After the much anticipated launch of Block.one’s EOS mainnet and very successful ICO raise ($4B), let’s take a minute to look over a few things and see how this fared. In the early hours of Saturday when EOS mainnet was due to be released, we saw the price hovering at around the £9 mark which lead the community to think that its price might remain the same, or worse drop (particularly given past ICO launches mainly having a negative impact on price.) With this in mind, the crypto kids, analysts, traders and whales were all glued to their screens and phones!
By 9pm we saw highs of £11.60, making this a price increase of 22% in less than a day. The price has subsequently dropped and is back towards the £10 mark. My guess is that people will be tested to see how well the market has responded and I would not be surprised to see the price drop further to where it was before the launch back at around £9, mainly because it’s still not clear whether EOS’s blockchain works, how many people have forgotten to register their tokens, are the nodes hackable etc.
Even though the community is very excited about the team and project, this is still a very raw product with software always needing to be programmed and bugs being fixed and patched, however this is “day one” so it’s best not to jump to any conclusions. After highs that have occurred throughout this year, we have seen 3 successive price drops and in this bear market I would be foolish not to predict one. The first drop , at £15.30 to £11.65 (24% decrease). The second drop, at £13 to £9.60 (26% decrease). The third drop at £10.36 to £7.82 (25% decrease). Leading me to believe that after this recent high there should be at least a 20% decrease in price from £11.60.
In other news, the proposed state crypto Estcoin announced by the government of Estonia has been cancelled. Estcoin was to be a crypto pegged to the € and would be used as the national currency of Estonia. This was an extremely ambitious project and one that had many people in the community excited. When the project was put forward it was expected that this would be the first state issued cryptocurrency, a title that has since been taken by Venezuela’s PetroCoin.
The issue that Estonia faced, is that, countries in the EU using the € must abide by the ECB’s rules and regulations, with one of them being the fact that you must use the € as your national currency. What Estonia proposed essentially was illegal and had ECB President Mario Draghi up in arms. On the up side, this has encouraged the idea as to how a national crypto pegged to the € would work. They are still using the Estcoin but will be more of a private blockchain used in their e-residency programme.
And lastly, the case towards decentralisation took another turn when Visa had to announce that its service in Europe had been disrupted resulting in thousands of customers unable to make payments. Visa’s service is centralised and processes millions of transactions every day, and as its network runs on private servers it leaves the potential for further error, i.e. should there be a problem in one of its servers, the network associated to it goes down.
If we directly compare this to Bitcoin which is a decentralised network which runs on nodes all over the world, should one node go down this would not a have a severe effect at all on the running of it. As well as people continuously adding to the network, meaning the network is getting bigger and bigger, its protocol is secured using cryptography, leaving it almost insusceptible to hacks and has only ever gone down once (which wasn’t as a result of nefarious activity). With the implementation of the lightning network into Bitcoins network protocol, we could see Bitcoin competing with the kind of transaction speeds Visa offers in the not too distant future.
Have a great week.