Coin Report #9: MonetaryUnit

N.B: In the spirit of full transparency, the following Coin Report on MonetaryUnit is a Sponsored Post.

Welcome to the ninth Coin Report. In today’s report, I will be assessing the fundamental and technical strengths and weaknesses of MonetaryUnit. This will comprise of an analysis of a number of significant metrics, an evaluation of the project’s community and development and an overview of its price-history. The report will conclude with a grading out of 10. I hope you enjoy the read!

Introduction

MonetaryUnit is a rather special case with regards to my Coin Reports, as one of their team members is a friend of mine in the space: @notsofast. As such, I’m going to be even more brutal than is the norm and tear MUE to pieces… only kidding nsf.

In fact, I first came across the project in November 2017, when notsofast tweeted that he’d had a meeting with the MonetaryUnit team at Brewdog; a brewery I’m a big fan of. Discussion of beer was indeed my first contact with the project. Following that, however, I didn’t pay much attention to it until around June 2018, when I bought a little based on the range it had formed between 1200-1600 satoshis for a period of around four months. The market swiftly sat me down for doing no further due diligence than this little slice of technical analysis, and price broke the range a few weeks later. I sold out of my position at a minor loss, and have not looked at the coin since. Strangely enough, price has again formed a long-term range… but we’ll get to that a little later.

Moving away from my past experience with the project, what is more important is where the project stands now; what it has accomplished; where it is failing on its promises; where it has room for improvement; and whether there is an opportunity here, at current prices, for us speculators. Having completed my research, I can say from the outset that there is quite a lot to get through…

I hope this ninth Coin Report will prove objective where it must be and fair on more subjective matters. For those who’d like to learn a little more about MonetaryUnit prior to reading this report, here are some primary links:


Fundamental

General:

Name: MonetaryUnit

Ticker: MUE

Algorithm: X11 (now pure Proof-of-Stake)

Sector: Decentralised Payments & Services + Masternode Platform

Exchanges: Bittrex, Upbit, CoinExchange, CryptoBridge, Bittylicious

Launch Overview

MonetaryUnit was launched in July 2014, as a Quark clone, but was relaunched in June 2017 as an X11 Dash hybrid. It has since migrated from the X11 Proof-of-Work consensus mechanism to fully Proof-of-Stake, operating alongside a network of masternodes. This migration took place in October 2018. There was a 1% premine (which has since been distributed in its entirety, towards bounties, Bittrex listing and other developments) and no ICO. Further, the coin is in its final block reward stage; a stage that will continue indefinitely – 40 MUE block rewards in perpetuity. This is important to note as we will discuss it in greater depth when we move on to talk about inflation and supply emission.

Price-History Overview

MUE has been trading for over four years, and, as such, has perhaps the most substantial price-history of any coin that I’ve produced a Coin Report on thus far. Since its inception, MonetaryUnit has hit an all-time high of around $0.50 against the Dollar and ~8000 satoshis against BTC. Since hitting these highs, it – as is the case with the entire market – has dropped off considerably, shedding well over 95% of its value against the Dollar. This may be an opportunity, but we’ll know for certain by the end of this report.

Project Overview

When it comes to goals and identity, it seems to me that MonetaryUnit knows where it stands and knows what it wants. This much is clear from even the most surface-level research. In their whitepaper, they state that MonetaryUnit “is designed to be a virtual currency accessible to all” with a clear focus on developing an “ecosystem of services and apps”. If a little broad in the former aim, at least the project is clear in its path to success via the latter. Talk is cheap, however, and we’ll soon see whether the team are succeeding at their intended focus on payments and services.

But first, some metrics:


Metric Analysis:

Below are listed a number of important metrics, all of which are accurate as of 8th January 2019. For anyone reading this who has yet to read a Coin Report, it might be worth reading the corresponding section of the first report, where any potentially unfamiliar terms are explained. For any terms or metrics specific to this post, I will provide explanations besides the figures.

Metrics:

General:

Price: $0.019 (465 satoshis)

Exchange Volume$13,142

Circulating Supply: 147,601,670 MUE

Total Supply: 147,601,670 MUE

Maximum Supply: 4,000,000,000 MUE (over 120+ years)

% of Max. Supply Minted: 3.69%

Network Value: $2.761mn (686.35 BTC)

Network Value at Max. Supply: $74.827mn

Category: Midcap

Exchange Volume-to-Network Value: 0.48%

Average Price (30-Day): $0.019

Average Exchange Volume (30-Day): $67,773

Average Network Value (30-Day): $2.851mn

Average Exchange Volume (30-Day)-to-Network Value: 2.38%

Volatility* (30-Day): -0.1103

Average Daily On-Chain Transactions (30-Day): 115

Average Daily Transactional Value** (30-Day): $118,056 (source)

NVT*** (30-Day): 23.39

% Price Change USD (30-Day): +15%

% Price Change USD (1-Year): -96%

USD All-Time High: $0.496

% From USD All-Time High: -96.3%

Premine % of Max. Supply: 1%

Premine Location: Fully distributed

Liquidity (calculated as the sum of BTC in the buy-side with 10% of current price across all exchanges): 1.8826 BTC

Liquidity-to-Network Value %: 0.27%

Amount Available on Exchanges: 6,267,367 MUE

% of Circulating Supply Available on Exchanges: 4.25%

*Volatility is calculated by taking the average price over the given time-period, calculating the difference between it and the highest price and it and the lowest price over that same time-period, and multiplying those figures together. The closer to 0, the less volatility during that period, and vice-versa. Read this for more on calculating volatility.

**Transactional Value in $ is calculated by taking the average daily transactional value in MUE and multiplying it by the average price for the past 30 days.

***NVT is calculated by dividing the Network Value by the Average Daily Transactional Value. See here for more on NVT.

Supply Emission & Inflation:

Block Reward Schedule: 40 MUE block reward in perpetuity. 2160 blocks minted per day = 86,400 MUE minted daily. No halvings.

Average Block Time: 40 seconds

Current Block Height: 206852

Annual Supply Emission: 31,536,000 MUE (146.64 BTC at current prices)

Annual Inflation Rate: 21.37%

Circulating Supply in 365 Days: 179,137,670 MUE

Staking & Masternodes:

Network Staking Weight: 39,058,181 MUE (source)

Staking ROI (Annual):  36.33%*

Masternode Collateral Size: 500,000 MUE

Masternode Price: $9,353.48

Masternode Count: 89 (source)

Masternode Count Growth (30-Day): 5.62%

Supply Locked in Masternodes: 44,500,000 MUE

Masternode Reward / Block Reward: 45%

Masternode ROI (Annual): 31.89%**

Masternode Network Value$832,459

MNV / Network Value: 30.15%

*To calculate annual staking ROI: (Annual Supply Emission * (Stake Reward / Block Reward)) / Network Staking Weight = (31,536,000 * 45%) / 39,058,181 = 0.3633 = 36.33%

*To calculate annual masternode ROI based on current active masternodes: (Annual Supply Emission * (Masternode Reward / Block Reward)) / Supply Locked in Masternodes = (31,536,000 * 45%) / 44,500,000 = 0.3189 = 31.89%

Distribution:

Address Count: 43,979

Supply Held By Top 10 Addresses: 36.26%*

Supply Held By Top 20 Addresses: 41.15%*

Supply Held By Top 100 Addresses: 69.64%*

Inactive Address Count** in Top 20 (30 Days of No Activity): 3

*The top 4 addresses belong to Bittrex and equal 30.13% of circulating supply. This will be in the form of cold storage, hot wallets and MUE in the orderbook. Discounting this amount, the top 10 (5th-15th richest = 8.93% and the top 20 = 12.99%.

**This is discounting the 4 addresses belonging to Bittrex.

Analysis:

That may be the largest pile of metrics I’ve ever published on a coin, but that’s simply because MonetaryUnit ticks all the metric-related boxes: it is a project that features staking, masternodes and has a Chainz explorer, which allows for high-level distribution analysis.

However, it is important to begin with the metric that is most relevant to MonetaryUnit’s core aims; namely, payments. Given this specific aim, on-chain transactions are of the utmost significance, and, for the first time in a while, I’ve been able to calculate transaction-related metrics. Thank you, Chainz. Many explorers make it very difficult to extract information concerning on-chain transactions, but the Chainz explorers make it incredibly easy, though there is admittedly no way to determine just how accurate this data is. Regardless, we’ll make do with what we have – at least there is data:

According to the explorer, MonetaryUnit is experiencing around 115 on-chain transactions per day, using the past 30 days of data. Further, and more significantly, the average daily transactional value is ~$118k. Using this information, we can calculate the NVT of MUE for the past month, and the results are rather stunning: the coin has a NVT of 23.39.

What does this mean, and why is it significant? Well, to give some context, the NVT of Bitcoin is currently around 119, or 5x greater than that of MUE. In other words, if Bitcoin is fair value at current prices, MonetaryUnit seems heavily undervalued based purely on the value of on-chain transactions relative to the respective network values. Now, don’t get me wrong – this is no fair comparison: Bitcoin and MonetaryUnit are playing at entirely different scales. But, it must be said that the most reliable metric for the usage of MUE as a means of payment is very much positive.

