Coin Report #39: Conceal Network

Coin Report #39: Conceal Network

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

Welcome to the 39th Coin Report. In today’s report, I will be assessing the fundamental and technical strengths and weaknesses of Conceal Network. This will be comprised 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

Prior to conducting my research for this report, I was largely unaware of Conceal Network beyond seeing it mentioned a few times on Twitter and having a few individuals message me regarding its developments. Nonetheless, I had little time to delve any deeper into the project, so this report will be based on fresh research from the past couple of days.

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 Conceal Network prior to reading this report, here are some primary links:


Fundamental

General:

Name: Conceal Network

Ticker: CCX

Algorithm: CryptoNote-Conceal (Proof-of-Work)

Sector: Private Financial Ecosystem

Exchanges: Hotbit, Sistemkoin, TradeOgre, STEX, Graviex, Citex, Qtrade and Altilly

Launch Overview

Conceal Network was launched in Q2 2018, with its testnet released in April and its mainnet in May. The project was launched with a 6% premine of the maximum supply of 200,000,000 CCX, amounting to 12,000,000 CCX. This 6mn is released in 400k amounts every 3 months to cover operation expenses and other costs. The network is built on the CryptoNote protocol and utilises Proof-of-Work for consensus, with its emission period beginning with 5 CCX rewarded per block, increasing to a maximum of 20 over time. There was no ICO.

Price-History Overview

Despite Conceal Network having been in existence for ~18 months, there is only ~9 months of this available as price-history (beginning February 2019). That being said, there is one clear market cycle that has played out during this time, occurring beginning in July. We shall come to this in the Technical section, but for now it will suffice to say that CCX formed its all-time high in July at 8,900 satoshis, preceded by its all-time low in late June at 370 satoshis. Price is currently range-bound below 2,500 satoshis and above 1,400 satoshis, as well as capped by its 200-day moving average.

Project Overview

The primary purpose of Conceal Network is to provide individuals with a private financial ecosystem, in which their transactions are fully shielded and they are provided with anonymous messaging services and private investment vehicles with which returns can be generated on their balances.

As stated in their documentation:

“Conceal.Network is a decentralized block-chain bank that permits users to send and receive funds, as well as messages, anonymously, and earn interest on those deposits. This is done using a public ledger, making the transactions “hack-proof”. At Conceal.Network we believe real banking privacy is a right and we are paving the way to make that happen.”

I look forward to evaluating their progress.

Let’s begin with some Metric Analysis:


Metric Analysis:

Below are listed a number of important metrics, all of which are accurate as of 28th November 2019. 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: $0.136 (1804 satoshis)

Circulating Supply: 5,108,100 CCX

Total Supply: 14,868,084 CCX

Exchange Volume: $120,015 ($24,888 excluding wash)

Network Value: $695,365 (92.15 BTC)

Maximum Supply: 200,000,000 CCX

% of Max. Supply Minted: 7.43%

Network Value at Max. Supply: $27.225mn

Exchange Volume-to-Network Value: 3.58% excluding wash

Category: Microcap

Average Price (30-Day): $0.156

Average Exchange Volume (30-Day): $125,125 (~$25,900 excluding wash)

Average Network Value (30-Day): $795,032

Average Exchange Volume (30-Day)-to-Network Value: 3.26%

Volatility* (30-Day): -0.0769

Average Daily On-Chain Transactions (30-Day): N/A

Average Daily Transactional Value** (30-Day): N/A

NVT*** (30-Day): N/A

% Price Change USD (30-Day): -25.44%

% Price Change USD (1-Year)+203.86%

USD All-Time High: $0.856

% From USD All-Time High: -84.4%

Premine % of Max. Supply: 6%

Premine Location: https://explorer.conceal.network/index.html#funds

Liquidity (calculated as the sum of BTC in the buy-side with 10% of current price across all exchanges): 0.395 BTC

Liquidity-to-Network Value %: 0.43%

Supply Available on Exchanges: 338,153 CCX

% of Circulating Supply Available on Exchanges: 6.62%

*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 volatility.

