How to get started with IOTA - Part 1
Image source: blog.iota.org

How to get started with IOTA - Part 1

I recently got into IOTA, and wanted to share some insights on what it is and how to get started with it. I will also share some information about investing in it, but be aware that this is just what I personally learned and I do not guarantee you anything ;)

What is IOTA?

If you do not know what IOTA is, head over to their website and check it out. There are multiple interesting starting points:

Generally spoken, IOTA is a crypto currency (like Bitcoin, Ethereum, Litecoin,…) which is designed for the Internet of Things (in short IOT). Unlike most other crypto currencies IOTA is not based on a blockchain, instead it utilizes a so called “Tangle”. This is basically a directed acyclic graph which contains the data instead of it being in blocks. The promise of IOTA is that transactions are a lot faster compared to crypto currencies based on a blockchain and that there are NO transaction costs (which is a great thing if you look at the current bitcoin transaction fees). There is an indept presentation here. There is also a recent blogpost about the soundness of IOTA.

But be warned: IOTA is still in beta, so don’t expect a perfectly working network! It works (atleast for me) but it can be sluggish and there is a lot of potential for the current existing software (especially the wallets). Regarding the wallet software this is something that (currently) does not bother me much. When it comes to transaction speed, this is is one of the base promises of IOTA: While blockchain based currencies get slower with an increasing number of participants and transaction the IOTA network gets faster when the number of participants increases.

The Wallet

Currently there exists a wallet for Android and for desktop PCs. I have not tried the Android wallet yet but want to introduce you to the desktop wallet. You can get the current version here (at the time of this blogpost v2.5.4). Keep sure you update your wallet once a new version is released to stay up to date! To get started download the wallet for your operating system (for Windows the .exe file, for macOS the .dmg file) and install it.

The first time you start it you have to decide between a “light” and a “full” node, the easiest way to start is to choose the “light” node. You can read about the different types of wallets here.

Choose the “http://iota.bitfinex.com:80” address to connect your light wallet to, if it does not work, choose another node from the available list. The node01.iotatoken.nl also worked fine for me. After that, it looks like this:

The IOTA Wallet before and after logging in using a secure "Seed".

Here you can get more details about how to set up a light wallet.

The “Seed” is what you use to log in to your wallet, it is basically your username and password combined. This means it is VERY IMPORTANT, never show/tell it to anybody and keep it safe, if you lose it you lose access to your wallet. The Seed is a combination of 81 random characters using only A-Z and the number 9. You can generate a new Seed (=a new wallet) online, but be careful when you generate a Seed online, there are various scam sites which record your Seed and later use it to rob you of your funds!

A better way is to generate your Seed locally on your computer like this:

Linux 
cat /dev/urandom |tr -dc A-Z9|head -c${1:-81} 

Mac 
cat /dev/urandom |LC_ALL=C tr -dc 'A-Z9' | fold -w 81 | head -n 1 

These methods are taken from the official IOTA support site, you can read more details about it there. After you have a Seed, paste it into the login screen of your desktop wallet and log in.

Time to get some IOTA

There is actually an easy way to get a few IOTAs to play around with (this amount isn’t worth anything substantial, but enough to familiarize yourself with how it works and how to send/receive IOTA).

First generate a receiving address by switching to the receive section in the wallet, there you see the address string, and a button that says “Attach to Tangle”. Press it to inform the IOTA tangle about your address.

The wallet before and after attaching a new address

Now it is time to get a few IOTA to play around with. Either you have a friend that can send you some IOTA or you generate some. You can “generate” some at mineiota.com, this is a site where you can “mine” IOTA (actually you cannot mine iota, but this site mines moneros but pays you out in IOTA). Head there and enter your copied address (NOT your Seed, that you should never give that away!) into the site and press “Submit”.

Generating some IOTAs to play around with. Press the "update" button to check how many IOTA you already generated and press "Withdraw" once you got a few.

This site is not intended for generating a huge amount, but it is enough to get a few to get you started. You can see the progress in the list at the bottom. The site then puts your payout into a queue, this may take some minutes until it actually is initiated.

Waiting for the payout of my 13 IOTA

Once your transaction is started, you can head back to your wallet and check the “History” tab there. You should see 2 Transfers and 1 Address. The first transfer is from attaching the address you generated previously, the second one contains the IOTAs you sent to your address.

Once you see the transaction there it is probably still pending. This means it needs to get confirmed by the IOTA network.

The wallet showing the transaction for the IOTA from the mineiota website.

You can check the progress of the transaction here. Press “Check Bundle” in the wallet and then click on the “hash” in the top line. This copies the hash to your clipboard, head over to the tangle website and paste it in there to check your transaction. The status screen looks like this:

The status of your transaction.

Give the transaction some time to process, once this is finished (which can take a while - as mentioned at the beginning the whole IOTA system is still in beta) you can see the funds in your wallet. You can also reattach your transaction, which can speed up getting it done. But generally I would recommend to just give it some time.

After the transaction is confirmed you see this in the transaction tab as well as your received IOTA in the "Balance" tab.

A word about spending: You must not re-use addresses when you spend IOTA. You can read more details about it here but generally spoken:

“…there is no limit to the number of transactions an address can receive, but as soon as you’ve used funds from that address to make a transaction, this address should not be used anymore.”

This was a first short introduction about how to get IOTA to play around with. I experienced no problems when sending/receiving IOTA, it sometimes took some time but it generally worked fine (although some transactions were a bit slow). I also have not used it for bigger amounts, just with a few IOTA I got to test the network. I will soon write a next part about how I bought some IOTA on an exchange and what the easiest way was for me to achieve this.

If this helped you I would be glad if you buy me a coffee by sending me some IOTA or an other crypto currency, here are my wallet addresses:

  • IOTA: SUEJESQXFZSKZUAOWLLAAAIJ9CJAHZQGNIHSKA9VSZKICEGVPWIWSZWVCRLUTKREGGMUU9PUF9QCURT99BFMZB9FKY
  • BITCOIN: 1HT1XrVzYmvUfYyMVpwjtw7THGWqKMwU64
  • LITECOIN: LbJkdvwvUzACy9MiVMxYY8br6851QnVb5z
  • ETHEREUM: 0x1CD61B9101817F2eb4881Ab1E535b200Edde6cD3