So, we’ve established that the coin fares well with regards to its principal aim, but how does it fare elsewhere? I’ll begin by running through the remainder of the General metrics, before moving onto those concerning Supply Emission & Inflation, Staking & Masternodes and finally Distribution.

The first metric that catches the eye is that of the supply of MUE available on exchanges. At 4.25% of the circulating supply, it is rather large, relative to coins from other reports; in fact, MUE has the second-largest percentage of circulating supply available on exchanges of any of the prior coins reported on. This is a measure indicative of a lack of willingness (or incentive) to hold MUE, which, though not a positive for projects concerned with being seen as a store of value, is in fact expected of a coin focused on its utility as a means of payment.

However, MonetaryUnit does feature staking and masternodes as an incentive for holders, but perhaps the rewards are not alluring enough: coins like Bulwark had only 1.18% of the circulating supply on exchanges, at the time of writing, but presented annual returns of around 60% for masternode holders; almost twice those offered by MonetaryUnit masternodes.

Where the above is concerned with measuring supply for the market, Liquidity is its counterpart, relating more closely to demand. MonetaryUnit has Liquidity of 1.88 BTC, or 0.27% of its Network Value. This is indicative of a moderate level of demand at or near current prices, and Stakenet and Bulwark are the only two coins from previous reports to have shown greater Liquidity; Bulwark beating MUE by only 0.02%, however, with Stakenet clearly the most liquid at 0.51%. Regardless, MonetaryUnit doesn’t fail to show signs of buying interest, even in such difficult times for the space.

Next, we should take a look at price, particularly the all-time high. At current prices, the coin is trading at a 96.3% discount to the high of a little under $0.50. This is a possible opportunity, presenting huge upside potential if MUE is otherwise fundamentally and technically sound, as is yet to be determined.

Before I conclude the evaluation of the General metrics by discussing volume, there’s a couple, more isolated points to tie up:

Firstly, the maximum supply of MonetaryUnit is 4,000,000,000, which puts the current circulating supply at less than 4% of the maximum supply. On the surface, this would suggest extreme inflation is inevitable, and thus there shall be major headwinds for price growth, but it so happens that the maximum supply will not be reached for over 100 years, which is well beyond the life-span of anyone reading this and thus irrelevant. We shall come to its implications for inflation shortly.

Secondly, I have included a new metric in this report; namely, Volatility. This is a metric I devised recently when writing a post on risk management, and it is merely a simplistic method of assessing the volatility of any given coin over any given period. As stated in the footnote to the General sub-section, the closer the figure to zero, the less volatile the coin during the period measured. MonetaryUnit scores -0.1103 for its Volatility over the past 30 days.

Having tested the methodology with numerous altcoins over the same period, I can say that this is not too dissimilar from that of Ethereum. As more reports are written, and my spreadsheet of metrics updated, this metric will become more useful; cross-comparisons will be possible based on the volatility of the underlying markets.

Now, let’s take a look at Exchange Volume to conclude this sub-section of metrics: MonetaryUnit experienced ~$13k of Exchange Volume over the past 24 hours, which equates to 0.48% of its Network Value. This is around half of what I like to see for Exchange Volume-to-Network Value, but, given the current market conditions, it is expected. It actually places MUE half-way in the pack of previous coins reported on. But a single day of data is not so reliable.

MonetaryUnit’s Average Exchange Volume for the past month has been closer to $68k. This equates to a much more healthy 2.38% of the Average Network Value across the same period. This is certainly more promising with regards to smart-money interest. Further, it is the second-highest Average EVNV of any coin reported on, beaten only by Arionum. Given present market conditions, I’d say this was a sure sign of accumulation taking place, but this can only be verified by the chart and the rich-list.

Moving onto Supply Emission & Inflation, MonetaryUnit is very much straightforward. With its block reward schedule of 40 MUE per block in perpetuity and 40-second block times, we can calculate that there are 2160 new blocks minted daily, or 86,400 MUE. This equates to an annual supply emission of 31,536,000 MUE, which, at current prices, is 146.64 BTC. The annual inflation rate implied by such supply emission is 21.37% – a modest amount. In fact, it once again places MUE in the middle of the pack: Arionum, Bismuth, Dero and Bulwark all experience greater annual inflation; Stakenet, Covesting, ALQO and Geocoin experience less.

This is, however, surface-level evaluation. Let’s break it down a little bit further and take a look at the relationship between volume and supply emission:

Using the figure of 86,400 MUE minted daily, we can calculate that this is roughly 0.4 BTC-worth at current prices, or $1,620. MonetaryUnit’s Exchange Volume covers this emission by ~811%; its Average Exchange Volume covers it by ~4183%. In other words, MUE trades far more volume on a daily basis than it mints new coins, thus current prices should be sustainable. Decreasing prices at present are more likely to be panic sellers or smart-money distribution than the effect of newly minted coins being dumped. This is important, as it tells us that manipulation has a firmer hold on price than inflation. Further, these calculations are not taking into account the fact that 10% of each block reward is locked in a governance system for budget proposals; something I will discuss at length later. Lastly, when we take into consideration the Liquidity of around 1.88 BTC, daily supply emission is covered almost 5x by buy support within 10% of current prices…

Now, let’s take a quick look at the metrics related to Staking & Masternodes. Unlike for most Proof-of-Stake coins, we are able to determine network staking weight for MUE thanks (again) to the explorer. Given the network staking weight, the annual supply emission and the fact that 45% of the block reward is distributed to stakers, I have calculated the annual ROI to be 36.33%.

More important, however, are the metrics concerning masternodes. With a masternode priced around $9300, they are a little more expensive than many others, which perhaps accounts for the fact that only 89 are active. However, this equates to 44.5mn MUE locked in masternodes, which gives us an annual ROI of 31.89%. At present, it seems staking is more profitable. Both options, however, give solid returns that are greater than the annual inflation.

What about Masternode Network Value? Well, with 44.5mn MUE locked in masternodes, the MNV of MonetaryUnit is $832,459. This equates to a little over 30% of the Network Value, which is indicative of a masternode network that is moderate in strength, but with plenty of room for growth.

Finally, Distribution:

Now, the first point to highlight is that MonetaryUnit has the highest address count of any coin I’ve managed to find that figure for in previous reports – and by some margin. But that doesn’t tell us much about the distribution of the coin or the activity of the largest holders.

With regards to distribution, at the surface, it seems as though the top 10 addresses own over a third of the circulating supply. However, on closer inspection, the top 4 richest addresses belong to Bittrex, so, for more accurate figures, we should discount those. The top 10 richest addresses excluding these Bittrex addresses (i.e 5th-14th) control 8.93%; and the top 20 (i.e 5th-24th) control 12.99%. This is strong decentralisation of supply, but with enough concentration towards the richest addresses to indicate smart-money interest. Further, only 3 of the top 20 addresses (again, excluding those of Bittrex) have been inactive over the past 30 days… but what exactly have the remaining addresses been doing?

Well, 12 of the top 20 are staking their positions and have been doing so for some time, and a 13th address is also staking but distributing its stakes. Of the remaining 7 addresses, 3 are inactive, as mentioned earlier, 2 are running masternodes and accumulating the rewards, and 2 are adding heavily to their positions. Of these 2, one is the 5th-richest address, which has added over 1.5mn MUE to its position since December; the other is the 7th richest, which has more than tripled its position in a month. Very promising signs, indeed.

And that concludes this lengthy section on metrics. Let’s now turn to the MonetaryUnit community:


Community:

There are two primary aspects of community analysis: social media presence and Bitcointalk threads. I’ll begin with the former before moving on to the latter.

Social Media:

Concerning social media presence, there are four main platforms to examine: Twitter, Facebook, Telegram and Discord.

MonetaryUnit is present on only two platforms: Twitter and Discord. To begin, let’s look at the various social metrics that I calculated from the MonetaryUnit Twitter account:

Twitter Followers: 15,109

Tweets: 9841

Average Twitter Engagement: 0.09%

As usual, I will be using RivalIQ‘s social benchmark report for evaluation purposes.

Unfortunately, MonetaryUnit isn’t on Facebook, so we can’t do a comprehensive evaluation of its social benchmarks. I am quite surprised at the lack of a Facebook page altogether; let alone a well kept page with a decent audience, as Facebook is a huge opportunity for userbase growth, particularly for a project that has its sights set on being used for payments in e-commerce. Rather disappointing.

Anyway, as is expressed in the RivalIQ report, the average engagement rate on Twitter across all industries is 0.046%, and the average in the Media industry (the most resemblant industry in the report) is 0.013%.

MonetaryUnit’s rather large Twitter following of over 15,000 does seem to be suffering from a lack of engagement; despite having an average engagement rate twice that across-all-industries, and around 7x that of the Media industry, it falls short against other cryptocurrencies. In fact, of the coins I’ve produced reports on, MUE’s engagement rate of 0.09% is half that of the coin with the second-lowest engagement rate – Geocoin. Clearly, there is work to be done here.

I believe one of the reasons for such low engagement is the frequency of tweets; with almost 10,000 tweets since the account’s inception, MonetaryUnit have been tweeting (or retweeting), on average, 6 times a day for four and a half years. No doubt, being active is super important in building an audience and thus a potential userbase, but there is a lot of fluff. It is quite clear that the higher-quality, more informative tweets posted do show good engagement, particularly those concerning the project itself, as opposed to (for example) tweets about the numerous cryptocurrencies accepted on Flubit.com.

