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ICO Analysis: Hero

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The current state of cryptocurrency gambling is not yet the best it could be. While we have the option to bet sports at the likes of CloudBet and others, or to provably fairly roll dice at PrimeDice and others, what we don’t have is enough ways to bet against each other. For most people, the concept of sports betting doesn’t extend beyond betting with each other. This is the concept behind Hero, which wants to enable people to, in a decentralized manner, bet with each other on sporting events. That’s how simple it is at the base layer, but there are a few things yet to go over.

A high amount of untrustworthy and off-shore providers has lowered the trust of people in the current betting market. It is never completely guaranteed that users receive their winnings. All these problems have one common ground—centralization. Centralized systems create excessive risks for users like exploitation of user data, prohibitive legal regulations, vulnerability to manipulation and denial of withdrawals. That is where the blockchain and the HERO coin (‘HERO’) come into play. […] The smart contracts of HERO are designed to not only enable decentralized betting, but to manage whole contests without a middleman. With HERO, there is no need of bookmakers anymore.

It may still be hard to see what they’re talking about. Basically, Hero is going to be a platform that allows people to make fair bets between each other, with no brokers or bookmakers.

What if the community becomes the middleman? […] Here‘s where the blockchain technology comes in place. The HERO Network allows peer-2-peer predictions of the outcome of games to take place independent of middlemen, such as bookkeepers or betting providers. The system relies on an innovative pooling system that makes it possible for players to challenge their friends or the community directly instead of using the services of bookmakers. The objective is to revolutionize the monotonous betting market and to bring back the lost social thought of betting.

Elsewhere in this paper, Hero claim that the system of online gambling hasn’t changed for 15 years. Now, in general, it can be assumed that many things do not change because they simply work. Indoor plumbing, for instance, hasn’t had to improve very much at the base of it. Similarly, one really has to ask: is the current online gambling and bookie system not working? Well, perhaps that’s not truly relevant. Perhaps the question we actually want to ask is: will enough people be willing to try this alternative method?

Enter the Herosphere, which is briefly mentioned elsewhere in the paper, and is an existing community of 200,00 people. In a moment we’ll discuss more about it, but the bottom line is if this community is immediately converted to the token, and they have to buy more of them to place more bets, then it would seem that the token will have a demand out of the gate. This is a positive sign, to say the least, but we’ll have to continue looking here before we can decide if we feel positively or not.

The above being said, what we conclude, really, is that what we’re dealing with is in fact a situation wherein anyone can participate, and the network becomes the bookie. Anyone can offer bets, however. They give the example of a Twitch streamer who might incentivize the audience and be compensated through the network for offering a contest amongst them.

Herosphere

The HERO Network will first be implemented and tested on the Developer‘s own esports platform herosphere.gg where HERO will be exposed to an existing user base of over 200,000 active players.

While it is not made totally clear if the issue will be forced, one thing that is made clear is that every contest will pay 1% of its proceeds to the network as a whole. This is an interesting scheme which may encourage people to hold the token. If that becomes the case, demand for it will only increase, and ability to meet that demand will decline, as holders just continue to collect their rewards.

If this were to happen and a significant number of coins were kept off market, the price would probably increase just by natural market economics. That would be an interesting way to increase the value of a coin, so it will be a good experiment to watch. In any case, the prospect of a dividend on the token is probably a plus for most long-term investors, but short-term investors won’t be in it long enough to care about that part of it. Nevertheless, as previously described, this coin might see solid gains as a result of people trying to hold it for the dividend.

We know that Hero’s team have successfully run their company at Herosphere.gg since 2014. We see no reason they won’t be able to handle the actual implementation of the software. Instead, we’ll focus our attention on the project itself, in this case.

Hero Token

As stated, all token holders will receive a 1% rake back of everything done on the network. This will incentivize at least a small population of investors to hold long-term, stacking up these gains and riding the charts.

We know that 600 million tokens will be issued, but 2 billion will exist in sum total, which is quite a few, but if enough betting activity takes place on the network, then it won’t actually matter how many coins are out there. Additionally, if a lot of coins are held off the market, then the demand for those that are on the market will float the price a bit higher, at least. Tokens will be around 2 and a half cents at opening, giving room for growth. However, with 2 billion coins in the wind, if the price hits 10 cents, you’re talking about a $200 million market cap. If the price hits $20, you’re talking about many billions. So it’s unlikely that we’ll see an extreme upward valuation, but there will definitely be enough play that you can make something.

