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(+) Cryptocurrencies Have Shown Rare Stability Recently, but the Bulls are Coming

Originally published on: CCN
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March 06, 2018

Bitcoin is making a comeback – $11,400 is a good number. However, altcoins are not feeling the rally whatsoever. That being said, I am confident that a strong BTC adds extra positivity to the overall crypto market. When we saw BTC rally in December, we saw the flood into the alts as well, so new investors could take advantage of the next coin. Because of how rapidly this has all evolved, there will be far more access to trading than there was in last year. Key phrase is will be. There is wide scale crack down on ICOs and exchanges, and it just looks like there is a lot of short term buying controlling the market. That is not stuff I want to trade into.

If I had new money to invest, I would wait until Ethereum is above $1,000. Confidence in Ethereum through price is confidence in DAPPs and smart contracts, and that is all I believe in. I don’t want to decipher technology differences between currencies. I want to see actual commerce taking place on the respective networks. Ethereum’s commerce community led me to one of it’s children, EOS. This is a special, special project. It has a $9 figure partnership with Galaxy Capital, run by Former Equity Hedge Fund Manager Mike Novogratz. Their ERC-20 ICO record of over $1 billion is mind-boggling. There clearly is something more robust about EOS than existing currencies.

Background

EOS is the project of a blockchain advocacy company called Block.one, which is headed by CTO Dan Larimer, who worked on projects such a Bitshares and Steem. The purpose of EOS coin was to crowd fund EOS.io, which is a software toolkit that regular people can use to make DAPPs and smart contracts in an easily consumable web-based format. Because blockchain is still very new, EOS’ software would be able to “functionize” blockchain like Windows did with the computer. It provides an interface and a simple way to take advantage of the technology.

I hate to mention Crypto Kitties, but Ethereum has crashed due to upticks in volume on their DAPPs. EOS.io can support large amounts of data transfer through parallel chaining, and is designed to look like a website interface. With many coins, society is going to have to move forward before their adoption. XRP is an excellent case. We see XCurrent (no XRP use) gaining traction, but XRapid (XRP use) is still lagging. It will take time to move the largest institutions in the world toward cryptocurrency solutions. This software application already has a very strong GitHub and development community, and that is their target market; not centuries-old institutions.

Team/Following

Dan Larimer-:The crypto community really likes this guy. Dan is the CTO of Block.one; he has expertise across many different blockchain projects, with all of them promoting decentralization. Steem, for example, is a content creation site that is stored on computers around the world through blockchain, rather than in a single server. His belief is that the decentralized nature of blockchain does not give power or wealth to any single party, as humanity has been vulnerable to fraud, greed,  and bias if power is given to individuals. Steem will never have an issue with censorship of authors, or a parent company wanting to take a share of their success on the network. The EOS.IO project made that structure into a pre-packed software product.

Notable Technology

The blockchain they are developing is not going to be related to their token on Ethereum. Dan Larimer himself said he will have nothing to do with Ethereum after June, when the software system is completed.

Mechanism Freeze 

This is a direct solution to the DAO issue with Ethereum. This allows the community to “freeze”, and fix issues, without disrupting any of the other running applications. There will no longer be a need for forking, which disrupts the entire community, as you saw with Ethereum/Ethereum Classic. This is important to me after all the drama we are saw with ZCL, and the impending Monero fork. Society won’t accept the answer of “Oh, we need to hard fork.” when they adopt blockchain. They will see the red on the screen, and sell. Freezing is a good and palatable solution to both developers and users.

Parrallel Chains

Running different chains in parallel, EOS’ beta is currently supporting 10,000-100,000 transactions per second, with 1 million in sight as more parallel chains are run. In other words, this can support large commercial smart contracts and decentralized applications. These applications can be web-based in manner, and there are no transactional fees. This allows developers to work within EOS without having to pay to contribute (Ethereum’s GAS is an example of payment for contribution). Incentives would be far higher on EOS than Ethereum – once the software launches, of course.

Interface

The application allows developers to create an environment exactly like a website, so that users will not even know they are using EOS.io blockchain software. The reason I think this is different than Ethereum is because of the software package. Just like Windows Office, the toolkit was designed for mass adoption and customization. That’s a better offering than Ethereum, which is offering a shaky transactional infrastructure and making you pay for GAS to run your business. Hell, there are two VCs below who will pay you to open up on EOS!

Partnerships

Galaxy Digital

This is a firm for cryptocurrencies. One of the most notable investments came recently, with Novogratz investing $325 million into a partnership with Block.one to provide a pool of funds to entice developers to create projects on EOS.io. This is an uncommon investment, as this fund will act as a perpetual incubator for new businesses on EOS exclusively.

Novogratz has a created his way to not miss any of the new developments within blockchain, and partner with a software he is confident in. That is a ton of money to sink into one non-proven project. He has clearly seen the value of it’s scalable and user-friendly applications, and is making his bet on the future. Note: He didn’t make this investment with Ethereum.

Tomorrow Blockchain 

This was the first VC to set up the structure with EOS to exclusively invest in projects developed off of EOS.io. This was a $50 million investment into the network, yet again, with no proven working product. By the looks of these two partnerships, there are some big players getting ready for large inflows of capital into EOS’ network.

Ecosystem

This is still a new project, with beta versions being launched before the full fledged release in June. The communities on Github and Telegram are some of the largest in cryptocurrency. The optimism is rooted in how the coin works. You control as much of the network operational bandwidth as proportional share of EOS tokens you have. This is enough of incentive for me as a coin holder. As the need for development power on EOS grows, the value of the coin will go up. There are buyers and sellers in this ecosystem.

Conclusion

I like it EOS, a lot. I didn’t expect to like it as much as I did, but this makes sense to me. EOS made sure that the token had value, as your voting and development power on the network is decided by how much you own. You don’t have to spend anything to be part of the community and contribute. There are also large investment companies that have staked their reputations on the strength of this company’s software offering to developers.

The biggest takeaway is that this coin is a developer’s coin. It wants to siphon the development power away from other networks through their offering. Not making developers pay to run their applications is a gigantic upper hand. I don’t develop, but I wouldn’t be interested in working on something that is making me pay tolls. This industry is so new that developer communities can shift toward what will reward them the most for their work. I would say that this offering is extremely competitive. The software is scaleable, no transaction fees, and no payment for working on it. I am looking forward to June.

 

This is not a recommendation to buy or sell cryptocurrencies. EOS does not have a working product, therefore this investment is impossible to quantify in terms of risk. Do your own research.

Featured image courtesy of Shutterstock.

 

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