Now, moving onto Discord, MonetaryUnit has 633 members in its group – a very small group relative to the size of its Twitter audience. That being said, the Welcome channel indicates that 24 new members joined in the past week, equating to a 3.79% weekly growth rate, which is quite strong.

The Discord itself has plenty of channels for relevant topics, allowing for ease-of-access and usability. Announcements is updated every 3 days, in general, which is good to see, with recent announcements covering the following: the appointment of a marketing advisor; iOS app release; new wallet release; and cashback for Flubit users in the form of MUE, as a means of growing awareness (very impressive – though I’ve mentioned it twice now, we’ll get to Flubit a little later). Budget Proposals has not been updated since the end of November; Twitter is useful as it allows members to view all MUE-related tweets natively; and Suggestions is not all that active but I did see something about Ledger integration and a listing on Bitfineon… good ideas, both of them. There are also several channels for specific areas of Support, which is very useful for newer users as the responses are specific to their issues; all Support channels also appear to be prompt in their solutions. Lastly, before moving onto the most important channel of the group, there is a Links channel with all important resources linked.

The vast majority of the discussion occurs in General, as is often the case. In this channel, around 30 members of the MonetaryUnit community engage in near-constant daily discussion, equating to a 4.73% engagement rate. This is far, far better than the engagement seen on the Twitter account. However, whilst there seems to be a lot of general conversation and some talk on ‘Muenion 2019’, which I’ll assume is a MUE conference with a terrible name, there does seem to be a lack of discussion regarding future development, community growth and ideas. There is, however, some discussion on price and much on the acceptance of MUE as a means of payment for numerous services. I would like to see the community’s strong engagement (around 4.7% of the group is involved in conversation) more concentrated towards fostering ideas for the growth of the project; perhaps this can be incentivised in some way. Or perhaps my evaluation of the past couple of weeks of discussion is an anomaly.

BitcoinTalk:

The MonetaryUnit BitcoinTalk thread was created on 11th September, 2014, and has since generated 4314 posts spanning 216 pages in 1580 days, giving an average of 2.73 posts per day. However, in the past 90 days, the thread has had 97 posts via ~32 individual posters, giving an average of a little over 1 post per day, suggesting that activity has died down of late.

Regarding the content of the thread, there are clearly lots of development updates being pushed out, which is great to see. I found mentions of an Android wallet release; the changover to MUE 2.0 (full Proof-of-Stake); a new explorer; the launch of MonetaryUnit’s direct-buy service, where MUE can be bought natively on their website; Flubit integration; listing on EmblemDEX; a podcast episode on YouTube; an iOS app; and more. In short, there seems to be a lot going on; strange that this was less evident in the Discord group.

Support queries from the community are swiftly responded to and resolved, and much of the community discussion is focused on masternodes versus staking, in the context of probability. This is good to see, as new users who come across the thread will immediately be inundated with the financial incentives of buying MUE…

That concludes the section on Community. Onto Development:


Development:

For the following Development analysis, I will be evaluating project leadership, the website, the roadmap, the whitepaper, the wallets and finally providing a general overview:

Project Leadership:

With regards to project leadership, there are 7 core members listed on the website, 307 contributors to the Github and 10 members of the Taiga roadmap platform.

Of the 7 core members, there is the Founder of MonetaryUnit (Byron), 3 Developers, 1 Tech Advisor, 1 in control of Finance and 1 ‘Project Controls’. Whilst this is a moderately-sized core team for the size of the project, it would be great to have more information on these roles and the individual members’ experience and expertise – no doxxing necessary; just more indication of experience. Also, there does seem to be an imbalance towards development, which, in itself, is no bad thing, but the lack of a marketing specialist is perhaps an explanation for the weaknesses shown in social media presence and group size on Discord. As was stated earlier, however, a marketing advisor from the Crypto-Twitter community has recently been appointed, which is good news, but I believe a core team member with marketing expertise would be even better.

Update: A recent announcement has brought to light a significant expansion of the MonetaryUnit team, which now comprises of all core members plus the entire staff at Flubit.com, who will be working as part of the MUE project. Flubit is the world’s largest crypto-enabled marketplace, and the original partnership and integration of MUE to the website was impressive enough. But the merger of the two is massive for potential userbase growth of MUE. Good work. Further, the website has been updated to include all of these new additions to the team.

Website:

https://www.monetaryunit.org/

Firstly, I’d like to say the website is well-branded with regards to colour-scheme, and screams MonetaryUnit as soon as the homepage loads. However, I am not overly impressed with the rest of it. The site is far less information-dense and resource-dense than would be optimal – a website is, after all, usually the first point-of-reference for new users. Further, it is not as easy or intuitive to navigate as many other websites in the space, by projects of equal (or smaller) size. In general, there needs to be more consistency with the design, as some fonts are used for certain copy and others elsewhere, and an update of the UI/UX would be of great service to the project, I think. The Why MUE? section is great; clear and concise and informative – the website needs more of this.

The block explorer is solid and functional, but is not linked in the navigation menu, making it very difficult to find without a direct link. The roadmap isn’t linked anywhere on the website either; more optimally, there should be a native infographic for new users to understand the past, present and future of the project.

Oddly enough, there is a beautiful branding guide linked in the navigation menu. This is amazing, and yet doesn’t seem to be consistently applied across the website.

There is, however, a dedicated forum, but this is hosted on a separate website, and (again) not linked in the main website. Cohesion is paramount. Make things native or at least seamless to navigate to optimise community and userbase growth. A regularly updated blog would be perfect, given the plethora of updates and developments being pushed out elsewhere in snippets. The podcast that is being produced and uploaded to YouTube should also have its own section on the website – make the MonetaryUnit site the one-stop shop for everything MUE; having resources and tools fragmented all over the place does nothing for growth.

Roadmap:

https://tree.taiga.io/project/monetaryunit-monetaryunit/kanban

Whilst not the most user-friendly way to present the MUE roadmap, it is certainly comprehensive and ambitious – as seems to be recurring theme.

Before I dissect the roadmap by sub-section, I’d like to mention that brief descriptions of the goals would be super useful so that new users know exactly what is being focused on and why.

Currently in progress: GSPoint loyalty scheme; MUEX.io (business card cold storage wallets – nice); muewallet.com (web staking wallet); and MUE integration to Coinomi.

Ready for testing: MUE on Ledger; and CryptoFeed.io (altcoin data and statistics).

Live now: Bittylicious integration; MUE 2.0; shared masternodes; Flubit.com integration; and governance system for budgets.

Done: Public block explorer; StartMy.io (crowdfunding for cryptocurrency projects); and MUE Whitepaper (which isn’t linked anywhere, as I’ll come to in the next section).

Ideas: Cloud Staking; web wallet; MUE casino; investment shares; sidechains; and escrow.

Overall, there is a lot to be impressed by in past achievements and much to look forward to going forward, but the roadmap itself could be far more effective at informing new users. Make an infographic version and write brief descriptions of each of the goals, alongside some sort of expected delivery date for each so that progress can be measured accurately by the MUE community.

Whitepaper:

https://docs.google.com/document/d/1r4-LA-GTkmw1YJpw49ru5cAOGllIYzplFSR70FVEsN8/edit

For some reason, the whitepaper is linked nowhere outside of the Taiga roadmap. It is possibly because it is in need of updating (the whitepaper is dated June 2014), but as it is the only whitepaper currently available, I’ll make do.

The whitepaper is brief, at a length of 5 pages, but jargon-free, clear, concise and informative – everything you want in a whitepaper besides a degree of depth. The primary aim of the project is stated immediately: Designed to be a virtual currency accessible to all. Further, the path to achievement of this aim is via an ecosystem of services and apps. This is certainly something that is being upheld by MonetaryUnit.

Contrasts against Bitcoin are provided to highlight the difference between it (often seen as a store of value first and foremost) and MUE (primarily a means of payment). This establishes the use-case. There are then clear points provided on why it is suitable for this purpose (faster block-times, low transaction fees, block size can be increased via governance system etc.). We are then shown the emission model, with 120+ years of supply emission before maximum supply of 4bn MUE is reached. Lastly, an explanation is provided as to how the multilayer Proof-of-Work/Proof-of-Stake hybrid solves potential 51% attacks – MUE is now fully Proof-of-Stake, having suffered a 51% attack last September.

Overall, the whitepaper simply needs fleshing out and updating, but the team are aware of this.

Wallets:

Windows, Mac and Linux wallets are available, as are Android and iOS mobile wallets.

The Windows binary was flagged by Avast but this is common in first launch of Qt wallets. Other than that, the wallet is functional, fairly well-branded (though it could be more visually appealing) and, most importantly, it does not occupy a large amount of CPU when running.

Again, this just needs updating, particularly for a payments-focused coin, as the potential userbase may not be familiar with the user-interface of these wallets. Make it seamless for them to store and transact the coin by redesigning the UI/UX of the local wallets and by providing a web wallet (which is in development).

General:

In general, the most significant development achievements have been the Flubit integration (the significance of which, I believe, is very much underplayed by the market as a whole at present, as a symptom of the macro market conditions) and the various ‘assets’ created by MonetaryUnit to function as services for the utility of MUE. These are StartMy.io, CryptoFeed.io, CoinBuy.io, MUEX.io and, of course, Flubit.com (now that they are as one). Further, I think the migration to fully Proof-of-Stake was the right decision.

