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ICO Analysis: Power Ledger

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Renewable energies are all the rage, for good reason. It is not hard to imagine dozens of companies, globally, prospering exponentially into the future as they deliver cost-effective platforms which enable people to buy and sell their power without going through the traditional power grid.

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There is an inconvenient truth facing the traditional energy supply industry: at some stage, it will be cheaper and more effective to self-supply than to rely on the network to provide low-cost and reliable and clean energy.

For those whom this statement is not true about, it will still be increasingly true over time that peer-to-peer markets offer much better prices for consumers. Ultimately legacy, vertically-integrated companies are embedded in the power grid, and so even if they begin to cede control to the decentralized and distributed networks of tomorrow, there will still be tolls and such owed to them. Disruption does not always mean the disrupted are without a parachute. According to a 2015 Deutche Bank study that Power Ledger notes in their whitepaper, in much of the developed world it is already the case that self-generated power is equal or less to the cost of delivered energy.

Brief Overview

In Power Ledger, we have a direct competitor to Suncontract. MyBit also has designs on this market, and others are sure to follow. They all are creating essentially the same product. Luckily for both of them, the budding market of “bi-directional energy flows” is large enough to sustain these two and many more to come. Their execution could be better than Suncontract, or not, and yet it could still turn out to be a prosperous endeavor. For those that have yet to investigate Suncontract or read our report on it, we’ll give here an overview of the concept:

As more and more people create their own energy, a growing class “prosumers” emerges. These are people who both buy and sell, based on their own lifestyle choices. An investment property owner might offset some of his costs by using huge portions of his rooftops for solar panels. More and more people will reach a point where it becomes cheaper for them to invest in the hardware to have their own solar operation, and doing so will create greater surpluses of energy. Currently when people do that, they do not have a great bargaining position – they can sell it for whatever the grid is willing to pay, or they can just not sell it. Power Ledger and similar plays aim to create marketplaces where people will be able to sell their energy to those who need it more – electric vehicle charging stations or even cryptocurrency miners might find particular use in such a market. To partake in said marketplaces, they’ll have to acquire the token of exchange in these markets, which is where the value of such tokens is derived – from the demand for such tokens.

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Trends Support Notion

While it’s true that home consumption from the grid proper will only continue to decline, studies of the energy industry have shown that current levels of production as well as delivery networks may likely not be adequate to keep up with demand brought on by increasing reliance on electricity as opposed to other forms of energy. People will be creating their own energy, and selling surpluses to industries which need ever more of it. Bloomberg says 7 trillion dollars will go into renewable energy over the next decades. The Energy Information Administration recently announced that renewable energy production has surpassed nuclear energy for the first time. According to Power Ledger, their idea is ironically a way to give the legacy energy industry a new lease on life. By becoming participants in decentralized, trustless marketplaces which happen to be centered on an industry with which they are deeply familiar, revenues for traditional power companies could actually increase.

What Makes Power Ledger Unique?

Power Ledger is already in operation. This is the first key piece of information. In 2016, they launched the first peer-to-peer energy trading platform in Australia. The platform works by allowing individual markets to exchange fiat currencies for Sparkz, which can be used to exchange for POWR tokens. POWR tokens are the base unit of the ecosystem, whereas Sparkz are earned and sold in practice by the energy producers and buyers. Earlier this year, they were able to get banks on board for this purpose. Also earlier this year, they were able to strike a deal with a large retailer in New Zealand to demonstrate the abilities of the Power Ledger platform. Since their first successful experiments, they’ve only increased the number of other companies interested in leveraging some aspect of the Power Ledger platform.

Power Ledger is maximizing use of decentralization. Rather than giving itself an endless mission of improving the ecosystem, Power Ledger would like to see applications developed on top of its, for lack of a better word, protocol. While they are developing applications in a number of categories themselves, others could develop competing efforts which made use of the system. Having a plug-in style base is better when trying to approach large, established companies about working with you – often enough, they might be willing to work with a new outfit if they believe they can be mostly autonomous. Therefore, being able to simply develop their own stuff on top of the API is better for all.

Notable Applications

Artificial intelligence and remotely deployed properties come to mind when thinking of increased energy demand moving into the future. One application that Power Ledger has in mind is what they call autonomous asset management. Imagine being able to deploy a vending machine virtually anywhere, not even having to include the cost of its energy use in agreements with property owners? Power Ledger can enable this by allowing your machines or a separate machine which could handle it for you, to purchase their own energy. This goes in tandem with several other unique visions of the future, including automatic restocking.

