Derivation of Value
The full article was originally published by HelloIOTA. Read the full article here.
IOTA as a DLT has many features such as being fast (10 second finality), secure (auditable), scalable (1000+ transactions per second), and you can send the data — which IOTA was specifically designed for — for free as often as you want. But why would anybody buy the token? Where does the token derive its value?
When I prepared my first HelloIOTA Roundup video, I was motivated because of IOTA’s underlying technology tailored to fit the Internet of Things (IoT). Over the last two years, however, I have talked to several people who cannot share this enthusiasm: not because of the Tangle’s speed or security — but rather because they don’t see how the value of the token can go up if all of the data can be sent for free anyway? Why would companies (that would most likely only use the data part for free) or speculators (who would want companies to buy in) pay for this token?
There are several answers as to why IOTA is attractive for companies.
As a company, you want to have a solution that works. In order to ensure this, you want to try it out beforehand. Many blockchain projects offer nice data capabilities, but in order to try them out, you always have to be able to pay the respective fees, which means that tokens must be bought to be able to use the technology.
With IOTA, you can try out how the data transactions work without having to invest a penny. In fact, you can hook every sensor of your company to a private Tangle, making use of frameworks such as IOTA Streams (encrypted data streams), IOTA Access (access management), or even link it to the IOTA Identity part for integrating a self-sovereign identity solution.
Once everything is running as expected, you can flick the switch and hook your network to the worldwide, permission-less Tangle … the IOTA “mainnet”.