As for the future, I look forward to seeing MonetaryUnit on Ledger and to the launch of the cold storage business cards (as this is a potential additional revenue stream). Another, more lucrative, revenue stream would be the MUE casino…

The launch of the web wallet goes without saying as a useful addition to the MonetaryUnit toolbox, as it will greatly streamline the ability to transact in MUE online.

With regards to innovation, that’s not really what MonetaryUnit is about. They’ve hit a home run with their partnership and merger with Flubit, and that is what needs to be capitalised on more than anything going forward…

Lastly, concerning the project’s funding, 10% of the block reward is currently allocated to the budget, amounting to 3.15mn MUE annually, or a little over $60,000 a year. Whilst a solid amount, this is likely not enough to really push the growth of the project, and those aforementioned revenue streams will help alleviate the burden of self-funding and any potential clearout of the budget due to unforeseen future issues. Also, if the price of MUE falls, so does the purchasing power of the budget, and with it fails the ability to continue development. This is a single point-of-failure. I’d strongly suggest thinking about additional revenue streams to those mentioned.

Further, I would suggest going all-in on establishing the brand identity of the project, using mediums such as the podcast (and ideally a blog, also) to generate an audience, inform the community, and ultimately entice customers into transacting with MUE. The ‘15%-off for paying with MUE’ incentive on Flubit.com is a perfect start.

To conclude this section on the fundamentals of MonetaryUnit, I’d also like to implore the team to make the project more cohesive in its various links, tools, components and resources. There must be a clear and smooth path of navigation through the MUE ecosystem.


Technical

Firstly, the Weekly chart depicts something of great interest; the opening price of MonetaryUnit’s price-history on Bittrex (from almost four years ago) has formed a level of support for the current range, indicating a lack of willingness to sell below this historical level.

For further analysis, we must shift our view to the Daily, however. Support at a little over 1000 satoshis has since turned resistance, and MUE’s decline from the highs of summer 2017 (18 months ago) finally looks to have found a bottom. A range has formed between ~300 and ~660 satoshis, which has been in play for around four months. Buying interest seems to be growing, and, around Christmas, over 25% of the circulating supply was traded within 24 hours. These are all the signs of accumulation, made more certain by the earlier rich-list analysis.

With regards to current prices for a long-term position, I’d be a fool to say anything other than that you are effectively paying the same price for MUE today as many did in 2015, except with all the developments and partnerships that have come since at little extra cost. This seems like a low-risk, high-reward proposition to me. I will be entering a long-term position, with an aim of an average 450-satoshi entry price. A higher time-frame close above 1100 satoshis would signal a reversal and the beginning of a new bull cycle, so those who are more risk-averse should perhaps wait until that time…

And thus concludes my analysis of MonetaryUnit.


Conclusion

This report is now over 6,000 words, and it is time to draw it to a close.

My final grading for MonetaryUnit is 7 out of 10. There is clearly a lot of promise for MUE going forward, especially with the recent addition of the Flubit team to their own. And the strong performance in significant metrics, coupled with the current price, cannot go without mention for those of us looking to turn a profit. However, there is much that is restricting the growth of the project, but all of it is seemingly easy to fix, if the team resolve to do so.

Lastly, here is a link to a Google Sheets file with any significant data from previous reports compiled for cross-comparative purposes. I will keep this updated as I continue to write these reports.

I hope this report has proved insightful and that you’ve enjoyed the read! Please do feel free to leave any questions in the Comments, and I’ll answer them as best I can.


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Coin Report #8: Arionum

N.B: This Coin Report has been selected by the readers of the blog, with Arionum winning the poll with 41% of  the ~2,300 votes. Congratulations!

Welcome to the eighth Coin Report. In today’s report, I will be assessing the fundamental and technical strengths and weaknesses of Arionum. This will comprise of an analysis of a number of significant metrics, an evaluation of the project’s community and development and an overview of its price-history. The report will conclude with a grading out of 10. I hope you enjoy the read!

Introduction

Having only recently completed a Coin Report on Bismuth, I found it rather amusing that this next one – as selected by the community – will be on Arionum, for reasons that will become evident as the report progresses. In short, both projects are unique, first-of-their-kind cryptocurrencies, written from scratch in their respective languages. As such, I feel as though chance has given us a good opportunity for a true and thorough cross-comparison. This report will follow the regular template in its composition, but it would be negligent not to draw comparisons where appropriate.

As mentioned above, Arionum is one of those rare cryptocurrencies that is built from the ground up, and thus I was quite excited to find that it had won the community poll. That being said, aside from this singular fact, I knew relatively little about the project prior to conducting my research for this report. Having now completed this research, there is much to be excited by but certainly areas where improvement is required; eerily enough, these areas correspond with those of Bismuth.

I hope this report will prove objective where it must be and fair on more subjective matters. For those who’d like to learn a little more about Arionum prior to reading this report, here are some primary links:


Fundamental

General:

Name: Arionum

Ticker: ARO

Algorithm: Argon2i + SHA512

Sector: PHP Blockchain Platform

Exchanges: Mercatox

Arionum was launched in January 2018 – oddly enough around the time of the market peak – with no premine and no ICO. It was written from scratch in PHP; the first cryptocurrency of its kind. The coin operates using a Proof-of-Work consensus mechanism on a combined Argon2i + SHA512 hashing algorithm. It also operates using masternodes with a collateral of 100,000 ARO. The Proof-of-Work phase is expected to last ~8 years from launch, with the block reward beginning at 1,000 ARO and decreasing by 10 ARO every 10800 blocks. We’ll dig into supply emission and the block reward schedule a little later.

Of all the coins I have written reports on, Arionum has the least available price-history, with data going back only four months – to the beginning of August. Despite that, Arionum has experienced two short market cycles, setting an all-time high of 734 satoshis ($0.048) at the end of October. Price has since dropped off, setting a local low of 236 satoshis late in November. More on this in the Technical section.

Arionum, as a project, is primarily concerned with streamlining the development process for those familiar with PHP, relative to other programming languages. Further to that, and more applicable to the layman user, Arionum seeks to drastically reduce transaction costs and improve upon the scalability issues found in Bitcoin. Lastly, its future is concerned with developing a graphical interface for asset creation, allowing less technical users to develop their own digital assets and currencies.

That should suffice as a general overview of the project; onto some metrics:


Metric Analysis:

Below are listed a number of important metrics, all of which are accurate as of 13th December 2018. For anyone reading this who has yet to read a Coin Report, it might be worth reading this section of the first report, where any potentially unfamiliar terms are explained. For any terms or metrics specific to this post, I will provide explanations besides the figures.

Metrics:

General:

Price: $0.012 (341 satoshis)

Exchange Volume$67,581

Circulating Supply: 115,801,450 ARO (I have used the figure found on the block explorer for this, as there is a discrepancy between it and the figure found on Coinmarketcap)

Total Supply: 115,801,450 ARO

Maximum Supply: 545,399,000 ARO

% of Max. Supply Minted: 21.23%

Network Value: $1.341mn (394.88 BTC)

Network Value at Max. Supply: $6.32mn

Category: Midcap

Exchange Volume-to-Network Value: 5.04%

Average Price (30-Day): $0.014

Average Exchange Volume (30-Day): $48,992

Average Network Value (30-Day): $1.048mn

Average Exchange Volume (30-Day)-to-Network Value: 4.67%

% Price Change USD (30-Day): -57.7%

% Price Change USD (1-Year): N/A

USD All-Time High: $0.048

% From USD All-Time High: -75.6%

Premine % of Max. Supply: 0

Premine Location: N/A

Liquidity (calculated as the sum of BTC in the buy-side with 10% of current price across all exchanges): 0.575 BTC

Liquidity-to-Network Value %: 0.15%

Amount Available on Exchanges: 2,146,982 ARO

% of Circulating Supply Available on Exchanges: 1.85%

Update: I have been informed that the all-time high was actually $0.23, as sourced via https://www.livecoinwatch.com/price/Arionum-ARO

Supply Emission & Inflation:

Block Reward Schedule: Block rewards began at 1000 ARO, and decrease 10 ARO every 10800 blocks (~30 days). 8 years 4 months for entire PoW phase. Current block reward = 880 ARO for 7491 more blocks (~21 days).

Average Block Time: 4 minutes

Current Block Height: 122109

Annual Supply Emission: 107,838,480 ARO (367.73 BTC at current prices)

Annual Inflation Rate: 93.12%

Circulating Supply in 365 Days: 223,639,930 ARO

Staking & Masternodes:

Note: I have used this source for some data on masternodes. For further info on Arionum’s masternodes, take a look here.