Distribution

Only 600 million coins are coming out in the crowd sale. The rest will be held back. They give their various explanations, but this is just absurd. The ICO firms that are coming out are increasingly thinking this is just the time to grab free money. We can’t abide these distribution schemes. If there are going to be 2 billion coins in total, then all of them should be available for sale immediately. It doesn’t matter if that lowers the price, or if the target raise is only several million dollars. The coins should be available to the public, since you’re taking the funds that you get from selling the tokens and using those funds, by keeping the tokens as well, you double dip. By keeping that many tokens, you deeply double-dip.

The Verdict

We definitely don’t like the distribution on this one, despite the following explanation:

A total amount of 2 billion HERO will be created by the Developer. The Developer intends to exchange only 600 million HERO (or 30 percent of the Total Coin Amount) in this Initial Coin Offer for Ether. The remaining 1.4 billion HERO (or 70 percent of the Total Coin Amount) will be used for other purposes. The Developer explicitly reserves the right to exchange the retained portion of 1.4 billion HERO for other virtual currencies or sell it for Euro or any other fiat currency at a later point in time at any marketable price. However, the Developer will commit itself to adhere to the following restrictions in the use, exchange or selling of HERO on the market. Especially, the Developer will commit itself to only exchange or sell such amounts of HERO that, to the best knowledge of the Developer, would not have a visible impact on the market value of HERO.

So, overall, we probably wouldn’t get involved. Although there is a nice dividend, overall, there are problems we’d rather not get involved with – like the above.

Risk

  • Too many coins means that the 1% dividends split amongst all coins is a lot less money. -1
  • Moreover, since 1.4 billion of the 2 billion coins belong to the “Developer,” most token holders wouldn’t get much of the proceeds anyway. -1
  • There’s a risk that people may be comfortable where they are in terms of betting. -1

Growth Potential

  • Gambling is big money. +4
  • The established community is a positive. +2
  • We think this thing will work, the token will just always have a low value. +1

Disposition

We arrive at a 4, or less than thrilled, on Hero.

Investment Details

To get a piece of the 600 million coins being offered for sale, visit Herocoin.io on September 14, 2017 14:00 UTC.

Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

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5 stars on average, based on 2 rated postsP. H. Madore has covered the cryptocurrency beat over the course of hundreds of articles for Hacked's sister site, CryptoCoinsNews, as well as some of her competitors. He is a major contributing developer to the Woodcoin project, and has made technical contributions on a number of other cryptocurrency projects. In spare time, he recently began a more personalized, weekly newsletter at http://ico.phm.link




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  1. beaupain

    September 8, 2017 at 1:51 pm

    Thanks for the detailed en clear analysis!

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Analysis

Crypto Update: Bitcoin Blows Through $7000 but Altcoins Still Lag Behind

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The relief rally in the cryptocurrency segment continued in earnest today, as Bitcoin still lead the way higher posting its best daily performance since April. The most valuable coin stole the show, although the whole market blasted higher, with the total value of the coins getting close to $300 billion, up by around 20% in a matter of days.

While the segment is still not out of the woods, BTC triggered a short-term buy signal in our trend model, as it overcame major resistance levels for the first time since May, finally showing some technical progress. That said, most of the majors are still stuck in, or right at the top of their trading ranges, and besides Bitcoin, buy signals are few and far between even considering the smaller coins, as correlations are still very high.

Trading volumes were also the highest in months, as especially Bitcoin triggered automatic orders while surging through several strong resistance levels. Bulls would still need further coins to join the break-out and fro now the long-term setup is still just little changed.

BTC/USD, 4-Hour Chart Analysis

BTC cleared the $6750, $7000, and $7350 levels in a bit more than an hour, and the epic short squeeze settled down near the latter resistance, for now. The coin is now on a short-term buy signal, and should a higher low form in the coming days, a new short-term uptrend could be established.

