IOTA has gone almost a month without a coordinator. Therefore, no IOTA transactions could be carried out during this time, only non-value transactions. The investors were forced to keep their IOTA. Hence the theory that many investors will sell their IOTA on the market, as soon as the coordinator is up and running again and the coins can be transferred.
Born2Invest is a mobile application for crypto enthusiasts who want to find out the latest happenings in the sector, and the most important financial news. Our mobile application is a platform for the next generation of investors. We explore how cryptocurrencies and digital assets are contributing to the evolution of the global financial system.
IOTA and the centrality problem
IOTA has been at a standstill for quite some time. Although non-value transactions can be carried out, probably the most important asset in the own network cannot be transferred. This circumstance led to a strong criticism of the IOTA Foundation (IF), which, due to uncertainty in the form of a hack of the Trinity Wallet, switched off the coordinator to protect the users’ funds.
The reason is actually noble because it serves to protect the community. Many people in the IOTA community are less critical of the deactivation of the coordinator and are glad that IF was able to take such measures. David Sonstebo, one of the founders of the IOTA Foundation, also wants to compensate the victims of the hack from his own pocket.
It has to be admitted that the IF has shown its professional side all along the line. Transparency throughout the process was always present and the community was immediately informed of all updates. Nevertheless, the bitter aftertaste of the “Single Point of Failure” remains. IOTA is currently centralized by the coordinator. This creates potential dangers, which were already felt before the hack.
IOTA Community is aware of the centralization problem
This ‘problem’ of centralization should not be a problem for IOTA investors anymore. After all, the majority of them know that the project is still in its infancy and that the big updates are still to come. IOTA has long been pursuing the goal of removing the coordinator in the long term. This would also mean the end of centrality. Investors continue to firmly believe in the IF and the overriding goal of establishing a standard in the IoT sector.
Consequently, there should be no strong price movements on the stock exchanges after the coordinator has been activated. On the other hand, the entire market has plummeted in recent days. Thus, some investors may not have had the opportunity to sell their IOTA before the falling prices.
What speaks against this is that several reports showed a lot of investors are holding their coins on the centralized wallets of the exchanges. These investors could continue to trade with IOTA even when the coordinator was switched off. Logically, that only works if the actual trading on the exchange is not on the blockchain.
IOTA payouts from the stock exchange were not possible. The investors who have held their IOTA on the Trinity Wallet are usually very much behind the project and are not put off by such a situation.
Tendency towards sell-off
The IOTA exchange rate has fallen by more than 40% in USD since February, 12th, so the coordinator’s failure has already been factored in over the last few weeks. However, more likely is the Bitcoin crash of the last few weeks, which has torn down almost all altcoins.
A completely different theory is that the price of IOTA will increase again after the coordinator will be switched on. This is a somewhat irrational scenario, but it is still possible. It could be considered bullish news that IOTA has fixed the bug in the Trinity Wallet and transactions are possible again.
In summary, it can be said that the involvement of the coordinator will probably not have a major impact on the IOTA course. If it does, the tendency is for the price to drop rather than for it to increase. As soon as the coordinator is back on track, users will start again to trade their IOTA coins.
DISCLAIMER: This article was written by a third party contributor and does not reflect the opinion of Born2Invest, its management, staff or its associates. Please review our disclaimer for more information.
This article may include forward-looking statements. These forward-looking statements generally are identified by the words “believe,” “project,” “estimate,” “become,” “plan,” “will,” and similar expressions. These forward-looking statements involve known and unknown risks as well as uncertainties, including those discussed in the following cautionary statements and elsewhere in this article and on this site. Although the Company may believe that its expectations are based on reasonable assumptions, the actual results that the Company may achieve may differ materially from any forward-looking statements, which reflect the opinions of the management of the Company only as of the date hereof. Additionally, please make sure to read these important disclosures.
First published in CRYPTO MONDAY, a third-party contributor translated and adapted the article from the original. In case of discrepancy, the original will prevail.
Although we made reasonable efforts to provide accurate translations, some parts may be incorrect. Born2Invest assumes no responsibility for errors, omissions or ambiguities in the translations provided on this website. Any person or entity relying on translated content does so at their own risk. Born2Invest is not responsible for losses caused by such reliance on the accuracy or reliability of translated information. If you wish to report an error or inaccuracy in the translation, we encourage you to contact us.
Many community colleges forge ahead with major expansions
COVID-19 has impacted community colleges. It is puzzling and sad to see that some community colleges have extremely dire financial...
Apart from the rise of the Ibex35, pharma stocks fell by 2.7% in the second quarter
All listed pharmaceutical companies have advanced on the stock market, but Grifols, whose shares have fallen by more than 12%,...
Why using ESG research in COVID-19 times is important
The Corona crisis presents companies with a variety of challenges. Investors who incorporate environmental, social and corporate governance (ESG) factors...
Bitcoin course rally by 4,500%? BTC signal as before the 2017 Bullrun is back
According to Glassnode, 61.33% of the BTC offer has not moved for 1 year or more, which is a new...
The coronavirus favored the fintech sector and the digitization of Italian banks
The coronavirus crisis has affected all economic sectors. However, the fintech sector managed to thrive, thanks to the confinement measures...
Business6 days ago
How to create a video marketing strategy that gets results
Crypto6 days ago
ECTM Group launches blockchain certified sanctioning
Crowdfunding5 days ago
Two innovative SMEs raised more than €500,000 each with equity crowdfunding in June
Business5 days ago
In the year 2025 if fiat currency can survive