 

Supply Emission & Inflation:

Block Reward Schedule: 2 minute block times with emission schedule beginning at 5 CCX per block rewarded. Current reward is ~9CCX and 20 CCX will be the maximum reward. 0.25 CCX incremental increases over time.

Average Block Time: 2 minutes

Current Block Height: 386,038

Annual Supply Emission: 2,759,400 CCX (49.78 BTC at current prices)

Annual Inflation Rate: 54%

Circulating Supply in 365 Days: 7,867,500 CCX (source)*

* This figure can fluctuate based on Deposits and Investments (which I discuss a little later), as they lock coins out of circulation.

 

Staking & Masternodes:

Network Staking Weight: N/A

Staking ROI (Annual): N/A

Masternode Collateral Size: N/A

Masternode Price: N/A

Masternode Count: N/A

Masternode Count Growth (30-Day): N/A

Supply Locked in MasternodesN/A

Masternode ROI (Annual): N/A

Masternode Reward / Block Reward: N/A

Masternode Network ValueN/A

MNV / Network Value: N/A

 

Distribution:

Address Count: N/A

Supply Held By Top 10 Addresses: N/A

Supply Held By Top 20 Addresses: N/A

Supply Held By Top 100 Addresses: N/A

Inactive Address Count in Top 20 (30 Days of No Activity): N/A

 

Analysis:

Given the inherently private nature of the project, as well as the lack of masternodes or traditional staking, there are far fewer metrics to delve into than in regular reports. Moreover, privacy also makes it unfeasible to collect transaction-related data, thus, whilst this very fact suggests that Conceal Network is doing what it says on the tin (concealing), we are unable to determine the extent to which this aim is being achieved.

Nonetheless, I will evaluate the progress that is being made and whether the metrics we that are available are pointing towards potential undervaluation. We will be taking a look at the General metrics to begin with and will conclude with Supply Emission and Inflation.

Firstly, I’d like to consider Volatility:

Conceal Network’s 30-day Volatility was calculated to be -0.0769, placing it somewhere in the bottom-third among prior reports, indicating a potential area for accumulation to be taking place (though this we can only confirm when we take a look at the chart, as we will be unable to look at a rich-list for CCX).

Moving on, I found Conceal Network to have buy-side Liquidity of 0.395 BTC, equating to 0.43% of its Network Valuethe 6th-highest of all prior reports, indicating that strong demand for CCX at current prices. It must also be noted that CCX has one of the lowest network values of all previous reports and so a slightly higher Liquidity figure is expected.

Regarding its sell-side Liquidity, I calculated that there was 338,153 CCX available in the orderbooks on listed exchanges, equating to 6.62% of its circulating supply. This is the highest figure ever recorded in these reports and indicates that, though there is demand at current prices, there is plenty of incentive for sellers to keep their CCX on the orderbooks also. This can be detrimental to price growth.

Now, let’s take a look at the volume-related metrics:

Conceal Network traded $120,015 of Exchange Volume over the past 24 hours, equating to 17.26% of its Network Value. However, the vast majority of this volume is wash-traded at Hotbit. The real figure is closer to $24,888, equating to a still-impressive 3.58% for Exchange-Volume-to-Network Value. The picture is equally impressive when we look at averages across the past month, with Conceal Network trading an average of $25,900 daily of real volume, equating to 3.26% of its Average Network Value of $795,032 for that same period. This places it somewhere in the middle among prior reports.

Moving onto Supply Emission, using Conceal Network’s block reward schedule, I calculated that it has annual supply emission of 2.76mn CCX (49.78 BTC-worth at current prices). This gives Conceal Network a moderate annual inflation rate of 54% and places its circulating supply at 7.88mn CCX in 365 days.

However, more significant than the supply emission itself is its relationship to traded volume. Given the above figures, we can work out that Conceal Network’s average daily supply emission for the next 12 months is 7,560 CCX, equating to 0.136 BTC, or $1,029-worth. Conceal Network’s real Exchange Volume covers this supply emission by 24.2x and its Average Exchange Volume is almost identical. suggesting that current prices are indeed sustainable. Moreover, its Liquidity of  0.395 BTC is almost three times as great as the average daily supply emission. As such, there are only mild headwinds to price growth beyond the sell-side depth in the orderbooks; supply emission should not be affecting price drastically.

