IOTA Wallet

IOTA Wallet – which digital wallet should you use to securely store IOTA?

In this article we will take a very detailed look at the question of how best to store IOTA crypto coins. To store crypto currencies you need a so-called Crypto Wallet. You can imagine this in principle like a digital purse. However, there are big differences in terms of security. We will also go into this in detail. We will also discuss how best to trade with IOTA. All in all, IOTA is a very interesting crypto currency that has a lot of potential. Therefore, large companies such as Deutsche Telekom, Samsung and Volkswagen are also interested in the Crypto Coin.

  • Why do you need a Crypto Wallet to store IOTA?
  • What advantages and disadvantages do online and offline wallets offer?
  • Using IOTA Light Wallet and Trinity Wallet to store IOTA
  • What is the best way to trade crypto currencies like IOTA?

Create IOTA Wallet: How to store crypto currencies?

After buying a crypto currency like IOTA, the next question is how best to store the crypto coins. If you bought IOTA on a crypto wallet (more about this later), you could simply leave the coins on the wallet’s account. However, many crypto exchanges have been victims of hacker attacks in the past. Often the unauthorized third parties have succeeded in stealing many coins. Therefore it is recommended not to store the crypto currencies on crypto exchanges. Instead, one should proceed as follows: On the crypto exchange you should only store as many coins as you actually need for trading. The majority of the crypto currencies should be stored in a different way.

There are several ways to store crypto coins like IOTA. In any case you need a Crypto Wallet. You can imagine it like a digital wallet. But there is an important difference between a normal wallet and a digital wallet: The wallet actually contains coins or banknotes. On the other hand the Crypto Coins are not stored with Kryptowährungen in the Wallet itself. Instead, wallets at IOTA contain the so-called “seed”.

WHAT IS THE MEANING OF THE SEED AT IOTA?

Seed is a character string consisting of letters and tooth 9. For the letters the English alphabet is used, so the seed does not contain any umlauts or a “ß”. In addition, every seed must contain the number 9 at least once. Other numbers are not allowed. On the other hand, it is quite possible that the number 9 occurs several times in a seed. The length of the string is 81 characters in total. An IOTA Seed can therefore look like this:
FIQU9UJQD9FCIROXM9DZMZKVOJOBEAUNEOTPQSL9HZPWJGRYHFQ9XZGVM9RKGCJHG9AUD9LLKXJJCJTM

You can imagine the seed at IOTA like a key. It is a combination of user name and password. Whoever has the seed is considered by the IOTA network as the owner of the coins. Therefore, the owner of the seed can also transfer crypto coins, for example. For this reason it is very important to keep the seed safe. Without it you have no more access to your crypto currencies.

If the seed is lost, the coins are lost. This is similar to having only one key for a safe. As soon as you lose the key, you can no longer access the safe. At IOTA, for example, there is no way to “drill into” the safe to get to the contents of the safe without the key.

HOW CAN YOU RECEIVE CRYPTO CURRENCIES AT IOTA?

As just mentioned, as the owner of the seed, you can send your Crypto Coins. So you have for example the possibility to send yourself IOTA Coins (to another wallet) or to transfer the crypto currencies to third persons. But how can you receive IOTA? Also for this you use the seed. However, only a small part of the seed is needed. From this a public address is created. You can imagine this as an account number. So if you want someone to send you IOTA, you should proceed as follows:

  • First you have to create a public address from your seed. For this purpose there are websites as well as software to download. We will go into this in more detail later in this article.
  • Then you can give this public address to the third person.
  • This way the third person can send the IOTA Coins to the public address.
  • Here it is extremely important that you never give the seed to a third person. Because to receive money, the public address is sufficient. If the seed were to be given away, third parties would also have access to the coins. This must be prevented in any case. This is exactly why the Crypto Wallets exist.

IOTA Wallet: What is the difference between online and offline wallets?

Basically there are two different types of crypto wallets, namely online wallets and offline wallets. As the name suggests, an online wallet is permanently connected to the Internet. Often this type of wallet is also called a hot wallet. Such a on-line Wallet has both advantages, and disadvantages: A large advantage consists for example of the fact that one can use a Hot Wallet to some extent like a current account. Thus there are ever more business (above all on-line Shops), which accept also crypto currencies as means of payment. In this case it is however actually necessary that by Internet to the crypto currencies also can be accessed.