The coin needs to stay above the $7000 level to keep the signal intact, and given the relative weakness in Altcoins, the long-term outlook is still mixed. Resistance is now ahead between $7650 and $7800, while further support is at $6500.

Ethereum at $500 as Ripple Tests $0.51

ETH/USD, 4-Hour Chart Analysis

While Bitcoin is already above primary resistance, Ethereum is trading right at the $500 level, leaving the short-term trading range intact. The coin is close to triggering a buy signal, but it remains relatively weak and traders should wait for follow-through before playing a possible trend change. Primary support is still found at $450, with other levels at $420, $400, $380, and $360, while further resistance is ahead between $555 and $575.

XRP/USDT, 4-Hour Chart Analysis

With all of the majors registering large gains, and even some the recently weak coins like LTC, XRP, and Dash are trading near key resistance levels, further short-term buy signals could pop up in the segment, but until a confirmed new uptrend, traders should remain cautious with new positions.

As an example, Ripple is trading slightly above the $0.51 resistance currently, but a break-out is not yet confirmed, and the trading range remains dominant. Further resistance levels are ahead at 0.54 and $0.575, while support is now found at $0.49 and $0.45.

Featured image from Shutterstock

Disclaimer:  The analyst owns cryptocurrencies. He holds investment positions in the coins, but doesn’t engage in short-term or day-trading, nor does he hold short positions on any of the coins.

Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

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4.6 stars on average, based on 293 rated postsTrader and financial analyst, with 10 years of experience in the field. An expert in technical analysis and risk management, but also an avid practitioner of value investment and passive strategies, with a passion towards anything that is connected to the market.




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Analysis

Tesla: A Good Option to Invest

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By Dmitriy Gurkovskiy, Chief Analyst at RoboMarkets

Not so long ago, people only had landline phones that you couldn’t take anywhere, which now looks very inconvenient to modern people. Then, mobile phones appeared, and while you can take them anywhere, you must not forget to charge them regularly. However, charging your mobile has already become as usual as, for example, brushing your teeth.

When it comes to automobiles, modern fuel cars are like landline phones, as you can’t go anywhere without fueling them at a gas station, spending your time and money and planning your day depending on how much fuel you’ve got in your car tank. Electric cars are certainly cars of the future, and charging them would be something modern people are already much used to, as natural as fueling them now. It’s not the question of how much crude oil we still have on Earth; the point is that the progress is moving forward, and combustion engines, which are complex and expensive to maintain, will sooner or later become obsolete. Electric cars, where you don’t have to constantly watch how much engine oil or coolant remains inside, are about to replace the traditional fuel cars.

Tesla, a company founded in 2003, is by far the leader in electric cars production. One of its founders is the famous Elon Musk, an engineer and inventor.

Tesla presented its first electric car concept called Tesla Model S on March 26, 2009, in Hawthorne, CA. On June 22, 2012, after all R&D was completed, it was launched in the market and cost $112,000.

A few months later, the second prototype came in: this time, it was a crossover, Tesla Model X. According to Musk, Model X serial production would start in 2013, and the car would be available in late 2014. These plans proved to be too optimistic, though.

The supply start date was only announced in February 2014, but then postponed to Q2 and Q3 2015, and it fact the first supply was completed In September 2015. By the end of Q3, only 6 Model X cars were sold, each for $80,000.

In 2016, a new car, Tesla Model 3, was announced, and the sales were scheduled for the same year, but then the start date was postponed to 2017. The first Model 3 was actually sold in June 2017, at $35,000.

Since the first model sales start and up to now, the company has been unable to reach any net profit, with all earnings reports showing losses. The company was on the verge of bankruptcy as long ago as in 2008, and only a NASA contract saved it.

Perhaps the famous April 1 joke posted then by Musk was based on this very event.

However, it’s all quite different now.

Looking at the financial indicators of the company over the last 4 years, one can easily see where those losses come from. In 2014, Tesla invested $464M on R&D, while in 2015 they invested $717M, in 2016, $834M, and, finally, in 2017, the R&D cost Tesla $1.378B.

The losses were growing in proportion, but were cut in 2016 thanks to Model X sales. In 2018, the same may occur, as Model 3 is going to be quite popular, so the company may even start receiving profits.

