you download a software wallet onto a device that remains connected to the internet, it is known as “hot storage”.

Hot storage may be better than an exchange wallet, but if a hacker gains access to your device, they can access your wallet as well.

Downloading a software wallet onto a device that becomes disconnected from the internet is known as “cold storage”. Cold storage is the safer way to use software wallets, as the lack of internet access will prevent hackers from infiltrating your device and your wallet.

The IOTA team has released an official software wallet that allows you to store your IOTA in hot or cold storage. For more information on cryptocurrency wallets, you can check out our guide to wallets.

Update: According to IOTA developer Peter Willemsen, support for IOTA on the [Ledger Nano S]](https://amzn.to/2H7TIsp){: target=”_blank”} has advanced significantly. IOTA is currently working on another software wallet known as Trinity, which aims to be more user-friendly and safer than the current IOTA light wallet. The Trinity wallet will be integrated with the Nano S to provide support for IOTA.

The IOTA foundation announced on October 12th that Trinity Ledger Nano S intregration is in the final stages of implementation, and alpha testing will begin in the coming days.

IOTA Overview

IOTA is a cryptocurrency based on an entirely new distributed ledger known as the Tangle. Similar to NEO, IOTA does not rely on another blockchain such as an ERC20 token.

The Tangle is based on a data structure known as Directed Acyclic Graph (DAG). This is vastly different from the blockchain that Bitcoin and other altcoins utilize.

In order to complete a transaction on the IOTA network, that transaction must verify two previous transactions. This small Proof-of-Work renders miners irrevelant. It also gives IOTA a number of unique features:

• The more users on the network, the faster transactions are verified, giving IOTA high scalability – this means transactions are nearly instantaneous
• No transaction fees
• More decentralized than any blockchain since it has no miners
• IOTA utilizes a trinary hash function called Curl, which makes it immune to quantum computers

IOTA aims to become the standardized currency of the Internet of Things (IoT).

The Internet of Things is the network of objects connected to the internet that collect and exchange data. These objects include computers, phones, cars, smart thermostats, and even smart cities.

In the future, all these devices may exchange data and money between each other. IOTA’s ambition is to become the backbone of transactions for the IoT.

Should you Buy IOTA?

Now that you’ve read this guide, you know how to buy cryptocurrency, exchange it for IOTA, then securely store your IOTA in a wallet. But the question is, should you buy IOTA?

In order to understand whether or not you should buy a coin, you should understand more about the coin, how it works, its team, and its future plans.

This section of the guide will inform you more thoroughly about IOTA to help you decide if it is a coin you’d like to buy.

The Team

IOTA has 4 founders, David Sønstebø, Sergey Ivancheglo, Dominik Schiener, and Serguei Popov.

Sønstebø is an entrepreneur who is heavily involved in the Internet-of-Things, blockchain technologies, and Smart Cities. Ivancheglo is a Bitcoin early adopter and the lead developer of NXT. Schiener is involved with several blockchain and smart contract projects and Popov has a Ph.D in math and is currently a professor.

The rest of the team includes more than a dozen developers and designers with backgrounds in computer science, engineering, and electronics, among others.

The team also has half a dozen researchers and mathematicians. The team is backed by the IOTA Foundation, a collection of othe notable individuals.

Community

IOTA has a large and active community. They post regular updates on their blog. Their Twitter page has 110,000 followers. Their reddit page also has over 100,000 viewers. They also have a discord and a large telegram group.

IOTA’s community size shows that they have many people interested in their technology and token.

IOTA and the Tangle

Unlike almost all other coins, IOTA does not use a blockchain. It instead uses the Tangle. The Tangle is a directed acyclic graph (DAG), which is a specific type of data structure. Every time a transaction occurs on the Tangle, it must verify two previous transactions through a small amount of proof-of-work.

This solves many problems that many other cryptocurrencies. Because each transaction verifies others, there are no transaction fees. Transactions occur very rapidly since there is no need to wait for blocks to be mined. Additionally, as more participants join the network, it becomes not slower, but faster instead.

The Rise of the Internet of Things

In the future, IOTA aims to become the currency for the Internet of Things. The team envisions a network of internet connected devices exchanging data and micro-payments through the Tangle. While this may seem like a far-off future, more and more devices are becoming internet connected all the time.

Smart cities are cities that use information and communication technologies to manage resources and improve efficiency, and they are on the horizon. Other examples include smart homes, wearables, and smart retail.

IOTA has already released a Data Marketplace, where users can purchase access to a variety of data sensors. This pilot system demonstrates the usefulness that IOTA brings to the Internet of Things.

Additionally, on April 18th, IOTA was used to pay for the charging of a miniature electric car. This test demonstrates a real-world use case for IOTA and micro-payments.

Conclusion

IOTA is a unique cryptocurrency with an ambitious goal. The Tangle architecture is a novel type of data ledger, and it brings many impressive benefits. However, it is not proven like blockchain. It is still very new, and issues may arise with it in the future.

IOTA’s goal is to become the core of the IoT. While currently the IoT is not very developed, in the future it may become an integral part of our lives. IOTA is betting on the future of information and technology today.

Even among cryptocurrencies, IOTA is novel. It’s architecture and goals are unproven, but very ambitious. IOTA is a somewhat risky buy, but if its vision becomes reality, the reward for investors will be substantial.

NOTE: We are not financial advisors and none of this information should be taken as investment advice. We take no responsibility for any losses incurred through cryptocurrency trading.