EOS: Analyzing The Data Or Just Grasping At Straws?
You know this has been an awful year when you make up a list of the 10 best performing cryptocurrencies. Based on an article published by Bitcoin.com, the victory goes to Bitcoin, down about 52%. And this is the best performer. Other, less fortunates like Ripple (XRP) and Cardano (ADA) have fallen about 85% since New Year’s Eve.
At this point it would be easy to slip into the question: when will the crypto carnage end? Unfortunately, all efforts to figure out the answer to that question have been a waste of time, not to mention an utter embarrassment. Prices that seemed like bargains at the end of the first half of this year have continued to tumble without regard to the opinion of Charles Lee or dozens of other crypto evangelists.
At this point, the futility of fundamental analysis should be apparent. Someday, hopefully in the not too distant future, investors will come to agree on a set of metrics to value Bitcoin or ICOs like Hexxcoin (HEXX) but for now we must leave the task to the field of behavioral finance: a.k.a. Mob Psychology.
If you are like me, a believer in the long term positive outlook for blockchain technology and the opportunities for cryptocurrencies, trying to out guess the mob is not a great reason to be investing in this asset class.
What About EOS
With no disrespect to the fine folks at Bitcoin.com, other than appearing in a chart, there was no mention in their analysis of the name EOS. I am sure there was a reason for this. Maybe it was accidental but the pricing of EOS has contradicted the trend of most other cryptos.
So we went to CoinMarketCap and did some of our own pricing. As it turns out Bitcoin did not take the honors as the best performing major crypto so far this year. Those honors belong to the diligent developers at EOS. In the first half of 2018, EOS price fell from $8.80 to $8.06, a drop of merely 8.4%. That was so surprising that we went back and double checked the CoinMarketCap numbers. Sure enough, those numbers checked out.
Now, nobody is really cheering for a loser like EOS just because it won the most outstanding loser contest. And in fairness to all sides, July and August have not been kind. So if you bought EOS on January 1 you would have lost 30% as of the time of this writing. The fact that you lost less than others is little consolation.
It Is All Relative
One of the most important investment measurements I have long believed in is relative value. When you go to buy hamburger meat at the grocery storeand one package is marked at 1lb:12ozs for $4.53 and the next is marked 1lb:04ozs for $4.53, the choice is simple. With investments especially like crypto it is a whole lot more complicated. So the performance of EOS during this period could be a pure aberration, or something to put in some research time to decide if EOS merits putting some of your money into.
EOS: A Brief Look
For some time now EOS has gone by the moniker, the Ethereum Killer. This is mostly because it is a platform providing decentralized application hosting with smart contract capability. Sound like Ethereum? The difference is the EOS offers decentralized storage solutions that overcome one of Ethereum’s biggest current limitations: scalability.
Yes, we haven’t forgotten that ETH has a few cards up it’s sleeve. A new test network was launched for Raiden, the ethereum payments channel project. This is expected to be the final step before full scale implementation. And then there is the much talked about sharding to accommodate small off chain P2P transactions. But technologically speaking, EOS may have come up with a better mousetrap.
One big thing is EOS reliance on a more efficient Proof-of-Stake process for confirming blockchain transactions. This is faster and far less energy intensive. Will this check all the boxes when it comes to security: stay tuned.
EOS is far from perfect. It has had its share of negative news like the so called stop and go launch of the platform, numerous accounts that were locked and there is no system in place to vote on a constitutional change. In the long run, with technology changing rapidly, this is not a good thing. But with all the bad news, EOS price performance is even more surprising.
Full disclosure: I do not own any EOS but I do own a small amount of ETH that seems to get smaller everyday. Secretly, I hope that EOS does something stupid because, right now, EOS has the upper hand in their platform architecture. ETH has the bigger piece of the network pie but unless ETH makes real progress in scaling, their dominance isn’t going to last forever.
BTW: Under the category of provocative business plan, earlier in this article we mentioned Hexxcoin (HEXX). The cheese in Hexxcoin’s mousetrap is the ability to convert any crypto into an anonymous ZeroCoin thus maintaining the privacy of crypto owner that has been subject to KYC and AML regulations.
Featured image courtesy of Shutterstock.