Before 2015, the revenue came from a single model, which was Model S. In 2015, 50,446 cars were sold, with the total gross income of $5.649B.

In 2016, they started to sell Model X, which boosted the total year revenue to $7.728B.

If the company did not invest so much into R&D, perhaps, Tesla Inc. reports would now look far better than they are, but this would not last long, as the competition is also doing something.

When Model S sales started, it cost $112,000, while the average US citizen monthly income was $4,121. While not everyone could afford such a car, the sales went on rising, as Model S targeted mostly the luxury segment.

The next model cost $30,000 less, but was still inaccessible for an average consumer. This is why Tesla decided to release Model 3 at $35,000, much cheaper than the previous models. However, a bad surprise was expecting the company afterwards.

When Model 3 was presented, people could start applying for it with a deposit of just $1,000. By the end of the day, there were already 180,000 applications; three days later, the number already reached 272,000, and by May 2016, it went on rising to reach 373,000.

However, this only led to more expenses, as the company had to upgrade its production infrastructure in order to meet all those applications (the number of those exceeded the total number of cars sold since start).

When Tesla allowed its customers to apply for the new model, its production capacity was just 120 cars per week, while in order to meet all the needs Tesla had to boost it by 60 times, to 7,200 per week. Elon Musk is a go-getter, but this was crazy even for him.

Both investors and customers are already used to Musk not fulfilling his promises on time; this already happened with both Model S and Model X, where the supply date was postponed multiple times. It has not changed much now. By the end of Q1, Musk promised to reach 2,500 cars per week, but in fact was only able to boost it to 1,987. After breaking this promise, Musk said he was going to get 5,000 Model 3 cars per week by the end of Q2, and, curiously enough, this target was reached, according to the report as of July 2.

This news made the stock price go up, but right at the end of the trading session it was again down by 2.3%, as many investors just did not believe the report was true.

With the past experience of Musk’s promises being quite negative, Bloomberg developed an online tool where everyone can track the Model 3 production process by VIN. The news agency sends a request to the National Highway Traffic Safety Administration (NHTSA) website which sends a response on the number of VIN’s registered for Model 3.

However, car manufacturers usually register VIN’s for the whole batch, so the values Bloomberg gets may be a bit higher than they in fact are. Still, according to these stats, the company reached 4,395 cars per week by July 2.

So, in fact, Musk did not fulfill his promise again, and the market reaction was of course negative. However, the key point here is not fulfilling promises but the overall progress that was made over such a short period of time. Just 6 months ago, Tesla produced around 200 Model 3 cars per week, while now this figure is over 4,000. Tesla market cap is already higher than the one of Ford Motor Company and nearly in line with that of General Motors, while those too have over 100 years of experience in car production and sales.

If Tesla is able to maintain the same progress as before, it will produce over 52,000 Model 3 cars by late Q3, which will lead to good Q3 and Q4 reports, while all negative effects of the trade war against China will be void.

Besides, if we also take Model S and Model X sales into account, chances for good reports get even higher.

Reaching 5,000 cars per week is a very difficult task: Tesla even had to place its new assembly line in a tent.

This GA4 (general assembly) allowed the company to boost the production by 20%, and it actually proved to be one of the key decisions.

Meanwhile, Musk says GA3 will be well enough to maintain the production capacity at 5,000 cars per week, while GA4 will help to reach the further target of 6,000 cars. With Tesla products being in demand, investors can be quite optimistic regarding the future of the company and invest more, although they do have some risks.

Tesla is now a leading electric cars producer with relatively accessible prices, but the competition are also looking towards electric car production, which may of course shrink the demand. Other risks include emergencies coming from the autopilot mode Tesla is quite fond of. There is no law regulating the driver responsibility in such cases yet, so the company has to face claims against itself, which lead to Tesla recommending using autopilot only as an additional feature that does not allow the driver to stop watching the road.

Doug Field, a talented engineer, leaving the company after working with it for 5 years is also an important negative factor. Elon Musk says this should not have any influence on the indicators coming in the following quarters, or on the new Tesla cars production.

