The Economic Model of IOTA

I’ll try to explain the token economics of IOTA and why it will have real tangible and intrinsic value.

First, we have to understand that any currency is valuable only because others believe it’s valuable. It’s true for the dollar, Bitcoin, gold and any other storehold of wealth/medium of exchange that doesn’t provide a good or service. You can buy food with your dollars because the merchant accepts it, knowing that someone else will accept it too. He will be able to convert it at a stable rate for something else he wants. But are the holders of the dollar entitled to anything? No! The same is true for Bitcoin and gold. The point of this post is not to diminish the value of Bitcoin nor gold nor any other cryptocurrency. I too believe that they have better characteristics than the dollar or any other fiat currency, which is easily inflated.

The point of this post is to make a comparison between these currencies and IOTA. IOTA too is a currency and its value is derived from other people believing in it, but there is one key difference. When you hold Bitcoin you do not have any claim on the networks resources. When you hold IOTA, you do!