Masternode Price: $1,158.86

Masternode Collateral Size: 100,000 ARO

Masternode Count: 427

Supply Locked in Masternodes: 42,700,000 ARO

Masternode Count Growth (30-Day): N/A

Masternode ROI (Annual): 83.34%*

Masternode Reward / Block Reward: 33%

Masternode Network Value$494,832

MNV / Network Value: 36.87%

*To calculate annual ROI based on current active masternodes: (Annual Supply Emission x (Masternode Reward / Block Reward)) / Supply Locked in Masternodes = (107,838,480 x 33%) / 42,700,000 = 0.8334 =83.34%

Distribution:

Address Count: N/A

Supply Held By Top 10 Addresses: 12.91% (discounting 1st-richest, which is Mercatox and contains ~13mn ARO)

Supply Held By Top 20 Addresses:  17.36%

Supply Held By Top 100 Addresses: 30.03%

Inactive Address Count in Top 20 (30 Days of No Activity): 10

Analysis:

There’s a mountain of material to cover here, and I’ll begin with the General metrics, before moving on to sequentially unpack the rest.

Firstly, let’s take a look at the price-and-volume-related metrics: Arionum is currently trading at a Network Value (here meaning price x circulating supply) of $1.341mn, or 394.88 BTC. This would place it in the lower-midcap range of altcoins. The Average Network Value for the past 30 days is a little lower at $1.048mn, despite the price of Bitcoin decreasing significantly in the past month, indicating that Arionum has been faring well against Bitcoin recently, as we shall discover a little later. The Exchange Volume for the past 24 hours comes in at $67,581, whilst Average Exchange Volume is ~$49k. This gives Arionum an Exchange Volume-to-Network Value of 5.04%, and an Average EVNV of 4.67%. This is very impressive. In prior reports, I have mentioned that I tend to look for altcoins with 1% or greater for these metrics as a sign of significant interest, but current market conditions have made such scenarios sparse. Well, Arionum seems to have plenty of interest despite such conditions and despite the fact that it is only traded on one exchange: Mercatox. Further, Arionum actually beats out any coin previously reported on with regards to this particular metric, with Stakenet coming in second place with 2.33% EVNV and 1.48% Average EVNV. As I say, this is a promising start.

The next point-of-interest from the General metrics is Liquidity and the metrics relating to supply available on exchanges: Arionum has Liquidity of around 0.15% of the Network Value, which places it in the middle of the pack relative to other coins reported on. Further, there is a little over 2.1mn ARO available for purchase in the Mercatox orderbooks, which equates to 1.85% of the circulating supply. Of the four coins I have previously calculated this metric for, Arionum has less of the circulating supply available than three of them, suggesting that there is a relatively high inclination towards holding ARO. The masternode returns may be a contributing factor to this, as I’ll highlight shortly.

A final point to highlight from the General subsection before we move onto Supply Emission & Inflation: there is zero premine, which I always like to see.

Now, calculating supply emission and inflation metrics is fairly straightforward for Arionum, as it has a simple block reward schedule. Using an average block time of 4 minutes, a current block reward of 880 ARO and a decreasing block reward of 10 ARO every 10800 blocks, the supply emission for the next 365 days works out at ~107,838,480 ARO, or 367.73 BTC at current prices. This equates to an annual inflation rate of 93.12%. Without doubt, this is rather high and a little worrying for those of us who are potentially looking to turn a profit on a position in Arionum. In fact, this is the highest inflation rate for any coin I’ve reported on.

But how does the supply emission relate to the volume that Arionum is generally trading? Well, with an annual supply emission of 367.73 BTC at current prices, average daily supply emission works out at almost exactly 1 BTC, or ~$3398. Arionum’s trading volume (Exchange Volume) for the past 24 hours is ~1988% greater than this supply emission, and its Average EVNV is ~1442% greater. This is ample trading volume to cover the supply being minted daily, and thus current prices should be sustainable if current levels of volume persist. Thus, any decrease in price should generally be attributed to either smart-money distribution or weak-hand distribution, rather than to miners dumping their rewards, and this could be more precisely determined using rich-list analysis. This is also roughly 5 times greater volume-to-supply emission than I found in Bismuth, despite Bismuth having half the annual inflation rate of Arionum.

Moving onto masternodes, Arionum offers an annual return on its masternodes of 83.34%, calculated using figures for current active masternodes, annual supply emission and the percentage of the block reward that is distributed to masternodes. This is a very high return, and unsurprising given the high inflation. It is actually the highest annual ROI of any masternode from previous reports.

Next, let us consider the strength of the Arionum masternode network: with 427 active masternodes and a collateral size of 100,000 ARO, this gives us 42.7mn ARO locked in masternodes. This equates to a Masternode Network Value of $494,832, which is 36.87% of the Arionum Network Value. This is indicative of a moderately strong masternode network, as it is stronger than the masternode network of Bismuth and Stakenet but weaker than Bulwark and ALQO.

Finally, let’s take a look at Distribution:

As Arionum states in its whitepaper, “the goal is to be… democratically spread across non-professional miners.” In short, decentralisation is key, and this seems to be a point of strength for the project. Discounting the richest address, which is owned by Mercatox and contains ~13mn ARO, the top 10 richest addresses control 12.91% of the supply. The top 20 control 17.36% of the supply and the top 100 control 30.03%. This is slightly more decentralised distribution than Bismuth, which (discounting its richest address, which is owned by Cryptopia) had the top 10 controlling 16.44% of the supply.

Let’s dive a little deeper into the Arionum rich-list. 10 of the top 20 addresses have been inactive for the past 30 days, whilst the 4th, 10th, 13th, 17th and 19th-richest addresses are in active accumulation. Only the 11th-richest is distributing at current prices and the remaining addresses have shown negligible activity recently. This shows that the vast majority of the richest holders are either accumulating or holding at present, which is a good sign.

That concludes this section on metrics. Let’s dissect the Arionum community:


Community:

There are two primary aspects of community analysis: social media presence and Bitcointalk threads. I’ll begin with the former before moving on to the latter.

Social Media:

Concerning social media presence, there are four main platforms to examine: Twitter, Facebook, Telegram and Discord.

Arionum is present on all four platforms. To begin, let’s look at the various social metrics that I calculated from the Arionum Twitter and Facebook accounts:

Twitter Followers: 1994

Tweets: 174

Average Twitter Engagement: 2.1%

Facebook Likes: 36

Facebook Posts (30-Day): 0

Average Facebook Engagement: N/A

As usual, I will be using RivalIQ‘s social benchmark report for evaluation purposes.

Firstly, I’d like to point out that despite Arionum having a Facebook page, it seems to be out of use, with no posts showing since April. This isn’t great, as it suggests that the team thought Facebook important enough to create a page but not important enough to spend the time it takes to maintain it.

That being said, Arionum does seem to have some solid engagement on Twitter. It has quite a small audience of just under 2,000 followers (relative to Bismuth’s ~7k followers) and the team are relatively inactive with less tweets than any other project I’ve written a report on besides Dero. But, their Average Twitter Engagement rate is 2.1%, which is stronger than all except Dero, funnily enough. The engagement level is roughly 3x that of Bismuth.

Further, using the RivalIQ report, we can see that Arionum has 45.65x more engagement than the average across all industries, and over 161x greater engagement than the Media industry. The engagement is certainly promising, but the audience is small.

Now, moving onto Discord, Arionum has 3023 members in its group, which is slightly larger than Bismuth’s group. 53 new members joined in the past week, which equates to 1.75% weekly growth. There are plenty of channels available under relevant subsections for all manner of topics, which I like to see as it ensures accessibility for newer users. Further, there is an FAQ channel with all resources clearly linked.

With regards to the content of the group, Announcements seems to be updated more regularly this month than previously, with an update every two or three days in December but only one update in November. Development is fairly active with some discussion taking place on a daily basis, most recently concerning a phishing incident that occured a few days ago and led to some users of the web wallet and Android wallet losing their funds. Suggestions is currently on the topic of Ledger integration for Arionum, which would be great to see. I found very little of interest in Marketing, which may explain the smaller audience across platforms for the project. There is a lot of action occuring in the OTC channels; this makes sense given that there is only one listed exchange.

As usual, General is the most popular channel, with near-constant conversation taking place. Of late, this revolves around the phishing incident, understandably. There is a little talk on the need for new exchange listings; a listing on Cryptopia is confirmed. Much of the back-and-forth is currently about convenience versus security, and many feel as though the team’s decision to disable the affected wallets is a step backwards for the project as it dramatically reduces the potential userbase to only those with some degree of technical proficiency, given the PHP codebase. I’m inclined to agree, though there is a GUI Lightwallet available for Windows users. There is also some degree of backlash arising around communication and the team not using the community to its full capacity to assist with the project. The positive here is that the community certainly seems willing and engaged. Finally, there is some talk about a cross-platform wallet currently in development for Mac, Windows, Linux, iOS and Android, which sounds promising. Overall, the group is highly active but, at present, in minor crisis.

Unlike its engaged Discord group and Twitter account, Arionum’s Telegram group follows the footsteps of its Facebook page, with 392 members but only a handful of daily messages. In general, the Telegram doesn’t seem to be used for much besides the odd support query. Strangely enough, this is exactly what I found to be the case with Bismuth – a strong Discord and a neglected Telegram.

BitcoinTalk:

The Arionum BitcoinTalk thread was created on January 8th, 2018, and has since generated 2175 posts spanning 109 pages in 339 days, giving an average of 6.4 posts per day. However, in the past 90 days, the thread has had 183 posts via ~40 individual posters, giving an average of a little over 2 posts per day, suggesting that activity has died down of late. That being said, 183 posts in the past 3 months is still more activity than most of the coins I’ve previously reported on.

