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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.

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.

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

Pre-Market: Trade War Optimism Sparks Another Bounce in Stocks

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Global stocks are markedly higher today before the US open, Donald Trump’s quite aggressive negotiating seem to be paying off, at least with regards to China, as in the wake of the pronounced weakness in Chinese assets, and the notable slowdown in the economy, the country wants to reopen the talks with the US.

Shanghai Composite, 4-Hour Chart Analysis

The Shanghai Composite hit a new bear market low overnight before recovering above support into the close, and the Dollar’s rally also ran into resistance, thanks to the Yuan’s bounce of its fresh 13-month low. Emerging market assets are also somewhat higher today, with the help of the Turkish Lira’s continued bounce, but the segment is still deeply wounded technically, and more pain is almost inevitably ahead, as the negative trends still stand.

 

DAX Index, 4-Hour Chart Analysis

Walmart’s great earnings report also fueled the pre-market rally in US futures, as the retail segment in the largest economy still seems to be doing just fine, despite the global woes. The major US indices are after an orderly looking correction, in stark contrast with their European and Asian peers, which are stuck in broader downtrends or even full-blown bear markets.

Nasdaq, 4-Hour Chart Analysis

Yesterday’s tech selloff, which was triggered by the weak report of Chinese giant Tencent has almost been erased after the better than expected numbers of Cisco restored confidence in the market-leading segment. Nvidia (NVDA) will also report after the market close, and as the earnings season is drawing to a close, we can conclude that corporate profits had a blowout quarter in the US, even as cracks in the global economy appeared.

Momentum is still clearly on the side of the FAANGS and the whole US tech sector even after discounting Facebook’s recent plunge, but should the tightening cycle of the Fed continue to drain liquidity from financial markets and should the rising trend in rates persist, we expect valuations to suddenly matter soon.

Dollar Pulls Back

Dollar Index (DXY), 4-Hour Chart Analysis

The possible resumption of the US-Chinese trade talks sparked a, so far, weak correction, which also due from a technical standpoint, with the EUR/USD pair finding support near $1.13, and with the broader Dollar Index running into resistance near the 97 level. The rally in the reserve currency is no danger by any means, as the break-out is clearly intact, but a deeper pullback would help risk-assets in the coming days.

WTI Crude oil, 4-Hour Chart Analysis

Commodities are slightly higher thanks to the relief rally in emerging markets and the dip in the Dollar, but the previously stronger crude oil is just holding up above the $65 support, while gold is clearly below $1200, and copper couldn’t get back anywhere near yesterday’s break-down level close to $2.70.

Featured image from 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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4.6 stars on average, based on 320 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

Crypto Update: Market Stabilizes but Bulls Not Out of the Woods

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The cryptocurrency segment looks much better than any time in the last 10 days, as the major coins managed to hold up above the liquidation lows hit on Tuesday. While the bounce stabilized the market, there is still substantial fragility following the steep selloff, and until further bullish moves, traders shouldn’t enter full positions.

That said, finally, there are signs of relative strength among the top coins as correlations are slightly lower, and some of the bearish leaders managed to recapture key resistance levels. Litecoin is trading right at the crucial $56 level, while Monero is above the $90 level, and as we noted before the exhaustion of their downtrend is a positive sign or the whole segment.

XMR/USDT, 4-Hour Chart Analysis

The bounce and the following stability triggered a few upgrades in our trend model after spending almost 1 month in the sell zone, but there are still no majors on a buy signal as the segment-wide downtrend remains intact. Bitcoin remains the strongest coin from a technical perspective, while Ethereum and Ripple, which showed weakness for weeks, are also in better shape, even as they face very strong resistance levels.

ETH/USD, 4-Hour Chart Analysis

Ethereum managed to hold up above the $275-$280 level during the overnight pullback, and now it faces the $300 resistance level again, trying to build on the recent rally. While the short-term downtrend is intact, and the oversold longer-term momentum readings could fuel a rally in the coming weeks, but now the coin is in a structural bear market after the break below $400.

The coin is now neutral from a short-term standpoint, but a move below $275 would point to another test of the lows. Further resistance is ahead at $3335 and $360, while strong long-term support is at $260.

Bitcoin Still Below $6500 as XRP Nears $0.30

BTC/USD, 4-Hour Chart Analysis

Not much has changed for Bitcoin in recent days, but relatively speaking the largest coin showed significant strength. That said, until BTC doesn’t show bullish momentum, traders still shouldn’t enter positions, as the structurally important $5850 level is still not far below the current price level. A move above $6500 would trigger a short-term buy signal, but further strong resistance levels are ahead at $6750 and $7000, while support is still found at $6275 and $6000.

XRP/USDT, 4-Hour Chart Analysis

Ripple and Ethereum are in very similar technical setups, and XRP is also facing strong resistance at $0.30 after finding support overnight near $0.275. After the panicky spike below $0.26, the odds of a durable increased, and should the coin stay above the overnight lows, the coin could avoid another short-term sell signal. While traders should still stay away from entering full positions here, a bottoming process might already be underway.

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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 320 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

Ethereum Takes Baby Steps to Recovery as Global Markets Surge 10%

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Following the first serious rebound from the last week’s carnage the global market gained 10% overnight, pushing back through the $200 billion barrier after a brief dip to $190 billion yesterday.

Ethereum Price Recovery

The rebound was not distributed equally, with many of the altcoins which had previously lost the most now benefiting in turn. Ethereum made a strong push in the last twenty-fours as it climbed from a near year-long low of $254.56 up to the current range in the $280’s, where it sits at the time of writing.

The 11% gains for the day sound good, but amount to relatively little in dollar value considering how much the coin lost in recent weeks. At one point during the night ETH climbed to a unit price of $290 – but that’s as far as it could go during this particular twenty-four stretch.

The sudden surge over the last twenty-four hours wasn’t enough to take Ethereum to the £300 mark, although that could be achieved following another 5% growth. The current $284 price per ETH is still one of the lowest witnessed in the last 11 months, so there’s still plenty of scope for investors to jump on board.

Predictably, USDT trades are the most popular today, making up close to 20% of the daily total as a significant portion of ETH becomes un-tethered. Wash-trades, or transaction mining on multiple exchanges once again comes close to equalling the actual recorded daily volume of $1.8 billion.

Global Surge Re-Rearranges Altcoins

While nothing could be termed normal in the crypto world, several coins have returned to their former market cap positions from before the dip. EOS is back in 5th place after temporarily being ousted by Stellar, and Cardano has returned to 8th spot after briefly giving up its place to Tether.

TRON and IOTA are still lingering outside the top ten, with Monero holding strong in the 10th spot previously occupied by TRON, and then IOTA in recent times.

Correlation and Causation

You’ve probably seen the Google Trend charts which show an alignment between ‘cryptocurrency’ Google searches, and the total cryptocurrency market cap. Right now the search volume is as low as it has been since before the surge of 2017 – but that isn’t necessarily an indicator of a lack of interest. It just means that people aren’t typing the word ‘cryptocurrency’ (or Bitcoin, which has an immensely larger search volume) into Google any more.

It says nothing about the number of people checking CoinMarketCap every day, and it doesn’t let you know how many people have suddenly become interested again after seeing prices drop to such long-time lows.

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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4.4 stars on average, based on 38 rated postsGreg Thomson is a full-time crypto writer and digital nomad. He eats ICOs for breakfast and bleeds altcoins. Wherever he lays his public key is his home.




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