What is Zilliqa (ZIL) and Should you invest?
Before going into my review of what Zilliqa (ZIL) is I would like to discuss with you a few key things that I look for when considering an investment. When searching for an investment that could potentially bring you 10-100x returns you need to do you due diligence and have a strategy in place. With that being said, I will only invest in blockchains or infrastructure projects for the most part because I have noticed through my analysis that they bring the highest returns on average. Not only do they give you the highest average returns, but they get dumped the least as opposed to Dapps. Sure, there are some great Dapps (decentralized apps) out there that have given investors some seriously impressive returns, but I tend to stay away from them unless it really catches my eye.
Some other key things to look for are:
- Does the project already have a working product?
- Does the project have a great team?
- How big is the community surrounding the project? (Twitter, Telegram, Reddit, etc)
- How much has the project's price increased since its ICO and since it was listed on exchanges?
- And finally, always BTFD! (that's "Buy the F***ing Dips" for those of you who don't know)
Now that we have our strategy in place let's take a closer look at what Zilliqa actually is. Below are some key metrics about ZIL at the time of writing:
market cap: unknown
circulating supply: unknown
total supply: 12,600,000,000
Zilliqa is a blockchain protocol designed for use by developers of Dapps. Zilliqa claims to be a next generation high throughput blockchain 3.0 platform. All this means is that Ziliqa was built to scale to thousands of transactions per second through the use of sharding, which we will discuss later on.
What Problem is Zilliqa looking to solve?
Existing cryptocurrencies/smart contract platforms suffer from scalability issues. What this means is that the number of transactions they are capable of processing per second is extremely limited. As you can imagine this would deter large companies like Facebook, for example, from utilizing the blockchain because they would require much faster transaction rates. Ethereum, for example, can only process about 10 transactions per second. So what can be done about this HUGE scalability issue?
Enter Zilliqa. Zilliqa claims to be able to reach transaction speeds in the thousands per second and will only continue to get faster as the network grows. At Ethereum’s current network size, Zilliqa claims it will be able to scale about a thousand times faster. They have built a blockchain protocol with the specific intention of fixing these scalability issues that current blockchains suffer from through the use of sharding.
But what is sharding?
In order to understand what sharding is we must first understand how blockchains like Ethereum work. Currently, all nodes in the Ethereum network store and process each and every transaction that takes place on the network. As you can imagine this is a huge problem because as the network grows each transaction will have to get validated by more and more nodes, thus increasing the time it takes for the transaction to be processed. This is exactly why large applications can not feasibly be hosted on the blockchain. This is also exactly why a stupid application like CryptoKitties was able to have daunting effects on the Ethereum network. They are just too large. Zilliqa aims to solve this scalability issue through sharding. Basically, sharding means to divide the mining network into smaller shards, each capable of processing transactions in parallel. Get it? Simply put, it is the use of a smaller subset of network nodes to validate every single transaction instead of waiting for every node in the network. This saves a bunch of time because as the network grows, it will not require every node to validate every single transaction. I believe this is a HUGE idea and Zilliqa are the first to market when it comes to sharding. Sharding is a new concept/protocol that many hope will revolutionize the industry and help to take it mainstream It must be noted that Ethereum and other blockchains have discussed the possibility of reengineering their blockchains to utilize sharding. However, Zilliqa is the first blockchain to actually implement it. Furthermore, they claim that while Ethereum and other blockchains may be able to implement sharding and thus increase their transaction rates, they will never be able to be as fast as Zilliqa because it was built from scratch with the specific intention of scalability.
Zilliqa Network:
There are two main entities of the Zilliqa network. Users and Miners.
- Users-external entity who uses the Zilliqa infrastructure to transfer funds and/or run smart contracts. Users pay for transaction processing or running smart contracts in the form of the ZIL token.
- Miners-nodes in network who run Zilliqa’s consensus protocol and get rewarded in ZIL for their service.
Should you invest?
I am not a financial advisor. Invest in ZIL at your own risk and not without DYOR. With that being said I think ZIL is a HUGE idea and is trying to solve a MAJOR problem that current blockchains suffer from today. I believe as a first mover in the sharding arena they have a very big advantage. However, at the time of writing this article I believe ZIL is overpriced. It is currently sitting at $.08 down from its initial listing of around $.13. Currently Zil is already up almost 22x its ICO price $.0038. To me this is alarming. However, Zilliqa does have a working product which is something I’d like to see. But, it should be noted that the mainnet release is not scheduled for Q2 of 2018, some months away. This is another reason I believe ZIL to be overpriced at the moment. After some thorough research of the team I am neither impressed nor alarmed. Many of the team member seem to be members of academia and don’t have much work experiences with any major tech companies or things of that nature. However, the advisors on Zilliqa really do stand out as two of them were advisors on the Kyber project. Zilliqa is fresh out of the gates having been first listed on exchanges on the 25th of January. I do believe that Zilliqa could have a strong future especially considering it is targeting asian markets. But, because I believe ZIL is overpriced, the mainnet launch is a few months away, and the team isn’t as strong as I would like to see; I will not consider investing in Zilliqa unless the price drops below $.05.
Thank you for reading one of my very first articles on Steemit. I hope I did a good job informing and educating those of you not yet familiar with ZIL. If you liked this article please give me a follow! Again, I am not a financial advisor, just a crypto enthusiast who has made a bunch of money sitting in front of his computer! Thanks for the read, until next time.