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IOTA 101 - a brief overview of everything IOTA

IOTA is pretty unique in how it works, and is often referred to as the "third generation" of cryptocurrencies. Where most cryptocurrencies are based on a blockchain, IOTA works on an tangle. This might sound like a relatively boring distinction, but it results in some impressive differences and features that other cryptocurrencies struggle to provide.

The best things about IOTA are:

  • No fees. None. Nadda. Zip.
  • Super fast
  • Super scaleable
  • Can be run offline

Sounds pretty good, right? To understand how IOTA manages to do all these things, let's start with looking at the infrastructure that IOTA is built on - the tangle.

What's a tangle?

So if you've read up a bit on Bitcoin and other cryptocurrencies, you'll know that they work on a blockchain. A blockchain is, quite simply, a chain made up of digital blocks. Each block records transactions that people make to each other. And as it's a chain, it has to be built in a linear fashion, one block after the next. This means that there is a limit to how fast the network can process transactions.

IOTA however, is entirely different. It runs on a tangle, not a chain. And as you might imagine, this means things don't have to be ordered and structured. Each block can link in to any other block, it doesn't have to wait in a queue to be the next block in the chain.

IOTA Tangle

The tangle is created by IOTA's protocol, which requires that each block verifies any two other blocks. This means that blocks can be added to the tangle in any order and as long another block verifies them, then they're good to stay. It also means that parts of the tangle can go offline for a period and link back in to the main tangle later.

How can IOTA have no fees?

Typical cryptocurrencies have blockchain network fees, which are the fees you must pay to get your transaction included in the blockchain. Fees can change from day to day, but can get quite expensy, for example Bitcoin fees can get up to $80 per transaction when there's lots of traffic on the network.

For IOTA , the tangle innovation removes the need for fees. Instead of having to pay someone (eg a miner) to verify your transaction and include it in the chain, each block in the IOTA tangle verifies two other blocks, removing the need for mining.

What is IOTA good for?

We've learnt that IOTA is super fast, can handle any number of transactions at once, has no fees and can even go offline. Those are some pretty powerful features!

With these, IOTA might help us unlock whole new micro-economies, which would never have been feasible without IOTA's tech. For example, NIWA might be interested in buying data from your home weather station at one millionth of a cent per data point - currently that's too ridiculous an amount for anyone to bother about, but with free-of-charge super fast transactions, it might make sense. And then your weather station could use that IOTA to buy power off your solar panel, which is also making IOTA from drones that are re-charging at it... the possibilities are endless!

And if this is starting to sound like IOTA could be a currency for the Internet of Things (IOT), that's exactly what IOTA (aka Internet of Things Application) is intended for.

drone charging

What's the difference between IOTA and MIOTA?

Because IOTA are intended for tiny micro payments, each coin is a very very very very small unit. They're so small, that when people trade in IOTA they group them up in to bundles of a million IOTA, which are called megaiota or MIOTA. When you buy and sell IOTA you will typically be trading MIOTA, not IOTA itself.

Sounds great! Where can I get some?

Here at Easy Crypto we can sort you out if you want to purchase MIOTA. We'll deliver your IOTA in a secure portfolio file, but if you want set up your own IOTA wallet, check out our how-to guide.

 

Click here to read more of our 101 series on cryptocurrencies.


Stellar Lumens 101 - everything you need to know

Firstly, a bit of clarification on what we're actually talking about. "Stellar" is an open source network protocol for the exchange of "lumens" (the currency of Stellar). The technology is based on the Ripple protocol, but after years of development has mainly developed its own code.

The best things about Stellar (the network) are:

  • speed - average of 2-5 seconds per transaction
  • cross currency payments - Stellar's platform enables payments to be sent around the world, between any different currencies
  • social conscience - Stellar is a non-profit business and sets aside funding for initiatives that promote financial inclusion
How does the Stellar network operate?

Stellar is a platform that connects banks, payment systems, and people. External companies can integrate with their protocol to move money quickly, reliably and at a very small cost.

So what makes Stellar unique?

Stellar was developed as an alternative to what the Ripple network was trying to achieve. Ripple was focussing on the existing financial services industry and signing up companies (banks) as partners. Stellar is aiming more towards the developing world and use from the general population. However; Stellar can claim to have IBM as one of its partners.

The Stellar Development Foundation

In keeping with its objectives, the Stellar team created the Stellar Development Foundation. Through this Foundation an interesting initiative has been implemented aptly named the Stellar Partnership Grant Program. This program offers 2 million USD worth of lumens to an organisation that facilitates the improvement of the global financial landscape and promotes financial inclusion.

What are the main advantages of Stellar Lumens?

Lumens are transacted very quickly across the Stellar network. The speed of a transaction averages from 2 to 5 seconds to complete. This is achieved due to the process in which the transaction is verified. All the Stellar servers are in sync with each other and all have a copy of the Stellar ledger. When a transaction is sent these servers quickly work to verify and come to consensus (known as the Stellar Consensus Protocol) prior to delivering the lumens to the destination address. Due to having this protocol Stellar doesn't require miners like bitcoin, giving it an advantage in speed.

An interesting piece of history

Stellar Lumens was co-founded by the original owner (Jed McCaleb) of the first ever bitcoin exchange; Mt Gox. 

