An rational analysis on Electroneum
There has been an serious hype and missconception around electroneum. My aim is to open a rational debate about the project.
Disclamer
When I post trades I put my mouth were my money is. With icos I might not, so to clarify: I do hold a very small ammount of electroneum.
The information bellow does not reflect my opinion. These are the arguments they themselves give in their whitepaper, press, etc. My opinion will come after the debriefing, so feel free to search "MY TAKE".
STUPID/INSULTIVE/UNCONSTRUCTIVE COMMENTS WILL BE DOWNVOTED BY 30k SP. So please if you think what i am saying is stupid, be constructive and factual
Debriefing
According to their web:
Electroneum is a complementary currency that has been developed to allow anyone, regardless of technical ability, easy access to a cryptocurrency. Within a few minutes of installing the mobile app any user can see Electroneum being added to their wallet via the unique mobile mining experience.
Nearly all cryptocurrencies are “mined” withspecialist equipment. Electroneum can be obtained via the mobile mining experience on the app.
We’ve developed a fully functioning crypto coin with some very unique features. We’ve identified multiple enormous markets and we’ve created a free Apple and Android app that allows us to start penetrating those markets from day one after the token sale (31st October 2017).
- The project is a leap forwards in ease of use and accessibility;
- The availability of Electroneum opens doors for a market of 2 bilion smartphone users;
- Awesome team of developers and engineers with a proven track record of success;
- Two decimal points instead of 8 to make purchases closer to FIAT # value;
- Easier to mine;
- Ready to deploy;
Market use cases
The markets they strive to reach are gaming and gambling.
Gaming
Their idea is to use Electroneum as a means of value transfer between games.
EX: you have 10 Electroneum in a MMORPG and you could withdraw it to move it to another game when you quit playing that one for example.
Gambling
The argument is that you need a bank account to deposit onto a casino platform or to buy bitcoins, and Electroneum would make it easy and instantaneous.
Why would someone invest in Electroneum?
Blockchain technologies and cryptocurrencies are disruptive and are growing at an exponential rate (https://www.technologyreview.com/s/607947/the-cryptocurrency-market-isgrowing-exponentially/).
We believe that Electroneum as a new, easy to access cryptocurrency, will appeal to regular people in larger numbers than we’ve seen with existing cryptocurrencies such as Bitcoin and Ethereum. As such, we think that Electroneum will have great appeal for:
- Long-term investors. Those who wish to buy and hold Electroneum for its future value
- Digital coin speculators. Those looking to acquire Electroneum coins and sell them to other investors and speculators to generate short term gains
Mining
Mining Electroneum coins from your phone Installing the free Electroneum app (Apple or Android) immediately gives the user the ability to start gaining Electroneum in their wallet. All the time the app is live (even in background mode) it will be running the unique app based crypto mining experience, which requires ZERO technical knowledge.
Roadmap
My take on Electroneum
So, have you guys heard of Electroneum? Who hasn't...
I will try to be blunt in order to be brief.
Marketing
I was going to leave this one for last, but unfortunatly I have to drop the golden egg here. I will directly call this ICO a pyramid scheme. why? let's get into it...
**I am not saying that it is an all out fraud.**
The whitepaper is supposed to be a technical professionally written take on on everything related to the project. This is not even close.
Every single sentence of the whitepaper is emotionally manipulative and misleading. for example. when it suits their argument to validate future Electroneum value, they use the market as a whole (to witch BTC is 50%). But then give a list (written in a manipulative, borderline to a lie with unproven facts) on how crypto is manipulated and controled by a few, etc and how electroneum will fix that.
- Their refferal program is in a shape of a pyramid;
- People can, and did buy 100+ BTC of it.
to me this seems way more manipulated as early adopters got the diamonds. the early adopters of bitcoin were taking way higher risks when they adopted it. they risked losing everything they invested from night to day. Had to live the days where BTC was trully volatile, etc. again missleading and borderline to a lie.
- The referall program was designed to compel people into investing, and it is a good strategy. Electroneum took it a step further by giving a stupidly high base price to electroneum and then saying its on 40% discount. In my city I see retailers raise prices a week before having sales, witch put the price exactly were it was. Do you see any similarity? this started the hype. not the solidity of the project.
I will stop here, you get the picture. Everything is written in an emotionally manipulative way, the majority is borderline to a lie and when it suits them, take things out of context as if it would validate their point EX: They validate Electroneums future high price (not directly, but it's the only thing that your brain will form in the mist of so carefull wording) with the cryptosphere in general rising exponentially each year.
Luxury car prices are rising a ton. that means the economic cars will too. see the manipulation there? of course this example looks idiotic as it has no logic... same applies on their take.
They created 2 documents explaining Electroneum and called both a whitepaper. To me they wrote an whitepaper and an article of opinion. But nonetheless, an whitepaper IS TECHNICAL....
What current problems does Electroneum solve
Altough the team insists that the project is dearly needed, I disagree.
