IOTA, designed as a cryptocurrency for the Internet of Things, suffered a 20.16-point price drop in the last 24 hours, the biggest fall for all cryptocurrencies holding more than $1 billion in market capitalization, and the highest for all top 100 cryptocurrencies besides Peerplays, a currency with a $48.444 million market cap, which dropped 42.8 points, according to coinmarketcap.com.
The recent decline for IOTA reflects a volatile history for the cryptocurrency that launched on June 13 and immediately shot to the top 10 cryptos.
A Volatile History
The recent 24-hour fall largely reversed a 26.48 gain reported on June 24, which marked the biggest gain as the price hit $0.525929 for a $1.461 billion market cap. IOTA was rebounding since suffering one of the largest losses in the prior week, when it dropped 36.5 points in a 24-hour period. The price fell from $0.634748 on June 13 to $0.300365 on June 15, where it hovered until reaching its June 26 peak.
The price was $0.415750 June 26, falling from $0.594677 on June 24.
IOTA, the eighth largest crypto with a $1.138 billion market cap as of June 26, traded $7,496,560 in the last 24 hours. There is currently a circulating supply of 2.779 billion MIOTA’s, its maximum supply.
A Blockchainless Crypto
IOTA, the first cryptocurrency without a blockchain, uses a protocol called the “Tangle,” which is based on DAG technology. In a traditional blockchain, various transactions are bundled in each block before this bundle of transactions is verified by miners. In the Tangle, every single transaction forms a new block and is essentially verified by itself: In order to successfully conduct a transaction, you first have to verify two randomly chosen transactions is the network.
Bitfinex officially launched the IOTA token on June 13.
Also read: ICO analysis: IOTA
A Promising Launch
After going live on Bitfinex, the transaction volume quickly became so massive that the Bitfinex servers briefly went down. Within the first three hours of trading, 4.44 million mega IOTA were traded with the IOT/USD pair, an amount that increased by the second. The IOT/BTC trades showed even greater activity, showing 11.67 million mega IOTA traded in the same period.
All of which sent IOT straight into the top 10 cryptocurrencies by market cap.
The Tangle project began in mid-2015 aimed primarily at Internet-of-Things for machine-to-machine payments and data integrity. The founders realized that Internet-connected devices need a way to do settlements and data transfers securely in order for IoT to work.
One drawback of existing cryptocurrencies is the difficulty of making micro-payments, which have increased in importance with the rapidly developing Internet-of-Things industry, the Tangle white paper noted. In the available systems, one must pay a fee for making a transaction. Hence, transferring a very small amount makes no sense since there would also be a fee which can be many times larger. At the same time, it is not easy to get rid of the fees since they serve as an incentive for the creators of the blocks.
Featured image from Shutterstock.
Last modified: March 4, 2021 4:57 PM