That concludes the section on Community. Onto Development:


Development:

For the following Development analysis, I will be evaluating project leadership, the website, the roadmap, the whitepaper, the wallets and finally providing a general overview:

Project Leadership:

There is no clear information on the team displayed on the website, and there are 4 contributors to the Github. An FAQ on the forum shows that there are 3 core developers, with 27 years of programming experience between them, specialising in PHP and Linux. There is very little expertise in marketing and none in project management. I would like to see this balanced out a little; perhaps adding a marketing specialist or an operations manager would assist in growing the userbase.

Website:

The website is fairly well designed and branded, and it is informative for new users, with a thorough overview of the project displayed and relevant resources linked. There is also a dedicated forum, which is a plus. That being said, it looks a little amateurish relative to the websites of other cryptocurrencies (a problem I also found with Bismuth’s website). Further, there is no clear link to the Arionum wallets. In general, I’d like to see a redesign for the website and a regularly updated blog.

The block explorer, in contrast, is fantastic. It is highly functional with a plethora of useful features and a visually appealing interface. More of this, please.

Roadmap:

There is no roadmap to be found on the website or the BitcoinTalk thread, which is highly disappointing.

Update: I missed that there is a text-based roadmap in the BitcoinTalk announcement. Everything besides the payment processor and the assets system has been achieved.

Whitepaper:

https://www.arionum.com/wp.pdf

The Arionum whitepaper is more like a lightpaper, as it is only 2 pages in length. I know I like my whitepapers concise rather than lengthy but this might be a little too brief. The whitepaper is in need of proof-reading and makes little mention of the future direction of the project; of its goals and aims;  or of its unique features. Its redeeming quality is that it does talk briefly about Arionum’s advantages over Bitcoin, with regards to dynamic block sizes, fixed fees and a CPU-optimised hashing algorithm. It also mentions that Arionum will be developing a graphical interface for asset creation, in an attempt to alleviate the problems faced by non-technical users in creating their own digital assets and currencies. There needs to be much more detail on such an interesting aspect of development such as this.

Overall: again, rather disappointing. It seems as though the resources and platforms that are most useful in growing a userbase (social media, roadmap + whitepaper) are neglected by the Arionum team.

Wallets:

With regards to wallets, there is a CLI for Windows, Mac and Linux, as well as a GUI Lightwallet for Windows and Mac, a web wallet and an Android wallet. The latter two are currently disabled due to the phishing incident.

General:

Generally, it is quite difficult to judge the development progress of the project without a corresponding roadmap or a detailed whitepaper. Obviously, the stand-out achievement is writing the blockchain from scratch in PHP; a first for any cryptocurrency. But, since this point, there doesn’t seem to have been any stand-out development achievements, and, if there are, they’re well-hidden.

Looking forward, the graphical interface for asset creation piques my interest but, again, there must be more detail available for those that come across Arionum in order to grab their attention and grow the coin’s userbase.


Technical

Despite having only four months of available price-history, the Arionum chart exhibits two short-term market cycles. Price initially formed a local high at ~700 satoshis before dropping off to form its all-time low at 77 satoshis, completing its first mini market cycle. Price then formed a short-term accumulation range between 180 and 230 satoshis before breaking out, climbing above the pivot are around 330 satoshis, all the way to new all-time highs at 735 satoshis. We have since seen a similar drop-off to that of the first cycle, though this time price has formed a higher-low around 230 satoshis – the breakout level from the previous accumulation range. Minor levels of prior resistance continue become new support levels as ARO/BTC has climbed for the past couple of weeks, with price now sitting within that pivot area.

A swing trade could possibly be available here, with ~30% of downside if a soft stop is placed at that local swing-low ~230 satoshis. There is ~120% of upside potential to the all-time high, giving a reward-to-risk of 4:1. However, for those looking for more of a long-term position, buying below this pivot area has generally been rewarded and volume has continued to steadily rise for the past few months. Inflation is naturally a worry, but the trade volume is certainly sufficient to sustain current prices.


Conclusion

This report is now approaching 4,000 words, and it is time to draw it to a close.

My final grading for Arionum is 6 out of 10. It is quite clear that there is promise here, not only with regards to the project being written from scratch and being the first of its kind, but also in the engagement shown on Twitter and in the Discord group, as well as the strength shown in many of the metrics. But there is a lot to be improved on.

Lastly, here is a link to a Google Sheets file with any significant data from previous reports compiled for cross-comparative purposes. I will keep this updated as I continue to write these reports.

I hope this report has proved insightful and that you’ve enjoyed the read! Please do feel free to leave any questions in the Comments, and I’ll answer them as best I can.


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Coin Report #7: Bismuth

N.B: In the spirit of full transparency, the following Coin Report is the third Sponsored Post on my blog. The Bismuth team recently contacted me with a request to write up a Coin Report on the project. After they had agreed to my sole stipulation that this report would conform to the rigour of the previous reports, with all strengths and weaknesses being explored and evaluated, I agreed to write the report. Regarding future Sponsored Posts, I have 2 spots open before the end of January 2019. If you would like a Coin Report written for a project, please ask the team to get in touch. Further, next week’s Coin Report will be selected via community choice: vote here to choose which altcoin you want featured.

Welcome to the seventh Coin Report. In today’s report, I will be assessing the fundamental and technical strengths and weaknesses of Bismuth. This will comprise of an analysis of a number of significant metrics, an evaluation of the project’s community and development and an overview of its price-history. The report will conclude with a grading out of 10. (These reports were previously graded out of 5.) I have also included a spreadsheet with any significant figures and metrics from previous reports at the end of this one for cross-comparative purposes. The previous reports will have a grading out of 10 assigned, too. I hope you enjoy the read!

Introduction

Bismuth is a project that has been on my radar for quite a while now for a multitude of reasons that I’m sure we’ll delve into later. The primary reason, however, is that it is one of the rare cryptocurrencies that has been entirely written from scratch, and one of even fewer cryptocurrencies that is truly innovative in its form.

Having now completed my research for this report, there is much I am excited about and much I would like to address regarding where I think the project is falling short. I believe this report will serve to illuminate what I feel is strong development, in particular, that is flying under the radar, and weak marketing, as we’ll discover. Overall, I hope it will prove objective concerning the facts and fair with regards to more subjective aspects of the report.

If you’d like to find out a little more about Bismuth prior to reading on, here are some primary links:


Fundamental

General:

Name: Bismuth

Ticker: BIS

Algorithm: SHA224

Sector: Decentralised Applications Foundry

Exchanges: Cryptopia, Qtrade & TradeSatoshi

Bismuth was launched in May 2017 with no ICO and no premine, and was written from scratch in Python; the first cryptocurrency of its kind. The coin operates on a Proof-of-Work consensus mechanism under the SHA224 algorithm, with Hypernodes that operate on a separate, secondary blockchain under a Proof-of-Stake consensus mechanism. The Proof-of-Work phase will last ~13.5 years post-launch. Much like Dero, from the previous Coin Report, Bismuth has a progressively diminishing block reward. We’ll get into how this affects supply emission in the following section.

Having been launched over 18 months ago, Bismuth has a little more meat to its price-history than many of the coin I’ve recently written reports for. It has experienced a full market cycle, finding its peak of ~64k satoshis in January 2018, as the vast majority of alts did. Bismuth has since followed the trajectory of the entire market and experienced a slow bleed from those highs to the prices we see today. More on this a little later…

As a project, Bismuth seems very much focused on attracting the more technical users in the space, at least for the time being, as I’m sure you’ll agree as we traverse through this report. In their own words, “Bismuth is trying to be the blockchain lego… Bismuth is trying to be modular, extensible and as simple as possible with only about 2400 lines of code.” This is a developer’s dream, one would imagine, but it does come with some difficulties for the layman, as we’ll discover. Let us take a look at just how well Bismuth is doing after ~18 months in existence:


Metric Analysis:

Below are listed a number of important metrics, all of which are accurate as of 4th December 2018. For anyone reading this who has yet to read a Coin Report, it might be worth reading this section of the first report, where any potentially unfamiliar terms are explained. For any terms or metrics specific to this post, I will provide explanations besides the figures.

Metrics:

General:

Price: 6906 satoshis ($0.28)

Exchange Volume (24H): $18,197

Circulating Supply: 14,124,968 BIS

Total Supply: 14,838,112 BIS

Maximum Supply (After PoW phase excluding 10% Dev Fund rewards): 63,922,918 BIS

% of Max. Supply Minted: 23.21%

Network Value: 975.47 BTC ($3.925mn)

Network Value at Max. Supply: $17.764mn

Category: Midcap

Exchange Volume-to-Network Value: 0.46%

Average Price (30-Day): $0.47

Average Exchange Volume (30-Day): $15,388

Average Network Value: $6.533mn

Average Exchange Volume-to-Average Network Value: 0.24%

% Price Change USD (30-Day): -49.6%

% Price Change USD (1-Year): –73%

USD All-Time High: $8.94

% From USD All-Time High: -96.8%

Premine % of Max. Supply: 0 (10% Dev Fund Rewards)

Premine Location: 4edadac9093d9326ee4b17f869b14f1a2534f96f9c5d7b48dc9acaed 

Liquidity (calculated as the sum of BTC in the buy-side with 10% of current price across all exchanges): 0.753 BTC

Liquidity-to-Network Value %: 0.08%

Amount Available on Exchanges: 693,273 BIS

% of Circulating Supply Available on Exchanges: 4.91%

Staking & Masternodes:

Note: Bismuth masternodes are referred to as Hypernodes, and are available with collateral of 10k BIS, 20k BIS or 30k BIS. For the purposes of these metrics, I am using 10k BIS collateral for the calculations. Further, I have used https://hypernodes.bismuth.live/?page_id=21 for masternode data. For more info on Hypernodes, see https://github.com/bismuthfoundation/Bismuth-FAQ/blob/master/Hypernodes/HyperNodes_FAQ.md.

