IOTA surpasses RIPPLE on MarketCap – Micro Trading of data on the rise

IOTA

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One of my first posts on DailyFintech touched upon IOTA, the crypto currency focusing on IOT technologies. I think it would be good to close the year with IOTA and the progress they have made since my first post. The IOT industry is growing massively with B2B spending estimated to reach $267 Billion by 2020. IOTA have been making progress in stealth mode for sometime, getting their technology (TANGLE) right.

In the past three weeks the price of IOTA’s coin (MIOTA) has moved up from about 40 cents to $5.5 (at its peak) and is now trading at about $3.5. When the announcement on the data marketplace that IOTA have been working on was made, it went past RIPPLE in market cap as the fourth most valuable cryptocurrency in the world.

CptoCCyMarketCapOld

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However, the exuberance has died down a little bit, and the marketcap chart now looks like this, where RIPPLE has taken its place back from IOTA.

CptoCCyMarketCap

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However it is clear that the market is starting to see value in what IOTA are doing. IOTA’s data market place initiative has participation from more than 20 global organizations, including Deutsche Telekom, Bosch, Microsoft, PricewaterhouseCoopers, Accenture and Fujitsu, as well as research groups from universities around the world.

The marketplace aims to give connected devices the ability to securely transfer, buy and sell granular and diverse datasets while ultimately facilitating access to data that oftentimes sits unused. This is made possible by IOTA’s Distributed Ledger Technology. I have used a short excerpt from my previous post (with some minor updates) on IOTA’s technology.

“IOTA could be connected to millions of devices and could facilitate micro transactions between the devices by paying miniscule amounts to each other in a frictionless manner. IOTA is a completely new distributed ledger innovated from scratch. Unlike the Blockchain, it contains no blocks and no miners.

They have developed something called a Tangle, which is a form of directed acyclic graph. Here a user sending a transaction verifies two previous transactions through a small amount of proof-of-Work. This means that the verification of the network is not decoupled from the network’s users, as is the case in blockchains. Hence there are no external parties to be compensated, which means that IOTA got absolutely zero fees on transactions.

Since everyone is validating two transactions for each transaction or data transmission they broadcast to the network, it means that the amount of validations i.e. transactions per second grows together with the activity on the ledger. In short: the more activity, the more validation.

For those who like a good technical read, their whitepaper is here”

IOTA

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The IOTA team have deliberately not done any marketing of their currency yet. There are at the moment three exchanges where IOTA can be bought- Bitfinex, China’s Binance and South Korea’s Coinone. The chart above shows the rise in the price of IOTA since mid November.

I personally am excited about the IOTA proposition. I have mentioned many times in my posts that data needs to be monetised at a micro level, and IOTA are doing exactly that.  As the number of B2B participants in the marketplace increases, the credibility of the technology should create demand for the IOTA coin.

Micro-payments for data is a concept that could cause huge disruptions across industries. However IOTA’s technology needs to scale and handle the data explosion from the IOT world. The data market place exercise is scheduled to go on until Jan 2018, however, as someone who missed the Bitcoin bus (or have I?), this (IOTA’s progress) would be something I would keep a close watch on.


Arunkumar Krishnakumar is a Fintech thought leader and an investor. 

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