Altogether it is to be counted on the fact that one will be able to pay in the future in ever more business with Crypto Coins such as Bitcoin, Ethereum and IOTA. In many countries one is here already clearly further than in Germany. The USA and Asian countries such as China, South Korea and Japan should be mentioned here in particular. However, in neighboring Switzerland, for example, Bitcoin can also be obtained from the ticket machines of the Swiss Federal Railways. Sooner or later, this trend will probably continue to prevail in Germany as well.

USE ONLINE WALLETS AND SOFTWARE WALLETS TO STORE IOTA COINS

Online wallets are provided by numerous websites, for example. The use of these wallets is usually free of charge. This is why this type of Wallet is so popular. There are also software wallets, which can be downloaded and installed on the computer. If the PC or Mac is not connected to the Internet, this type of wallet is offline. However, in order to be able to pay or send money with the software wallets, it is necessary to be connected to the Internet. In this case, there is again the increased risk of an online wallet. When downloading IOTA wallet software, you should also make sure that you only download the software from websites that are trustworthy and reputable. Otherwise you run the risk of the software being manipulated by hackers, which in turn poses a considerable risk for your own coins.

Meanwhile there are more and more wallets that can be used as apps for smartphones and tablets. These are also online wallets. The download is done here for Android devices via Google Play and for iPhones and iPads via the Apple App Store.

FOR STORING LARGE AMOUNTS OF CRYPTO COINS, IT IS BEST TO USE AN OFFLINE WALLET

However, with an Online Wallet there is always an increased risk that unauthorized third parties may gain access to the Wallet. Therefore it is advisable to store only as many Crypto Coins in an Online Wallet as you actually need. As mentioned, you can use the coins either for payment or for trading on digital marketplaces or crypto exchanges (see below). Most of the crypto currencies should be stored in offline wallets. Such offline wallets are often called cold wallets. In principle, one can distinguish between hardware wallets and paper wallets. In this context, a hardware wallet can be thought of as a USB stick. The seeds are stored on it in encrypted form. Normally, a two-factor authentication is used for hardware wallets. This means that you have to enter a PIN before you can access the wallet.

Overall, hardware wallets are much more secure than online wallets. Also the prices have dropped to 50 to 100 €. All in all, as already mentioned, we recommend storing larger amounts of coins in cold wallets. Most hardware wallets also support different crypto currencies. Therefore you don’t have to buy a new wallet for every single coin.

USE AN IOTA PAPER WALLET TO STORE THE CRYPTO CURRENCY

Besides hardware wallets, paper wallets can also be used. This is also a Cold Wallet. Basically this type of wallet consists of writing down the seed and the public address on a piece of paper. To create such a wallet you can either use a website or download a program for it. Again, you should only obtain the Paper Wallet from trustworthy sources.

All in all, we recommend to keep the seed in several wallets. However, these should only be offline wallets. For example, you can use a hardware wallet and store it in a safe. In addition, it is a good idea to use a paper wallet. The sheet of paper with the seed can be deposited in a safe deposit box, for example. This way you are protected in case the Hardware Wallet gets lost. Conversely, you are protected by the Hardware Wallet in case the Paper Wallet gets lost.

As I said, it is very important that you never lose the seed. Otherwise the IOTA Coins are irretrievably lost. All in all, the security can be increased very much by using offline wallets. This makes it much more difficult for hackers to get the coins. The weak point in this case is rather the correct storage of the cold wallets.

Using IOTA Light Wallet for storing the crypto currency

The Light Wallet is currently the most popular wallet when it comes to storing IOTA. This is a software wallet and therefore an online wallet. The wallet exists in two different versions: As Light Node and as Full Node. For the private investor and trader the Light Node is usually the right choice. Because it has exactly the functions that you expect from an online wallet: You can use it to create a seed and a public address. In addition the seed is stored in the Wallet. The moreover one the possibility exists of sending Crypto Coins with the help of the Light Wallet.

