E039: “Top 10 Ethereum Tokens”

or make a direct contribution via Bitcoin: 17ojFGrjczRtoAznoa1K4PZGvUSQ695hQX


BTC Status Update as of 3/31/2017
Bitstamp $1079
Okcoin ¥6920
Localbitcoins vol (7d) $32 mil
Network vol (24h) $442 mil
Difficulty est. +3%
Segwit 29%

Sources: PricesLocalBitcoinsBlockchain VolumeDifficulty, SegWit


Trending Topics Altcoins vs Bitcoin, UASF, Classic

8:00 – Top 10 Ethereum Tokens by Market Cap

Ethereum ENS bug forces them to halt launch and go back to the drawing board

List was taken from Etherscan.io/tokens

First question you always have to ask, other than the above Vitalik question is, “Why on ethereum? Why not a stand alone solution?” Ethereum opens your project up to another layer, a base layer to attack or bugs.

10. Chronobank – is Uber for temp workers, professionals, etc.

  • Neat idea, probably tried before. There’s definitely already websites like this for professions where skills are transferable and mobile.
  • This project is so far away from any part of it working, that it’s hard to evaluate.
  • The idea itself doesn’t fit our society yet. Our society isn’t structured in the right way. Maybe 10 years from now.
  • $6 mil valuation is at least sane, but should be $600k.

9. Xaurum – Gold token pyramid scheme of some sort.

  • Scrolly scrolly website
  • Horrible quality explainer video
  • That’s ok, but gold doesn’t need an ethereum token.
  • $8 mil valuation

8. Melonport – a decentralized mutual fund, very similar to ICONOMI except more decentralized.

  • Just completed ICO
  • Years away from a release!
  • Totally, 100%, speculative, and a bad speculation
  • It’s reliance on smart contracts and the fact that it’s more decentralized than ICONOMI is actually a bigger risk for investors, even when thinking about legal issues
  • $18 mil is just insane, and shows that people will throw their ethereum at anything to find a use case for ether

7. Singular – is a decentralized TV series.

  • Why Ethereum! Counterparty would be more transparent.
  • This project is the only one that I think would be good to host on a third party platform.
  • In use now
  • Doesn’t guarantee a good product or satisfaction
  • $19 mil valuation is just too high. Maybe $1-2 mil

6. First Blood – ESports gaming ecosystem. Cool idea. Great market. Why ethereum?

  • Buzzword city. Voting? WTF?
  • So many buzzwords make me think they are less viable, because they have so many outrageous claims.
  • Gambling regs?
  • Centralized. Go the independent centralized route instead.
  • Vaporware
  • $19 mil would sound about right if this were NOT on ethereum. Ethereum just adds risk to this and unneeded complication.

5. Plutus – is a payment app to spend bitcoin.

  • Scrolly scrolly website, and the easiest project to understand by the layman
  • This is a very deep and regulated market, with huge rivals, and they have no competitive advantage at all
  • Highly centralized
  • KYC/AML
  • People aren’t in bitcoin to buy a coffee. They aren’t in Ethereum to buy coffee either. It’s 99% speculation.
  • $25 mil valuation is exactly 100% overvalued. There is no reason for this to exist.

4. Digix Global – this is a gold token play.

  • Again, code is not written
  • Gold can’t be sent over the internet, duh
  • Anyone that claims a dapp does anything for gold that hasn’t been done before is a big time scammer
  • Gold tokens inherently involve a third party and adds counterparty risk, slapping a blockchain on gold is counterproductive
  • Any gold token is directly in the line of fire of regulators and central banks
  • Valuation should be based on gold holdings with a discount, or right now = $0
  • Market cap is currently $29 mil!!!?
  • Mark Dice Youtube video

3. ICONOMI – a digital currency basket, “Digital Asset Arrays”

  • First impression is, “what the hell are they talking about.”
  • It’s just a basket of coins, a mutual fund.
  • Wordplay for regulatory reasons reeks of scam
  • Good writers on the blog, but I still had questions
  • Regulatory burden – Blog post
  • KYC/AML proudly obeyed
  • Frontrunning problem
  • Valuation based on underlying assets, each of which adds risk to this vehicle.
  • $39 mil?! Way too high. The basket should be discounted at least 20% against marked to market
  • Interesting idea. I had a similar idea a few years ago, but using paper wallets and selling baskets of cryptos.
  • This is an important area for wealth managers to get familiar with, but on top of ethereum, buying from some kids you don’t know?
  • The regulators control all your coins here

2. Golem – is decentralized computing power, like storj or maidsafe for storage

  • Biggest unanswered question is about security
  • In this day and age, are you going to open your computer up to others? Your competitors, or hackers?
  • Extremely alpha, but worth $42 mil?! Maybe $4 mil because it’s a interesting avenue to explore
  • More interesting as a Dapp than Augur

1. Augur – it’s a prediction market

  • years in the making
  • risks of programming language
  • updating contracts
  • one admin address switched for a smart contract in the future
  • $100 mil !? for what?
  • it’s still vaporware, 100% speculative, it’s worth about $1 mil until Ethereum itself gets worked out

That’s the top 10. The market caps drop off significantly after this group. In the top 10, there’s exactly oneproject in production, Singular, which is a straight fundraising token. The play money created in the ethereum ecosystem due to speculation must go somewhere, so it goes into these projects. These projects are perpetuating the ethereum bubble, but as more value is created, it eventually will need to have sustainable results.