How do I buy Stellar Lumens (XLM)?

Easy Crypto have you covered. We assist you in buying lumens from start to finish. All you have to do is choose your amount and the lumens will be delivered straight into your portfolio. Click here to start buying now.

Want to know more?

If you would like to know more about Stellar Lumens have a look at their page here. To see more articles on cryptocurrency, take a look at our series on cryptocurrencies.


Dash 101 - what is Dash?

Dash is a popular digital currency that differs from Bitcoin in several ways. Launched in April 2014 the development team created the currency with maximum speed and low fees in mind. Dash is also known as 'Digital Cash'.

The best things about Dash are:

  • Strong governance, which makes it easier for Dash to innovate and adapt
  • Innovative features, like InstantSend and PrivateSend
  • Fast and cheap transactions

So what makes Dash different from Bitcoin?

The process in which Dash handles transactions differs from Bitcoin due to the introduction of 'masternodes'. Masternodes are an additional function of the Dash system that perform some interesting tasks such as allowing anonymous transactions and enabling voting on project funding ideas. To create a masternode a person requires 1000 Dash 'locked' in a wallet.

At the time of writing it is approximately $800,000 New Zealand Dollars to be able to run a node. This is to ensure that those involved with the Dash network have a vested interest and are incentivised to make the best decisions for the network.

What about mining?

Dash has traditional miners just like Bitcoin and they receive 45% of the reward for facilitating transactions on the Dash blockchain. Masternodes receive the other 45% reward for assisting with the network.

So who receives the last 10% of the reward?

Everytime a new coin is minted; 10% of the rewards are put into a Dash fund to allow the developers to fund new projects related to the coin. For example Dash could plan to set up its own ATMs using the rewards, which will help drive its mainstream push.

All development ideas must be voted on by masternode users. This creates a democratic process around the spending of rewards and the direction and innovation of the Dash network.

What are the main advantages of Dash?

As mentioned earlier, Dash has very fast transaction rates and low fees. The average transaction takes less than 5 seconds to complete. The average fee is around $0.50 NZD.

Plus there's cool features! While Dash transactions aren't automatically anonymous, you can select to make an anonymous transaction on Dash through a process is known as PrivateSend. While anonymity might not seem like an important consideration for your standard payment, remember that the blockchain record of transactions is fully open and transparent. This means that if you pay me, I can see where you got that money from, and what address it received funds from, etc etc. Anonymity allows us to have privacy around our financial transactions.

Dash has also InstantSend which allows payments to be confirmed in around one second. Compared to Bitcoin where confirmations can take around an hour, this makes Dash a much better currency for real world situations like retail stores, cafes and restaurants.

How do I buy Dash?

Here at Easy Crypto we make it easy for anyone to buy Dash from start to finish - just tell us how much you want, and we do the rest. 

Want to know more?

If you would like to know more about Dash check out the official site here.  Or check our their YouTube channel.

For more articles about your favourite (or soon to be favourite!) cryptocurrency click here for the rest of our cyrptocurrency 101 series.


What is Bitcoin?

Bitcoin is a digital currency. In many ways, it operates just like any other currency. You can use it to buy goods and services, and you can use it to store value, just like you would money in your bank account.

But Bitcoin doesn’t have any real value, right?

That’s right - the only value Bitcoin has is what people are willing to pay for it. If this sounds a bit crazy, think about the money in your pocket. A $20 note itself is worth nothing (it's not even backed by gold). That note only has value because shops, banks, and other people all agree that that note can be exchanged for $20 of goods and services.

It’s exactly the same with Bitcoin. Bitcoin has no value in itself, but it is valuable because a community of people agree that it holds worth, just like with that $20 note. And for many people, Bitcoin is a better and more useful currency than the New Zealand dollar.

If it’s all digital, can’t you just create more Bitcoin?

The Bitcoin network sets a limit on how many Bitcoins can ever be created. That limit is 21 million, and currently around 80% of those have been created.

How are Bitcoins created?

The process to create Bitcoin is called “mining”. Miners process transactions on the Bitcoin network, otherwise known as the "blockchain". If I want to pay you 1 Bitcoin, I ask a miner to record that transaction on the blockchain. As a reward for processing my transaction the miner also receives some brand new Bitcoin, which is how Bitcoins are created.

Can I just buy part of a Bitcoin?

Absolutely. The smallest unit of a bitcoin is 0.00000001 and is called a “Satoshi" after the creator of Bitcoin. Currently 5000 Satoshis are equal to 1 New Zealand dollar.

You can purchase Bitcoin in any amount that you want. However, when you purchase Bitcoin you also need to pay a fee for your transaction to be recorded in the blockchain. At the moment, the fee is around NZD$40, so a transaction of lower value than that wouldn’t be able to be processed. This is one of the downsides to Bitcoin as a currency.

How do I buy Bitcoin?

To buy Bitcoin you need to find someone who wants to sell their Bitcoin, and you need to provide an address where they can send that Bitcoin to. An address is like a bank account number, where funds can be sent to and from. You can create your own address at bitaddress.org , or you can purchase through Easy Crypto where we manage the whole process for you. Easy!

Want to know more?

Read more about what makes bitcoin unique, or read about alt-coins like Dash, Stellar and IOTA.