Technically, there is a clear ascending trend on W1, with the price using the 200-day SMA as a support and constantly bouncing off it. The price has also managed to stay above $300, which may help it go further up, too.

There is no MACD divergence that could stop this growth for now.

Just like before, Tesla looks like a very good option for an investment. Elon Musk may set too ambitious goals, but he achieves them sooner or later. The demand for Model 3 still exceeds the production capacities, with over 400,000 cars pre-ordered, but this will also allow the company to develop new models. As such, the 40-ton truck, Tesla Semi, was already announced to the public in November 2017, and its serial production is scheduled for 2019.

According to some sources, there have already been 1,000 pre-orders, with the deposit increased from $5,000 to $20,000.

Thus, Tesla may become the first company to produce an electric truck in 2019.

 

Disclaimer

Any forecasts contained herein are based on the authors’ particular opinion. This analysis may not be treated as trading advice. RoboMarkets shall not be held liable for trading results based on recommendations and reviews contained herein.

Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

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4.6 stars on average, based on 4 rated postsHaving majored in both Social Psychology and Economics, Dmitry went on to continue his education in post graduate. He then worked as a team lead of a tech and fundamental analysis lab in the Applied System Analysis Research Institute. This helped him to acquire all necessary skills and experience to become a successful trader and analyst, as well as a portfolio manager in an investment company. Dmitry is a pro in the financial field who authors articles for various international media. He also holds the position of Chief Analyst at RoboForex.




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Analysis

Crypto Update: Technical Setup Unchanged Despite Encouraging Rally

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Cryptocurrency bulls could breathe a sigh of relief on Monday as the secular uptrend in the most valuable coin got saved yet again, as BTC rallied above $6500 for the first time in a week after a low-volume consolidation period just above the $6000 level. All of the majors joined the rally as correlations remain very high in the segment, and the market recovered 10% on average with the total market cap of the coins getting back to $275 billion.

Despite the rally, the top coins are still stuck under key resistance levels, as the recent swing highs are still above the current prices and from a short-term standpoint, the downtrend is still intact. Until a move above the crucial levels, traders should still stay away from opening new positions, as odds continue to favor another test of the June lows.

That said, given the still intact long-term bullish setups in the most important digital currencies and the very negative sentiment that developed thanks to the long declining trend, a short-term trend change could be ahead. A bullish leadership is still yet to form, although Bitcoin’s short-term relative strength is a positive sign.

BTC/USD, 4-Hour Chart Analysis

In BTC’s market, all eyes are once again on the $6750-$7000 zone that has capped the really attempts for a month now, and below that zone, the largest coin remains on a short-term sell signal. As the coin didn’t hit a lower low, a bullish pattern could form in the coming weeks, but until it remains in the current trading range, traders shouldn’t enter the market. Support above the long-term $5850 level is found at $6500, $6275, and $6000 while further resistance is ahead at $7350.

Altcoins Slightly Lagging Behind Amid Broad Rally

LTC/USD, 4-Hour Chart Analysis

The major altcoins are in very similar short-term technical setups, thanks to the strong correlation between the coins, and the most bearish coins, like Litecoin, NEO, Monero, and Dash are still below the key support levels that they violated in June. While the previous lows held up this weekend, investors should still remain defensive with regards to the relatively weak currencies.

LTC/USD, 4-Hour Chart Analysis

That still points to a dangerous long-term setup in the segment, and further technical progress is needed to switch the segment-wide trend. Ethereum remains below the key $500 level, although the coin managed to rally above the $475 level yet again, despite being relatively weak from a short-term perspective compared to BTC.

A rally above $500 would be a very positive short-term sign for ETH, and it could trigger a move to the $555-$575 zone. Primary support is at $450, with further levels at $420, $400, $380, and $360, and below $500 the short-term sell signal is intact.

Featured image from Shutterstock

Disclaimer:  The analyst owns cryptocurrencies. He holds investment positions in the coins, but doesn’t engage in short-term or day-trading, nor does he hold short positions on any of the coins.

Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

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4.6 stars on average, based on 293 rated postsTrader and financial analyst, with 10 years of experience in the field. An expert in technical analysis and risk management, but also an avid practitioner of value investment and passive strategies, with a passion towards anything that is connected to the market.




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