Most of the rest of its applications are more energy-industry facing, but consumer-facing applications usually follow industry-facing ones anyway. Having generated so much activity and buzz around their product already, and having a minimum viable product long before they’ve even bothered to ask us for any money, is a huge plus for Power Ledger.

Having already analyzed Suncontract, we have something to compare Power Ledger to. We will try not to focus too heavily on a competing effort, but inherently one has to be a better play than the others. Therefore there are two areas we will focus heavily on. One is the technical nature of their plan – is it more detailed than the very high-level offering of Suncontract? Secondly, the team. Is Power Ledger’s team more or less experienced and competent? These factors and others will determine what the safety of Power Ledger as opposed to Suncontract.

Ledger Assets

Last year, the same group of people propelled the Ledger Assets program forward. This is an ongoing proof-of-stake blockchain for Australian companies to settle transfers and manage assets. It made a lot of headlines.

Power Ledger Team

Co-founder and Chairperson Jemma Green has a keen awareness of the needs of 21st century power consumers. “Jemma is a research fellow at Curtin University Sustainability Policy (CUSP) Institute, whose doctoral research into “Citizen Utilities” has produced unique insights into the challenges and opportunities for the deployment of roof-top solar PV and battery storage within multi-unit developments and the application of the blockchain.” Her role is more in guidance of the company, having experience in risk management.

Day to day operations are conducted by David Martin, whose two-decade career in the electricity industry lends credence to his abilities. Most his electricity career was at Horizon Power, but he also spent six years with Western Power, both Australian power providers. The insights that are developed over a career like this are valuable, and it would seem that many of the early successes of Power Ledger to date can be attributed to the connections made during Green and Martin’s careers, among others. The thing stands on its own legs, as well, but knowing who to talk to about trying something experimental, within other companies, is a valuable asset.

CTO Nuno Martins is listened concurrently as a blockchain expert and the CTO. Most articles related to him which present themselves have to do with his current endeavor. This is partly because an established professor at the University of Maryland shares his name in an also technological field of study. We were able to find a 2013 presentation made by Martins, although the contents of it were not available. This presentation is in relation to the Cloogy software, a smart home application regarding power consumption from a company called Intelligent Sensing Anywhere. The presentation lists him as a Product Manager in Portugal at that time. Martins does not give a bio, so we must mostly guess, considering his LinkedIn profile is also basically blank.

Senior software developer Garry Hasler spent twenty years at IBM in what we today called DevOps. Mainframe and large systems experience like is is absolutely a necessity for the scope of the project Power Ledger is engaging itself in, and a successful career at Big Blue is far and above anything we noted about the team at Suncontract.

POWR / Distribution Details

There are two token distribution models that come into play with the POWR/Sparkz dynamic. They draw it as such:

In the first model, where traditional power companies already have the footing and often the legal control of the grid, the model allows them to play the part of generating the Sparkz tokens, if they choose, and then selling them. People buy and sell Sparkz within the platform, as these tokens are generated by the actual token of the platform that you will speculate on – the POWR token. “Prosumers” are paid in Sparkz. Under this model, the Sparkz may then also be redeemed with the gateway or “Application Host” which issued them. As such, many people could interact with the platform and never have a clue what cryptocurrency was at all. Which is fine.

In the peer-to-peer model, POWR tokens operate on parameters defined in the smart contract and convert the tokens purchased to Sparkz tokens based on the local market. This is explained in a bit more detail:

Sparkz tokens are priced, issued and redeemed in the local currency of the Platform Participant. […] Purchasing a sufficient amount of POWR tokens allows Application Host’s access to the Ecosystem from where they can convert their POWR tokens to Sparkz and on-board their customer base. […] POWR tokens are required to generate Sparkz. Sparkz are a local market level token and are priced for the exchange market they are deployed in, e.g. In Australia 1 Sparkz = 1 cent AUD. They allow for frictionless transacting […] .

In short, POWR tokens are a proof-of-stake staking coins, and rather than generating more POWR tokens, they generate Sparkz. Existing industries are one where we can see Proof-of-Stake being a viable approach, because such industries are filled with companies who have capital they can put up as stake. The problem with many proof of stake coins has been lack of economic incentive to actually stick with the program – fluctuations in the market encourage dumping and so forth. In the case of this project, this risk is lessened by the idea that a great many of the POWR token holders will be directly invested in the economy, in that a quick exit on speculation is not ideal for them. This will also increase the long-term demand for the tokens to be taken back off the market, making it easier to sell at higher prices. Like many ICO tokens, POWR tokens will have a utility and they will be the only way to achieve it. Therefore holding a bag of them when others go in search of them is not the worst position to be in.