(Unless I missed something in the 10h+ I've been researching it in depth. it is possible as I am so tired of reading how great Electroneum will be)
Access & ease of use:
- There are already projects, with excellent teams and more than enough funding, working and coming to solutions on this matter.
The argument they use about the 2 bilion smartphone users:
- The way it is written implies that Electroneum is the only/best factual means for smartphone users to enter the cryptosphere. This is emotionally manipulative and borderline to a lie. I don't like beeing manipulated nor lied to. how about you guys?
- As far as I know there are pretty uncomplicated mobile wallets already.
Two decimal points will make it easier and inspire greater adoption as prices will be closer to FIAT value:
- LIE. How? do they know the future value of electroneum? If im paying 20.000 electroneum for a cofee it doesnt seem at all close to 1€.
Easier to mine:
- The only way to make it easier to mine is by making it less efficient, because of GUI, etc. (someone please correct me on this). Mining is not a hobby anymore, it is serious business with insanely large investments, logistics and maintnence costs.
- How can you have a blockchain wich is less efficiently mantained but better/equal to the others?
Ready to deploy:
- The only plus side I see, tough beeing ready to deploy doesn't mean it is completly developed/bug free/smooth to use
Niches filled by Electroneum
Gaming:
They would bring profit for the gaming companies for exchange of their ingame-currency for money:
- The whole reason there is a blackmarket on this is because 99% of the games don't allow it as it would ruin the entire game experience and make it solely a pay to win game. this applies to every game with an ingame-currency.
- You could say "but better that way as we would have no black market". WRONG The blackmarket will always exist (and with similar volume) because the blackmarket will be cheaper.
It will make ingame/app purchases much easier:
- Why will I buy Electroneum if I can pay directly from my mobile balance with no fee to me?
Gambling:
according to them it is a fuss needing to confirm your identity to pay with bank account, etc.
- If the casino is legal you will need to confirm your identity! gambling laws! Has Electroneums team heard about it?
Access to the unbanked and serving as bank to third world country users:
I searched this for too long and had to come to the conclusion that the information does not exist. but I'll make it up anyways. xD
Banking the unbanked... that seems familiar... I'm not even going there.
How will people buy Electroneum then if they have no bank?
- Mobile micro transfers;
- They setup shop in those countries;
- pre-paid services;
All of this I can already do. They call this innovation but actually give none on this(LIE). and all of these have very high fees ESPECIALLY IN THIRD WORLD COUNTRIES.
Banking envolves much more than storing money somewhere and being able to use it. so, more manipulation borderline to a lie.
Incentives to investors
Now, on this part they used the expression "we believe" or else they would be saying that they know what 2 Bilion people will do. And I would fly straight to England file a legal suit and get rich out of the 30M+ they gathered to "develop" a product they say it's already ready to deploy (you deploy something finished. you alpha/beta something that isn't).
They say it will have higher appeal than bitcoin or ethereum, meaning it would be a good long-term investment.
They say it will be good for speculators (they mean traders but that word would seem too top notch and that might scare the commoner).
I can't see any VALID reason for someone to preffer Electroneum to Ethereum as an investment. I mean smart contracts are one of the BIG things about the blockchain. what are they offering me that surpasses that as an investor/speculator?
If it is good for speculators means it has high volatility, but they forgot that part, since they were advertising to the common and uneducated people. High volatility = unstable coin/ecossystem = NOT REALLY A GOOD STORE OF VALUE!
The team
They left out a part of the team. The psychologists that reviewed the texts and made them into brainwashing and emotionally manipulative content. Hey, I think of myself as a very rational person and they almost got me thinking that it is already top 5 coin.
The problem I see with their team is the crucial part of the team. They threw so much money into the team but then the developers, the ones that actually have to create what they are advertising are not "awsome" as they put it. They are too few and mediocre at best if the project is to reach the heights they promise. But again, the project wan't targetting the knowlageable...
Mobile mining
(Supposedly, desktop mining was made easier. I covered this above)
This is what really concerns me about the project, the reason why it will eventually fail.
- Cryptocurrency mining:
So, the blockchain acts as a ledger that is immutable. The transactions recorded in a block must be witnessed by a group of connected computers. These computers must then prove they did the hard work to record the transactions. This is called a proof-of-work. The proof-of-work is really hard to get. It involves solving complex mathematical riddles that require quintillions of moves to resolve. Once a group of computers proves it has approved the transaction and provides the proof-of-work, they are paid for their efforts in Bitcoin. So, bitcoins are “created” mathematically as a result of computational effort.
ELECTRONEUM WILL NOT MINE, WILL NOT EMULATE MINING AND WILL NOT CREATE A MINING EXPERIENCE (only on uneducated peoples minds).
Why? you read it above. the mobile GAME will do nothing in the blockchain. Technically it will create coins out of thin air. yes you heard me right.... have the game open X time get Y coins. and again they use an expression that legally wont bind them. but what they are actually saying to the commoner is: "MINE ELECTRONEUM ON YOUR MOBILE FOR INSANELY HIGH RETURNS".