Whoever downloads the Full Node, however, becomes part of the IOTA network. This way you provide computing power with your own computer to process the transactions in the network. This is comparable to the “miners” in Bitcoin. However, you get coins as a reward if you manage to find new blocks for the block chain. In IOTA, on the other hand, the transactions are free of charge and therefore you do not receive any coins if you use the full node.

If you use the Light Wallet you should keep in mind that this is a Hot Wallet. Therefore, the risks described above also exist here. For this reason it is recommended to store only a small part of your Crypto Coins in this wallet.

USE IOTA TRINITY WALLET FOR STORING CRYPTO COINS

Another popular wallet for storing IOTA is the Trinity Wallet. This digital wallet is also an online wallet. The wallet is also available as an app for the smartphone or tablet. In this way, you always have your Bitcoins with you. Just like the Light Wallet, the Trinity Wallet is very easy to use. Therefore the two Wallets are likewise very well suitable for a risers.

In our experience, many manufacturers of hardware wallets work with the Trinity Wallet. This is important if you want to transfer the coins from the hardware wallet.

At this point we would like to stress again how important it is to keep your seed very safe. In the past it has happened quite often that investors and traders have lost their seeds. Furthermore, as you can imagine, seeds are a very popular target for hackers of the. But if you are careful and store a large part of your coins in cold wallets, you should be on the safe side overall.

Overview of the Crypto Coin IOTA

After we have discussed in detail how to store IOTA, we will now talk about the crypto currency itself. As is well known, Bitcoin appeared in 2009 as the first crypto currency worldwide. For this reason, Bitcoin is also known today as first-generation crypto coin. IOTA, on the other hand, is much younger: the digital currency was not developed until 2016. Since 2017, trading with the crypto currency is also possible. Within a very short time, IOTA succeeded in asserting itself against many other crypto coins. Today, the market capitalization of Crypto Coin is about 600 million US dollars. Through this, IOTA succeeds in placing itself in the worldwide Top 20 of the Crypto Charts.

The name IOTA is explained as follows. So “Iota” is the smallest letter in the Greek alphabet. In addition, the sequence of letters contains the abbreviation “IoT”. This in turn stands for the Internet of Things.

The Internet of Things describes the attempt to represent real objects virtually on the Internet. In this context, the term Industry 4.0 is often used, for example to describe the possibility of machines and robots processing payments between each other in the future. The whole thing is supposed to run without human intervention and banks are not needed for this. All in all, experts assume that this is a very large growth market. IOTA wants to become “the” crypto currency for the Internet of Things.

Using digital marketplaces, crypto exchanges and CFD brokers for trading with IOTA

In order to profit from the growth potential of the Internet of Things, it makes sense to invest in IOTA. Fortunately, it is very easy to trade with Crypto Coins these days. In principle, you can use the following three possibilities:

  • Digital market places for crypto currencies
  • Crypto exchanges
  • Crypto Broker (Trading with CFD)

As already mentioned, Bitcoin was launched in 2009. Shortly thereafter, the need for opportunities to trade the new digital currencies arose. For this purpose, digital marketplaces for crypto currencies developed. In principle, these can be imagined like a normal marketplace. However the market participants meet there, in order to trade with one another with crypto currencies. The special feature of a marketplace is that the transactions take place directly between the buyers and sellers. The operator of the digital marketplace therefore only provides the necessary infrastructure. This concept, however, means that transactions often proceed rather slowly. After the purchase, the buyer must first send the money to the seller. Sometimes this can take several days.

For this reason, some digital marketplaces nowadays offer the possibility of using a so-called express trade. In this case, the platform operator works together with a certain bank. As a customer you can open a current account with this bank, which will then be linked to the marketplace. As a result, the transactions will run faster in the future. However, the whole thing has the disadvantage that a new current account with SCHUFA can have negative effects.

Buy the Crypto Coin IOTA at a Crypto Exchange

Due to the disadvantages of digital marketplaces described above, many market participants now prefer to trade on crypto exchanges. Trading does not take place directly between buyers and sellers. Rather, the transactions are conducted via the operator of the crypto exchange. This has the advantage that trading is much faster this way. With most Crypto Exchanges it takes only a few minutes to create a trading account. Then it is necessary to send Crypto Coins or capital to the account. After that you can start trading the crypto currencies. In our experience, many exchanges also provide an IOTA Wallet.

