Given 0 token and 0 fee transactions, what provides value to the IOTA token itself (not the IOTA network)?

Question

Since data 0 token transactions can be made (for 0 fees), what is the incentive to buy and hold IOTA tokens themselves? For example, bitcoin's fees inherently give bitcoin value because in order to make a transaction you must hold some bitcoin (similarly, fiat holds inherent value to citizens since they must pay compulsory taxes in it). This is not the case with IOTA, as you can use the network for as much data transfer as you'd like without ever owning any of the tokens themselves. Even settling a balance transfer recorded on the IOTA network could be done in other currencies, not necessarily with the IOTA token.

Can someone describe why the tokens themselves would have or appreciate in value?

Answer 1

Here are some properties of IOTA:

• Scarce: has a finite limit

• Can be used to purchase things instantly and without fees: cheaper to make purchases for both buyer and seller, creating value over credit cards and paypal

• Can be used without human operator: machine to machine transactions

IOTA does money BETTER than current options, therefore, people are incentivized to buy the token in order to use it to make purchases, a la a natural economy. This is the same logic as to what gives FIAT currencies value, except instead of government backed, IOTA is decentralized consensus backed.

Answer 2

In order to send value over the IOTA network you must use the IOTA token/coin so it will have stored value. Also, the value of the services offered over the network and the value of the sensor data available from devices over the network will give it market value. Another way it has value is from the exchange value with other cryptocurrencies on exchanges as more investors get involved in that market.