Let's analyze this situation
So, I am mining ELC on my computer. spend money on CPUs, alot of power etc to mantain the blockchain. why? I will buy the maximum ammount of smartphones and get a much higher ROI qo.Op
What benefit will a miner have? none... the only ones that will mine it (unless hype continues for long months) are the uneducated that read that it's super easy and super profitable with ELC.
What worries me the most about this coin is that it seems they forgot the Economics in currency. One cannot create value out of thin air. It simply does not happend. What is worse you cannot punish the ones that are working, creating value and expect them to continue mantaining it.
The entry into circulation of "free money" will firstly provoke the mass adoption they were advertising. Eveyone is into free money, that is the premise of every scam we see on the facebook groups (not calling it a scam). They were very smart. everyone will want some free 20-30$ a month. initially hundreds of thousands of people will buy more phones to do it.
But that has nothing good:
People will play the game for the money, not the coins, thus we will always have a steady sell volume;
Coins are awarded by number of devices playing the game. the specs are not important (or the values would greatly vary) thus making it actually ridiculous. (here I must be missing something)
And when I hack the app into thinking I have a quantum mobile phone? I mean... there is no work done, only packets of data with device specs and time playing. then what?
I want to be watching when people reallize they are not actually mining anything. I mean... when the miners do...
They promise fixed $ value. that can only mean 2 things:
- The ammount entering circulation will rise depending on the number of people playing the game;
- They outright lied to us again.
Now, assuming the ammount of coins entering circulation varies then they are right about it being good to trade, as volatility will follow deppending on # entering each day/week/month, but I don't see how that would make it a good store of value nor a good longterm investment and even less as a bank for my savings.
It gets even more worse
They plan to attract everyone of the unbanked on the premise of free money. lets make some math
If 300 (Afirca only) million people join they will be offering around $7.500.000.000 USD worth of electroneum with the game. you think the market cap will rise 7.500 Million every month? NO, it will dilute the current value.
if 2.2B mobiles join?
The transactions on the blockchain will be unlinkable, that means no transparency, witch is the premise to implementing anything to do with banking and blockchain toghether.
Having a protocol in place that allows you to earn free (and varying) ammounts of money added to the fact that every transaction is private allows the developers to hack/trick their own system into giving coins to X adresses as if they were playing the game.
This means they can, if they wan't to, simply print electroneum into their own wallets as if they were playing the game in as many phones as they want. And we all know greed moves the world, so I wouldn't be surprised if they already had this in the original plan. And you will say "but everything is open source", yeah, and the apps? qo.Op I didn't find the source code.
(I will probably be adding more info later, as I get deeper)
Conclusion
Pros:
- Electroneum is an ICO brilliantly marketed;
- Highly hyped;
- MIGHT help adoption of cryptocurrency;
- Has unlinkable transactions;
Cons:
- Have no problem lying/missleading their investors;
- They have proven themselves to be highly manipulative;
- Strives to create value out of thin air;
- Targets niches where better projects exist;
- Tries to create a perception that it will be bigger than ethereum/BTC;
- Uses the worst cryptocurrency (technologically speaking) as example to validate how good their project is;
- When it goes live it will already have 25% of total CAP in circulation;
- Technical whitepaper (the thing that they should call whitepaper) is a 3 page joke;
- Found nothing on the visibility of balances;
- Don't even mention fees;
- Don't mention HOW they will enable the unbanked to access it;
- Have no problem lying/missleading their investors;
- Have no problem lying/missleading their investors;
- Have no problem lying/missleading their investors;
- Have no problem lying/missleading their investors;
- Have no problem lying/missleading their investors;
I will stress this again
- Have no problem lying/missleading their investors;
- Have no problem lying/missleading their investors;
- Have no problem lying/missleading their investors;
- Have no problem lying/missleading their investors;
- Have no problem lying/missleading their investors;
I invested in this ICO solely on 2 premises:
I got very cheap price in relation to the rest (it is an expensive ico);
It will take at least months untill people start reallizing the major flaws of the project and then it still has to transcend to the general public witch also takes time;
Price prediction
Altough I found more price predictions than analysis. we cannot predict the price. Anyone that is trying to predict the price of ELC either has no clue what he is saying or is making a wild guess.
Even so, since the project is seen as the future of everything blockchain related (joke), the hype will probably continue onto the exchanges, or else I wouldn't touch it with a 10 foot pole.
I will initially mine it on my desktop and every smartphone i can get my hands on.
I will not sell the token the instant it lands, I preffer to risk it because the risk reward ratio is just to high to simply dump
Should you still buy it?
please don't if you value your money. My take on this is a guess. just a risk reward ratio formulated upon logic and no technical analysis.
With all this information I decided to name Electroneum as
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THE FIDGET SPINNER OF CRYPTO
entertaining, appealling and funny to play with, but useless.
"What is unsustainable will not be sustained"
Herbert Stein
¿What do you think?
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