Frequently, you can use several payment methods to send money to your account at crypto exchanges. These include in particular:

  • bank transfers
  • Credit cards (for example MasterCard, Visa and American Express)
  • Payment service provider (for example, instant bank transfer)
  • Online Wallets (for example PayPal, Skrill and Neteller)

As an investor and trader, you should be aware that some crypto exchanges charge fees for deposits and withdrawals. You should also take into account that transactions by wire transfer are usually the slowest. If you want to fill your account as fast as possible, you should use credit cards or online wallets like PayPal. You should also make sure in advance that the stock exchange also offers trading with IOTA

Use CFD Broker to trade with IOTA

As shown, investors and traders can use digital marketplaces or crypto exchanges to buy IOTA and sell IOTA. However, CFD brokers can also be used to trade the crypto currency. Many traders already know these brokers from trading stock indices (for example DAX and Dow Jones Index) and currencies (for example Euro / Swiss Franc). Nowadays one has however also with ever more offerers the possibility of trading with Crypto Coins such as Bitcoin, Ethereum and IOTA.

CFD trading has many advantages. For example, you do not need an IOTA Wallet to store the coins. Rather, the crypto currency is on the trading account as a CFD. Therefore you do not have to worry about hackers taking over the Crypto Wallet and stealing coins.

Furthermore, trading CFDs provides you with a lever. The leverage determines how much capital you need on your trading account to trade a certain number of Crypto Coins. With the help of the lever you can therefore increase the purchasing power of your capital. This is illustrated in the following example: We can see in our trading software that IOTA is currently priced at 0.20 US Dollar. Therefore, in order to be able to trade 1,000 Crypto Coins, we need 200 US dollars in the account. With a CFD broker, however, you have the possibility to use a leverage of 1 : 2 for trading with crypto currencies. For this reason, the required capital for our trade is reduced to only 100 US dollars. With 200 US Dollar we could trade even with 2.000 IOTA Coins. In this case, the price movements of the crypto currency have twice as strong an effect.

Test trading with IOTA on a free demo account

In order to test trading with IOTA without risk, it is advisable to create a free demo account with a CFD broker. With most providers you need only a few minutes for this. In addition, you often have the possibility to register with your existing Google or Facebook account. Usually you will already get real prices on the demo account, so that the trade with Crypto Coins can be simulated very well. On a demo account, however, trading does not take place with real money. Rather, the CFD broker provides you with a virtual credit balance. In our experience, this often involves amounts between 10,000 € and 100,000 €. This virtual capital can be used very well to try out trading with CFD without risk.

In addition, the demo account is a good way to get used to the sometimes very strong price movements of Crypto Coins. It is also recommended to test different strategies for trading with the crypto currencies. In addition, the demo account is a first-class opportunity to familiarize yourself with the broker’s trading platform.

Often the demo phase is limited to 30 days. Normally, however, it is possible to extend this period without any problems. During this time you can usually also take advantage of the training offered by the brokers to increase your trading knowledge. Experience shows that webinars and trading videos are particularly popular. As soon as you feel comfortable trading on the demo account, you can continue trading with IOTA on a real money account.

Conclusion: Use IOTA Wallet to store the crypto currency as secure as possible

In the context of this article we have gone into great detail about how to store IOTA. As an investor and trader you have the choice between online and offline wallets. As shown, it makes sense to store most of your Crypto Coins in Offline Wallets. On the other hand, if you use a CFD broker for trading with IOTA, you do not need a wallet. This also has the advantage that you can use leverage for trading. Thus the purchasing power of the capital can be increased. In general, with many brokers 100 € or 200 € are already enough to open an account for Crypto Trading. To find a good broker, it is recommended to use our big broker comparison. In it we compare the individual providers conscientiously and show the respective advantages and disadvantages of the brokers. In this way it is easy to find the cheapest possible broker for crypto trading. In addition, we also compare, for example, the various training offers and customer support of the brokers. As already mentioned, it is also useful in this context to test the CFD Broker in a free demo account without risk.

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