Electroneum (ETN) is a project that looks very innovative and exciting on the surface. It’s a blockchain network which seeks to link every mobile phone in the world into a micropayments network that you can use to pay for anything you’d like.
Because it came to life as a Monero (XMR) fork, Electroneum’s privacy features are superior to most other blockchains in the crypto verse.
Another attractive feature in Electroneum (ETN) is the mining process. It really doesn’t exist. Mining for new tokens is done on the project’s cloud server. If you want to join the process, you just need to install an app to your mobile and tap the screen a few times. This will get you a few ETN tokens daily without draining your phone’s battery or costing you anything.
It’s promising, it looks great, but it’s not succeeding. Why? In this article, we’ll try to point out a few flaws present in the ETN project that you should probably take into account before you decide to go for it.
The first problem with ETN is its market behavior. ETN trades at USD 0.005608 as we write this. It’s capitalized at about USD 54 million, which is not exactly a high number. It’s ranked 121 by market cap. The reason this is a problem is market mechanics.
The low capitalization, along with the low price, means that manipulating the price is relatively easy. It also means that liquidity is very low. And inferior liquidity means volatility. So while the price is low, it’s not a good investment because it fluctuates all the time wildly.
It often happens that ETN’s trading volumes are so small (nearly unexistent) that no chart can show you what’s happening. The cryptosphere is already infamous because of its volatility, and ETN is one of the worse offenders in that regard.
The use case
Another problem is the project’s use case. Yes, a micropayments network sounds very cool. But that’s the very same thing that Bitcoin, Litecoin, Monero, and many other more successful tokens are trying to achieve. The only original point in Electroneum is the emphasis on mobile technology. But there are already plenty of mobile wallets which allow you to use other tokens. And that kind of defeats ETN’s selling point.
And since we’ve touched on micropayments networks. It’s no secret that Facebook is working on a proprietary blockchain project. The company remained very secretive, but now they’ve come forward and announced that it would include a cryptocurrency called Libra. In the company’s own words, Libra is “A simple global currency and financial infrastructure that empowers billions of people.” In other words: Facebook’s Libra will be yet another crypto-based micropayments system.
Which creates yet another problem. The success of any cryptocurrency depends almost solely on adoption. ETN has 3 million users so far. Facebook has more than 2 billion. So adoption of Libra is bound to be way faster than ETN’s (or almost any other cryptocurrency) just because of the sheer size of its user base.
So what to make of Electroneum? It’s interesting, it’s exciting, it looks great on paper. But it’s never going to work out unless it corrects its fundamentals so that it stops competing directly with almost every primary cryptocurrency in the market or, even worse, with Libra in the future.
Disclaimer: The presented information is subjected to market condition and may include the very own opinion of the author. Please do your ‘very own’ market research before making any investment in cryptocurrencies. Neither the writer nor the publication (TronWeekly.com) holds any responsibility for your financial loss.