The Verdict

So very much to like about Power Ledger. Definitely one to watch. They are running an ICO in the coming months in order to expand global operations, and details are still forthcoming on that.

Risk

Risk here is significantly less than with Suncontract. We have a working, minimum viable product. We have an in-depth plan of execution. We have working technology, rather than theory. Regulatory pushback could slow Power Ledger and Ledger Assets down from realizing their potential in the short-term, but long-term they will probably overcome as many obstacles put before them, like most innovators are forced to do.

Another potential risk is that the entrance into the ICO market, and the issuance of new tokens for sale with the purpose of raising funds, could destabilize the market they’ve already got going. This probably explains why they are approaching their ICO stage very carefully.

For this relatively minor problems, we deduct a 1 point for the unknowns.

Growth Potential

Limitless. In the future there will be more robots than human beings. It’s not crazy to say that analyst predictions on energy consumption are even conservative, being that the rise of cryptocurrency mining doesn’t play a serious role in their calculations, but a sustained push in this direction could make it a cultural normality to get your power from a decentralized market and use some of it to mine decentralized currencies which you spend on other decentralize markets as well. Power Ledger has the right execution and great timing. Their growth potential is massive. We give them the same 5 points granted to Suncontract, plus 2 more for having a minimum viable product with a lot of buzz around it, plus a half-point for ingratiating themselves with literally dozens of partners in the industry they seek to disrupt.

Disposition

Thus we reach the conclusion of 6.5 out of 10 on Power Ledger. This is a great opportunity if it’s within your interests, but probably not a low-hanging fruit. Despite everything going right, actually being able to liquidate any tokens you might acquire during their ICO could prove problematic once the market has its way with the influx of tokens. Long-term profitability is probably there, though, with little reservation from the author in that statement.

Investment Details

Hacked reached out to the team at Power Ledger, and they said they should have more details within “the coming weeks” regarding their ICO. If Power Ledger has piqued your interest, you’re encouraged to get on their mailing list.

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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Analysis

Long-Term Cryptocurrency Analysis: Correction Deepens but Leaders Remain Stable

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As the major cryptocurrencies got hit hard this week, losing around 20% on average, the long-term picture in the segment got close to an entry point for investors. The overbought readings that developed during the late-April rally are now cleared and although the short-term trends are still clearly negative, we still expect the coins to resume the recovery. With that in mind, long-term investors could start accumulating the relatively stronger coins.

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On a negative note, even the leaders violated key support levels during this week’s selloff, but the secular long-term trends are not yet in danger. The prior leaders Ethereum, EOS, and IOTA are still in the center of attention, as we expect them to form a bottom soon. Bitcoin and the other relatively weak coins, like Litecoin, Monero, Dash, and NEO are still lagging the form a technical perspective, but they are also well above the support levels that would indicate an end of the secular bull market.

BTC/USD, Daily Chart Analysis

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Bitcoin is below the key $7650-$7800 support level and it remains the biggest drag on the market, despite a brief period of relative strength this week. The upper boundary of the base pattern that we identified in April is found near $6150, with a weaker zone around $6500, and with the short-term trend clearly being negative, the latter might be tested before a bottom forms. Further resistance is ahead at $8400, $8700, and between $9000 and $9200, and traders and investors still shouldn’t enter positions here.

ETH/USD, Daily Chart Analysis

Ethereum is testing the $555-$575 support zone after violating the $625-$645 range, with the declining short-term pattern being intact. A bottom near the $500 would still keep the recovery intact, but the correction low might already be in, and investors could already add to their holdings here. Further resistance zones are ahead between $735 and $780 and near $845, while support is found near $450.

(more…)

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 257 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

Pre-Market: Oil Plunges Below $70 as Markets Mixed Before Long Weekend

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Financial markets are relatively calm today, despite the hectic week that was highlighted by the Turkish currency crisis, wild swings in bonds, and a step back in US-North Korean relations. Stock markets turned lower globally, with US equities outperforming the rest of the world, essentially drifting sideways all week long, thanks to the slight correction in the Dollar’s rally, and the dip in Treasury yields that was triggered by the dovish Fed meeting minutes.