Masternode Price: $2,779.03

Masternode Collateral Size: 10,000 BIS

Masternode Count: ~430

Masternode ROI (Annual): ~9.78%*

Masternode Reward / Block Reward: Rewards proportional to collateral. 0.8 BIS per block attributed to Hypernodes. 1152 BIS per day.

Supply Locked in Masternodes: ~4,300,000 BIS

Masternode Network Value: $1.194mn

MNV / Network Value: 30.44%

*To calculate minimum annual ROI for Hypernodes: Annual Hypernodes Emission / Supply Locked in Hypernodes = 420,480 / 4,300,000 = -.09778 = 9.78%

Supply Emission & Inflation:

Note: I have used https://github.com/hclivess/Bismuth/blob/master/bismuth-supply.md for supply emission information. Bismuth supply emission is quite unclear across different sources but this was provided to me by the team as the most updated source. The table at the bottom of the link is useful.

Block Reward Schedule: Diminishing block rewards from 15 at block 1 to 0 at block 7,100,000. Current block reward is ~12.32. Total supply from PoW phase = ~63.9mn BIS + 10% for Dev Fund = 10.371 BIS average block reward during PoW. 0.8 BIS reward per block for Hypernodes, starting at block 800,000 and taken from PoW block reward. 420k BIS per year emission post-block 10,000,000.

Average Block Time: 60 seconds

Current Block Height: 936575

Annual Supply Emission: using the current block reward of 12.32 BIS to provide a maximum annual supply emission: 12.32 * 1440 (blocks per day) * 365 = 6,475,392 BIS (447.19 BTC at current prices). Note that this is a maximum figure for emission, as rewards decrease with each block.

Annual Inflation Rate: 45.84%

Circulating Supply in 365 Days: 20,600,360 BIS

Note: below are printed two inflation curves sourced from the Bismuth Bitcointalk ANN:

Distribution:

Address Count: 2566

Supply Held By Top 10 Addresses: 49.11% (the top address is Cryptopia)

Supply Held By Top 10 (minus Cryptopia): 16.44%

Supply Held By Top 20 Addresses:  53.96%

Supply Held By Top 100 Addresses: 71.27%

Inactive Address Count in Top 20 (30 Days of No Activity): 14

Analysis:

Now, there’s a lot to get through here, and much that is more difficult to untangle than in previous reports. As stated in the section on Staking and Masternodes, Bismuth operates using its own custom-built Hypernodes, which vary in collateral. As such, I have used a 10,000 BIS collateral-equivalent for the purposes of metric calculation. Further, Bismuth is particularly difficult to find clear and updated supply emission information for, as they have recently reduced inflation plus some sources are out-dated.

All the above being said, there is a lot of interesting data here to unpack. I’ll work my way through the metrics from General, before moving onto Staking and Masternodes, followed by Supply Emission and Inflation and I’ll conclude with some rich-list analysis:

To begin, let’s take a look at Bismuth’s recent volume-related data and how it relates to Network Value. Bismuth is currently trading at a Network Value of ~975 BTC or $3.925mn, but experienced a little over $18,000-worth of Exchange Volume over the past 24 hours. This gives Bismuth an Exchange Volume-to-Network Value of 0.46%. This is lower than I tend to like to see, as frequent readers of these reports will know; but, when the current market uncertainty and general environment of low volume is taken into consideration, it’s not too bad at all.

The Average Exchange Volume for the past month has been $15,388 daily, which equates to 0.24% of the Average Network Value for the past month of $6.533mn. Now, there are a couple of things to note here: firstly, it is during market conditions like this that I wish I could determine these values using Bitcoin-based data rather than Dollar-based data, as the rapid decline in BTC/USD over the past couple of weeks is undoubtedly skewing these calculations; secondly, the fact that Average EVNV is a little over half that of EVNV suggests that interest is perhaps picking up recently at current prices.

That being said, we must do some cross-comparison for further clarification: Bismuth’s EVNV of 0.46% places it in the middle of the pack, relative to previous coins reported on – it is higher than ALQO, GeoCoin and Bulwark but lower than Covesting, Stakenet and Dero. Bismuth’s Average EVNV of 0.24% is a little weaker than this, with it beating out GeoCoin and ALQO but not the others. Overall, the market interest in Bismuth seems moderate.

Now, another point-of-interest to note from the General metrics is everything related to price. Current prices of $0.28 or ~6900 satoshis are almost 97% below the all-time high of $8.94. This presents almost 3200% of upside potential if Bismuth was to ever set a new high. We’ll dive into more on this when we look at the chart later.

Lastly, from the General section, let’s look at Liquidity and the supply that is currently sitting on exchanges. Bismuth has Liquidity of around 0.08%. This is low, but likely a symptom of the current market uncertainty as much as anything else. When comparing Bismuth with coins from previous reports, it actually has the lowest Liquidity of the seven coins. Further, there is around 4.91% of the circulating supply current available for purchase on exchanges. This is higher than all three coins (Stakenet, Bulwark and Dero) for which this metric was previously calculated. The reasoning behind this may simply be that there is less incentive to hold Bismuth than Stakenet or Bulwark at present because of the higher returns offered by their masternodes. Regardless, it does seem that Bismuth is less attractive to buyers right now than other coins I have written reports on, for whatever reason. Of course, this can be a sign of undervaluation and thus a potentially profitable opportunity may be presenting itself; but this can only be confirmed once the fundamentals and technicals have been fully evaluated, and once we know what so-called ‘smart-money’ is doing with Bismuth.

Now, let’s move onto the Hypernodes. The first point to consider is the annual ROI for running a Hypernode, which I calculated to be around 9.78% using 10,000 BIS collateral. This is, as mentioned above, a lower annual return than some of the other masternode coins I’ve written about: ALQO had an ROI of 53.15%; Bulwark of 59.39%; and Stakenet of 21.32%. This lower return for running a Hypernode may, however, manifest as a positive for inflation.

Next, let’s consider the strength of the Hypernode network: there are ~430 10,000 BIS-equivalent Hypernodes online, equating to 4.3mn BIS locked in the network. This works out as $1.194mn for the Masternode Network Value, which equals 30.44% of the Network Value. This is a moderately strong figure, and is greater than that of Stakenet but lower than that of ALQO or Bulwark. Overall, the Hypernode network seems stable but with plenty of room for growth. This may also be a symptom of the fact that Hypernodes have only been integrated for a little over 3 months, as we’ll discuss at length in the Development section.

Moving onto Supply Emission and Inflation, I find it quite interesting that Bismuth has progressively-diminishing block reward, like Dero, meaning that its inflation rate drops incrementally with each new block. The current block reward is ~12.32 and the reward will taper off to 0 at block 7,100,000. I have used the current block reward to determine maximum supply emission and inflation figures, as, of course, these rewards are not static. Using the current reward of 12.32, around 6.475mn BIS will be minted at most over the next year, which equates to 447.19 BTC at current prices. This gives Bismuth a maximum annual inflation rate of 45.84%. This is lower than that of Bulwark and Dero but greater than that of Stakenet, ALQO, Covesting (an ICO token with 0 inflation) and GeoCoin. Once again, this is a moderate level of inflation, though actual annual inflation will be lower than what I’ve calculated for Bismuth.

Let’s see how this amount of supply emission relates to Bismuth’s volume-related metrics: 447.19 BTC of annual supply emission at current prices equates to 1.225 BTC of daily supply emission, on average (or ~$4,929). Bismuth’s Exchange Volume covers this ~369%, and its Average Exchange Volume covers this by ~312%, indicating that there is ample trading volume to sustain current prices despite the daily supply emission.

To conclude this lengthy section, let’s talk about Distribution. Bismuth has 2566 holders. Of these, the top 10% control 49.11% of the supply, though the richest address is Cryptopia and so we may discount that from our calculations. The top 10% minus Cryptopia control 16.44%, with the 2nd-richest address being Development Funds. This is greater decentralisation of supply than Covesting or Stakenet but weaker than ALQO or Bulwark.

More importantly than that, however, is the activity of the richest addresses. Of the top 20 richest addresses, 14 have been inactive for the past month, implying that those holders are content with their position sizes and are not actively accumulating or distributing at current prices. The 5th-richest address has been inactive for the past month also but distributed 100,000 BIS in October. The 7th-richest has distributed 60,000 BIS in the past 6 weeks. The 11th-richest has distributed 11,000 BIS recently and the 18th-richest is in active accumulation. Overall, it seems that the majority of the largest holders are quite happy with their holdings.

That concludes this section on Metric Analysis. Onto the Bismuth community:


Community:

There are two primary aspects of community analysis: social media presence and Bitcointalk threads. I’ll begin with the former before moving on to the latter.

