Note: BitIRA does not currently offer IOTA IRAs, though it may in the future. Currently, other crypto IRA types are available.
When they were first created, IRAs were mostly fairly crude investment accounts whose relatively limited investment options were managed entirely by third parties. Nowadays, following decades of evolution, you have the ability to set up an IRA that is entirely handled by you and supports a wide variety of asset classes.
With the rise in popularity of cryptocurrencies, these tokens are finding their way into many ambitious IRAs, and with good reason. Helping our customers introduce this new asset class to their IRAs is our mission, and we’re constantly expanding our coin offerings with new standouts.
One cryptocurrency that we’ve taken an interest in, and one that shows immense promise, is IOTA. More than simply building on the existing blockchain infrastructure, the developers behind IOTA have created an entirely new distributed ledger, called the Tangle. Compared to other cryptocurrencies, the Tangle-powered IOTA insists on zero transaction fees and a more secure data storage system than the blockchain, which is already considered an immense improvement over legacy systems.
But before we go over IOTA’s benefits compared to other cryptocurrencies, let’s delve into how you can introduce this and other tokens to your self-directed IRA.
Diversification Enabled Via Self-Directed IRAs
Benefits of a digital SDIRA versus conventional retirement options
Some investors like a hands-off approach to investment, including within their IRAs. Others, though, are more keen on deciding what goes in and out by themselves, and thus prefer to open a self-directed IRA (SDIRA).
With an SDIRA, you don’t have to worry about others making bad calls with your money, and you have many more options available for managing your retirement savings. If you have chosen to go with this latter route, cryptocurrencies may have piqued your fancy as an alternative asset with plenty of potential.
Converting your IRA/401(k) to a digital SDIRA
Once you’re ready to explore this option, our support team will take a look at your current retirement accounts and work with you on transferring them to your digital IRA. Traditional, Roth, SEP, or SIMPLE IRAs are all account types that we routinely roll over for our customers, and they are all easy to move into a self-directed digital IRA.
Employer-sponsored retirement accounts, such as a 401(k), 403(b) and TSP, are a bit different, as you’ll need to ensure eligibility to perform a rollover into a digital SDIRA. Once we’ve determined if your account is eligible, we will handle the paperwork and verify that you can transfer it into your new digital IRA. A digital SDIRA portfolio can include funds from both pre-existing IRAs as well as the employer-sponsored accounts.
Your self-directed digital IRA will greatly expand the number of assets available to you and give you unparalleled access compared to other retirement options. And while the process might seem intimidating due to the number of choices, the specialists at BitIRA are always a call or email away to provide whatever information or resources that you need.
Taking control of your future with a digital SDIRA
When rolling over your existing retirement accounts into a digital SDIRA, your funds will be transferred to one of our partner custodians, either the Equity Trust Company or Preferred Trust Company. From there, we can help you acquire whichever cryptocurrencies you’d like, and then ensure that they stay safe by employing cold storage, the most secure option available.
Besides purchasing tokens, you can diversify your new and improved portfolio by adding standard and alternative assets to the account (stocks, bonds, precious metals and real estate are just some examples).
From the moment you decide to open a crypto SDIRA with us, our in-house team of digital currency specialists will be at your service to help you with each of these steps and guide you through the process as you see fit.
The benefits of having an SDIRA over a conventional IRA are many, and adding digital assets to the mix makes the prospect even more tantalizing. For example, so long as you keep all of the funds within the umbrella of your IRA, you can buy and sell tokens without having to pay taxes on capital gains.
Cryptocurrencies offer a tremendous diversification option. They are decentralized, wholly digital, future-oriented and capable of the kind of growth that few other asset classes can boast. While we provide numerous tokens for our digital IRAs, IOTA has caught our attention as perhaps the most promising new entry in a while. But what, exactly, makes IOTA so special?
IOTA – the new player on the block
Leveraging DAG to Improve the Ledger
Depending on your familiarity with cryptocurrencies, it might be helpful to explain that virtually all cryptocurrencies operate on something called the blockchain, an immutable ledger that stores data inside a block and transfers it from point A to point B. While an amazing technology in its own right, blockchain-powered cryptocurrencies have continued to face the same problems despite new advancements.
One of these problems comes in the form of transaction fees, which have steadily increased as tokens became more sought-after, expensive and difficult to create. Another is security; while blockchain is undeniably one of the most secure data-storage methods available, it is, in theory, still vulnerable to a quantum brute-force attack in the near future.
IOTA developers have taken on a bold approach by forgoing blockchain and developing an entirely new, and some would argue superior, ledger. This ledger is officially dubbed the Tangle network, while its underlying technology is called the Directed Acylic Graph (DAG).
Blockchain vs. DAG – which is better?
As great as blocks are, they still require permissions and validation from others, leading to the problems outlined above. IOTA is aiming to bypass this by taking the next step when it comes to digital money. Instead of creating derivatives of blockchain in order to bypass its growing scalability issues, the team behind IOTA have created the acylic graph system.
When you make a transaction with IOTA, you are paying the transaction fee yourself by approving two previous transactions on the network through computational work. Although this still doesn’t make transactions free in the truest definition, it’s definitely a step up over having to pay upwards of $30 every time you send Bitcoin to someone.
In contrast to blockchain, where you depend on miners for verification, the acylic network’s placement of Proof of Work on the sender creates an environment where transactions are not only instant, but also free from congestion as the token becomes more popular. In fact, with IOTA, each added transaction will make the DAG network more secure due to its underlying principle. This has understandably created quite a bit of buzz among those in the know.
Why do some investors and techies like IOTA so much versus other cryptocurrencies?
The first and most obvious answer to this question lies in the form of nanopayments as well as free and secure transactions of large sums of money. The issue of micropayments has long plagued the blockchain system, as sending small increments is rendered moot by having to pay a transaction fee larger than the transaction amount itself.
More than that, IOTA represents a revolutionary step to what is already a revolutionary technology. While blockchain has undoubtedly taken the world by storm and revitalized old systems, its core problems persist and aren’t easily solvable. In their development, IOTA’s team is looking even farther ahead in an attempt to create true anonymous machine-to-machine transactions.
And while zero-fee transactions are undoubtedly alluring, it’s the idea of investing in the future’s future, so to speak, that has garnered IOTA plenty of attention. The aforementioned potential of quantum brute forcing in the future and blockchain’s vulnerability to it has already been addressed far ahead of time by IOTA’s development team.
Don’t wait for the future – create your digital IRA today
While we don’t yet offer IOTA for purchase in a digital IRA, it has very much landed on our radar. If IOTA becomes a part of the BitIRA roster of tokens, and if you’ve subscribed to our newsletter, you’ll be the first to know.
In the meantime, have a look at how you can expand and diversify your retirement portfolio with a new and exciting asset class through one of our other tokens, including Bitcoin, Ethereum and Litecoin.