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S&P 500 Futures, 4-Hour Chart Analysis

Today, the durable goods report came out before the opening bell and although the headline number was a tad worse than expected the more important core figure beat the consensus estimate, helping the slightly dampening economic outlook, even as yields continue to fall, especially with regards to long-dated Treasuries.

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EUR/USD, 4-Hour Chart Analysis

Although emerging market currencies are way less volatile today than recently, despite the rebound in the Dollar, equities shed their early gains and are now slightly in the red. The all-important EUR/USD pair hitting yet another 6-month low near 1.1650, and the test of the key long-term 1.1450-1.15 zone looks more and more likely in the coming weeks, even as the pair is a bit oversold.

Energy Markets in Turmoil as OPEC Signals Production Increase Again

WTI Crude Oil, 4-Hour Chart Analysis

It seems that the crude oil market is in for a strategic switch yet again, as the OPEC, together with Russia made it clear today that the price of the Black Gold finally reached a desirable level. The cartel will be targeting a higher level of output later on this year in order to keep the US shale players under pressure by capping the advance in the key commodity’s market.

The WTI contract reached a 4-year high at $72 per barrel recently and the Brent contract which is more exposed to Middle East woes rose as high as $80 per barrel after trading below the $30 level just two years ago. The last phase of the advance extended above the level where a large portion of the shale plays turn profitable, and as global growth worries also surfaced, the commodity entered a selloff this week.

Gold Futures, 4-Hour Chart Analysis

Safe haven assets continue to be bid despite the relatively calm environment, and gold hit a two-week high today despite the bounce in the Greenback as buyers are back after the wash-out plunge below $1300. With the long-term setup and fundamentals still being favorable for the precious metal, the short-term downtrend line is in danger here.

As US markets will be closed on Monday, which usually favors an active session, volatility might remain high throughout the day.

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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 257 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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Recommendations

Trade Recommendation: Intact Financial

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Technical Overview

  • Since double-bottoming in 2008 and 2009 at $26 (violet horizontal trendline in Figure 1), Intact Financial (IFC.TO) has enjoyed a four-fold increase. During the 2013, 2016 and 2018 corrections, the stock found support at a long-term trendline (support – green trendline; retests – green arrows).

Figure 1. IFC.TO Weekly Chart

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  • Zooming in, after topping in November’17, IFC completed a H&S pattern (tops – yellow ellipses, neckline – yellow trendline in Figure 2).
  • In January, March, April, and May, all up-moves halted at a well-defined short-term resistance (red trendline). Yesterday (May 25), the stock managed to break and close above the resistance.
  • Today, the stock closed in positive territory, whereas the Financial sector (TTFS.TO) declined by over 0.5%.
  • The $95 level had served as support on multiple occasions in 2018 (purple horizontal trendline and arrows).

Figure 2. IFC.TO Daily Chart

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Implications

  • The bounce off of the long-term support and the break above the short-term resistance are considered constructive.
  • The stock is expected to find support in the $95 – $96.50 range during pullbacks (i.e. at the red and purple trendlines).
  • The downward target from the H&S pattern was nearly met during the May decline (target – $92.25 – white vertical trendline in Figure 2, May 9 low – $92.65 – last purple arrow).

Outlook

  • Short-term bullish as long as the stock remains above $95
  • Long-term bullish as long as the stock remains above its long-term support (green trendline in Figure 1).

 Trade Recommendation

  • Buy the stock at current levels ($97.50 at EOD on May 24).
  • Target: Half at $101 (the January low which served as resistance in March – second red arrow). Other half at $108 (origin of the late 2017 decline).
  • Stop: Half upon a close below $95. Other half upon a close below the long-term support (currently at approximately $93.50).

Disclosure: No position yet but may initiate at any time. Will likely recommend the stock to my clients as a potential play within the financial sector.

Featured image courtesy of Shutterstock.

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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4.8 stars on average, based on 12 rated postsPublished author of technical research. In his work on price “gaps”, published in the 2018 International Federation of Technical Analysts’ Annual Journal, he developed a new technical tool for analyzing and trading the “gap” phenomenon – the “K-Divergence” (http://ifta.org/public/files/journal/d_ifta_journal_18). Besides obtaining a Master in Financial Technical Analysis, he has completed a BBA and an MBA from the Schulich School of Business in Toronto and has completed all exams for the CFA, CMT and CFTe designations. Currently, providing research to investment management and financial advisory firms. http://www.linkedin.com/in/konstantindimov




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