Social Media:

Concerning social media presence, there are four main platforms to examine: Twitter, Facebook, Telegram and Discord.

Bismuth is present on all four platforms. To begin, let’s look at the various social metrics that I calculated from the Bismuth Twitter and Facebook accounts:

Twitter Followers: 7140

Tweets: 3361

Average Twitter Engagement: 0.68%

Facebook Likes: 630

Facebook Posts (30-Day): 20

Average Facebook Engagement: 0.68%

As usual, I will be using RivalIQ‘s social benchmark report for evaluation purposes.

Bismuth is very active on Twitter, with 3x more tweets than the 2nd-most active coin from my previous reports, Stakenet. Its Average Twitter Engagement rate is also quite strong at 0.68%: this is almost 5x greater than that of GeoCoin and a little over 50% greater than that of Bulwark, but is lower than Covesting, ALQO, Stakenet and Dero. It is also 14.78x greater than the average across all industries, according to RivalIQ’s report, and ~52x greater than that of the Media industry.

Further, Bismuth seems committed to having a cross-platform audience, smaller though it may be on Facebook. They tend to post at least once every other day and, strangely enough, have an equivalent engangement rate to that of their Twitter page. This engagement rate of 0.68% is greater than that of GeoCoin and Covesting but weaker than Bulwark and Stakenet. It is also 425% greater than the engagement across all industries and 850% greater than that of the Media industry. Promising.

Now, onto the Bismuth Discord: the group has 2895 members, which is moderate in size. There are plenty of channels for relevant topics. Of these, the News channel is generally updated every other day, whilst Links contains a list of useful resources for newbies. As tends to be the way, General is where the vast majority of discussion takes place: there seems to be some sort of conversation on a daily basis, though some days are a little sparse; there are around 30 members of the group actively involved in discussion, which is around 1.04% engagement; and there’s a little support-focused back-and-forth with promptly answered queries, but much of the conversation centred on Hypernodes, which is useful in highlighting the benefits of buying and holding Bismuth for new users. It was also great to see a question about Bismuth’s utility answered with lots of insightful points about its codebase and out-of-the-box DApps.

In general, much of the conversation I saw was focused on more technical aspects of the project; there was little-to-nothing on marketing Bismuth or on the future direction of the project. I’d like to see more content like the Hypernode explanation video, as this is critical in growing a project’s user-base. Speaking of Hypernodes, the dedicated channel for these is rather active, with lots of users getting swift support in setting up their nodes. Exchanges highlights a recent listing on TradeSatoshi, whilst the most interesting channel – Suggestions – is not active enough, though it’s good to see the community getting involved in the development process and the team being receptive. More of this would be great. Overall, it’s a solid Discord group.

Moving onto Telegram, Bismuth doesn’t fare so well here. There are 333 members, with 7 new members in the past week, which is around 2.1% growth. This isn’t so bad. The problem is that there have been less than 50 messages across those 7 days, and the majority of those are about the Discord group. I’m guessing the Telegram group isn’t of much importance.

BitcoinTalk:

The Bismuth Bitcointalk thread was created on May 1st, 2017, and has since generated 2742 posts across 138 pages, with an average of 4.71 posts per day. Further, there have been 155 posts in the past 90 days via 39 individual posters.

Regarding the content of the thread, there does seem to be quite a lot of excitement about the launch of Hypernodes and general interest in the future of Bismuth. The community are also quite happy to answer any questions from newbies swiftly and informatively. There are regular, succinct updates on the thread from the team, and the roadmap is visible in recent posts; all of this serves to improve  userbase growth, as those new to the project can see exactly what is going on and the consistency of development. Further, there was an issue flagged with false positives on antivirus software and this was quickly resolved by the team. Overall, the thread is highly informative and fairly active.

That concludes the section on Community. Onto Development:


Development:

For the following Development analysis, I will be evaluating project leadership, the website, the roadmap, the whitepaper, the wallets and finally providing a general overview:

Project Leadership:

Concerning project leadership, there are 10 core members listed on the website. This is a larger core team than that of most of the coins I’ve previously written about. This team is comprised of 2 advisors with experience in programming and cryptography; 1 member who is focused on design; 1 who has experience in service operations; 1 in engineering; 1 in tool development; 1 in research and development; 1 in testing; and 2 core developers. There is a lot of strength and breadth here in development, but little in marketing, which explains why Bismuth isn’t as popular as it perhaps should be. This is another similarity shared with Dero, though they are two very different coins; a concerted effort in developing a great product but no specialists in the team to capitalise on it and push it to the largest userbase possible.

Website:

www.bismuth.cz

The website isn’t particularly great, with relatively poor UI/UX. That being said, it is very informative and comprehensive in its detail on the project itself. What I would like to see is stronger branding, cleaner web design and resources that are clearly linked or segmented; for example, the wallets are linked under the Projects tab, which isn’t intuitive. Overall, I think the website just needs updating and redesigning.

The explorer, however, is very useful and highly functional, which speaks to the focus on utility and development rather than marketing and growing the userbase.

The website is the first point-of-reference for many, so this does need more attention. Ideally, I’d like to see a dedicated, regularly-updated blog.

Roadmap:

https://bismuth.cz/roadmap/

The Bismuth roadmap is great on many counts and not so great on a few counts. I really like that there is a complete history of the project provided, as well as a visually appealing roadmap for present and future endeavours.

Beginning with the historical roadmap, I’m not so keen on the lack of a visual representation for the information but it is still very informative and clearly segmented. May 2017 saw the successful launch of Bismuth; support for messaging (encrypted and unencrypted); and the launch of a mining pool. September 2017 saw a decentralised token layer integrated. From November 2017, Bismuth saw an expansion of the development team; a period of refining the codebase; and proof-of-concept development for Hypernodes. Beginning in February 2018, the project implemented codebase modularity; exchange compatibility; a tiered mempool; more focus on graphic design; a html wallet and cold storage; and continued to develop Hypernodes. At this point of reading the roadmap, I felt that the project is very much targeted at highly technical users that have some familiarity with programming terminology rather than layman. It would be useful for those new to cryptocurrency to have some sort of brief explanation of these developments provided in jargon-free prose.

In September 2018, Bismuth published a roadmap update in the form of a more accesible visual graphic. This is far more useful. H2 2018 (the second half of the year) saw a new logo designed; more exchange listings; the Proof-of-Stake chain initialised for Hypernodes; the code released for Hypernodes; a reduction of inflation; the launch of Hypernodes and shared hosting for them. H1 2019 will see Hypernodes moved to a sidechain and decentralised file storage based on Hypernodes. H2 2019 will see how-to guides and tutorials written and published; a new mining pool and GPU miner; seed wallets and more paper wallets released; and development of DApps.

Whitepaper:

There is no consolidated whitepaper written for the layman. There are several highly technical academic papers that can be found here. These are beyond me, so I won’t even attempt to assess their strengths or weaknesses here.

Wallets:

With regards to wallets, there are Windows, Linux and Mac local wallets, a paper wallet generator and a third-party web wallet.

General:

In general, Bismuth is undoubtedly a development-focused project. It is innovative at its core in that it is the first blockchain written in Python, and thus the team must know their coin inside out and be committed enough to the project to write any additional features for it from scratch. I like that they have custom built their Hypernodes and that these will serve as a base for decentralised file storage in the future. I also like that the project makes it easy for developers to test out new concepts. What I worry about is that it is not yet a fully accessible coin for a layman user: those with limited prior experience with cryptocurrencies will find Bismuth less accessible than, for example, a Bitcoin clone, where those more well-versed with programming may find it more accessible.

With regards to funding, the Bismuth team receives 10% of block rewards for development purposes, which is not included in their circulation supply calculations. This seems ample for the purposes of growing and developing the coin, and I like that it was not premined, so that the rewards are always in line with the supply being emitted, rather than the team controlling a significant amount of the supply, as is often the case.


Technical

The Bismuth chart is a beauty. Price has experienced a full market cycle, with a peak forming in early 2018 at ~65k satoshis and subsequent price-action taking Bismuth down towards the all-time low of 4600 satoshis. Price formed a bottom above this all-time low at ~5700 satoshis in mid-September, bouncing from there to a level of prior support turned resistance at ~15k satoshis. Price has since retraced on low volume towards the accumulation range that was established below 7k in Autumn. As such, current prices are only ~17% below the local lows that formed in September and ~33% above the all-time low. Upside potential is over 1000% against Bitcoin, and far more against the Dollar; as such, this would seem like a low-risk, high-reward play at current prices.


Conclusion

This report is now approaching 5,000 words, and it is time to draw it to a close.

My final grading for Bismuth is 7 out of 10. It is quite clear that Bismuth has a strong case to be made for it regarding its approach to development, and current prices seem relatively cheap, but there’s no hiding from the fact that the project is falling short of where it should be because of a lacklustre approach to growing its userbase and incentivising market participants to buy and (preferably) hold Bismuth. There is much to like and much room for improvement.

Further, here is a link to a Google Sheets file with any significant data from previous reports compiled for cross-comparative purposes. I will keep this updated as I continue to write these reports.

I hope this report has proved insightful and that you’ve enjoyed the read! Please do feel free to leave any questions in the Comments, and I’ll answer them as best I can.


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