After looking at this list more in depth, I estimate the fair market cap of Ethereum to be about $100 million. That would symbolize the sober potential and science happening here. Speculation and entrepreneurship are a vital parts of the market, but it can get irrational and dangerous.

After the a successful switch to PoS via Casper (I’m still very skeptical of this likelihood), a higher market cap would be supportable though still purely speculative. Most of these dAPPs are predicated on a basic misunderstandings about blockchain technology.

57:00 – Vinny is back tracking

59:00 – Segwit UASF

If you want to follow the UASF latest news you can check the following sites. The latest I’ve seen is moving up the date to 1 August. I’ve been talking about a date around the White Paper anniversary, but Aug is very soon. I’ll be watching this closely, because things could get irresponsible. But there is a big need for this to be a risk for the miners. The miners are simply stalling. They don’t want any change right now. They’ve locked in 1MB and now are blocking segwit. To win against these miners, there needs to be obvious value ready to jump into a bitcoin post segwit. Obvious to Chinese miners.

Github
Mailing List – for this one, update the link for the month when needed

1.05:00 – Bitcoin Unlimited is dead

People are uniting behind science in Canada’s economic nodes and the bitcoin community in Italy have both declared against BU.

Peter Rizun Chief Scientist of Bitcoin Unlimited did a presentation last year, that resurfaced, where he said that bitcoin needs greater than zero inflation, leading people to believe that BU wants to get rid of 21 mil cap. That was not popular.

Problems with BU linked in my last podcast spread quickly and the same points were used in the eloquent Italian rebuke of BU.

 

1.12:30 – New Attacks on Bitcoin Gearing Up

Bitcoin EC is just Bitcoin Unlimited retooled for starting from Core 0.14. This was started by people that truly believe in Emergent Consensus and don’t have a bi problem with Segwit. Therefore, I don’t think it will get wide support from miners, but many individuals in the space could jump here.

Bitcoin Classic is back! A draft of a medium post leaked the other day, about a purposeful split by Classic on 1 June of this year. The leaked draft post made a few waves, but nothing really big came it. Classic is kind of a laughing stock (but interesting enough, is a better choice than Unlimited).

1.16:30 – Rootstock (RSK) is Bringing Ethereum-Like Smart Contracts to Bitcoin

RSK’s website with a link to the white paper at the bottom.

This isn’t the first time we’ve heard about smart contracts coming to bitcoin. Bitcoin has some built in already, like CheckLockTimeVerify, but they aren’t flashy. They are, however, simple, powerful and SECURE. Also, Counterparty has ported Ethereum smart contracts to their token substrate, which remains on testnet and it may never be activated on mainnet. RSK is a sidechain project that uses a “2-way peg” to create a separate but connected chain. This sidechain can have different rules and economic incentives that the main bitcoin network. RSK just announced they are launching this June.

When talking about sidechains, there’s one big hurdle right up front which doesn’t have an easy solution, mining. RSK is a merged mined sidechain, and will supplement bitcoin’s built in subsidy to attract miners. This make the potential security equal to that of bitcoin. Currently, approximately 5% (give or take) of bitcoin’s hashing power is expected mine RSK as well. The biggest worry for a sidechain is that other miners will be able to attack the lower hashrate of the sidechain in a 51%.

RSK solves this will a federated client idea. They have implemented checkpoint clients on their network, which will help guard against attacks like this. While a federated system isn’t decentralized, it is distributed to a degree, and relies on well known companies in the bitcoin space, that are incentivized to keep their reputation untarnished. When the level of merged mining hits 66% and a 51% is reduced to almost zero, the federated clients will lose their jobs.

I’ve talked about RSK on the show before, and if I remember correctly, was critical of their federated solution. I’ve been critical of sidechains in the past, too, because of their bootstrapping problem. I’ve come around a little bit here, and think that while a federated system isn’t perfect, it is good enough as a L2. Competition between L2 solutions will create new markets for trusted third parties, but they won’t affect the protocol layer of bitcoin.

 

Ansel Lindner Written by:

Ansel is a bitcoin specialist, economist, and podcast host.

  • Gary Hughes

    You send like somebody who clearly missed the boat at $0.5, $1, $5, $10…. $40… some free info for you sir the ship hasn’t even set sail yet get on whilst you still can!!!

    • Ansel Lindner

      Missed the boat on ethereum? I’m glad people have made money. Would you recommend people invest without first evaluating the investment or knowing what it is they are investing in? If so, that’s quite irresponsible and confirms my belief that this is a bubble. What metrics would you propose I use to evaluate ethereum? Using solely market price is very dangerous like dash at $120, zcash at $3000, or Steem at $20.

      Ethereum has a built in way to extend its bubble with these tokens. Speculative gains have a place to exit without popping it immediately. But that’s a double edged sword, because that also makes it slower/harder to exit when the time does come.

      Even bitcoin has had 95% price crashes, ethereum and these tokens aren’t immune to that.