And that concludes this section.

Onto the Conceal Network 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.

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

Twitter Followers: 3,639

Tweets: 880

Average Twitter Engagement: 1.72%

Facebook Likes: 770

Facebook Posts (30-Day): 6

Average Facebook Engagement: 0.61%

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

Twitter:

The Conceal Network Twitter account has a moderately-sized audience at 3,639, which is the 13th-lowest of prior reports. That said, in RivalIQ’s report, we find that the average Twitter engagement rate across all industries is 0.048%, which means that Conceal Network’s engagement rate is currently 35.8x greater. Further, the average engagement rate for the Media industry (the most relevant in the report) is 0.009%, thus Conceal Network’s is 191x greater. Relative to other coins from previous reports, its engagement is the 10th-highest. Positive, regarding engagement; but I’d like to see the community on this platform grown.

Facebook:

Now, with regards to Facebook, Conceal Network has a small audience of 770. Its average engagement rate for the past 30 days was 0.61% from 6 posts in the past 30 days, which is moderate, and not all that impressive given the small size of the audience.

Discord:

The Conceal Network Discord group has 2,018 members.

It is quite well-organised and structured, with channels for all possible topics. For this section, I will be covering Announcements and General, as these are particularly useful and the latter is often the most active. Beyond this, there are channels for mining, staking, support, bounties, consensus and plenty more.

Beginning with Announcements, I found that this channel is updated near-enough daily. In November, there have been at least 10 announcements, including testnet for an updating Deposits system; a listing on Qtrade; long-form development updates; mobile and cloud encrypted messaging; an AMA; a wallet update; and a new developer joining the team.

In General, I found there to be daily discussion, with dozens of daily messages posted, which is not too bad given the size of the group, although I would have liked to have seen more consistent conversation. Over the past week, I found some general chat (including some particularly interesting stuff on coffee); an explanation of the biggest improvements over Bitcoin and Monero (transaction mix-ins and flat fees to obfuscate transactions); and the fact that the team is looking into solutions for getting the mobile wallet on the iOS app store to allow for encrypted messaging on iPhones.

Overall, though clearly there is a community spirit, activity levels are not particularly high and most discussion is general rather than CCX-specific. I think some strategisation is required by the team on how to leverage the current committed community to grow the reach of the protocol; plus, I expect some strategisation would be helpful within the community itself regarding spreading the word. As a potential new user, I did not learn anywhere near as much as I could have from my time in the Discord.

Telegram:

There are 901 members in the Telegram group.

The group itself has a handful of daily messages, which is relatively active considering the small group size. Over the past week, I found there to be lots of general conversation, a new Vietnamese group opened and detailed Medium posts published regularly and pushed out here. Further, I found that new landing pages had been released. a new wallet update had been published and encrypted messaging went live on the Cloud and mobile wallet. There was a great deal of price talk among the community, but it was good to see the team committed to discussing development rather than price. The core takeaway was the team are aiming for user-friendliness in order to improve adoption rates – wise. There are also a lot of tutorials and guides pushed out here for newer users.

BitcoinTalk:

The Conceal Network BitcoinTalk thread was created on December 17th, 2018, and has since generated 71 posts spanning 4 pages in 346 days. This equates to 0.2 posts per day, on average. However, in the past 90 days, the thread has had 6 posts via 5 individual posters, giving an average of 0.06 posts per day; the thread is effectively dead.

Regarding the ANN itself, it is visually appealing and presented as a graphic with decent branding. I believe it is a screenshot of an old website homepage (as such, I will refrain from covering its contents here as I will only repeat myself in the Website section). Social links are provided at the bottom of the announcement.

Regarding the past 90 days of content, there have only been 6 posts since August, rendering the thread practically dead. Among these posts, there was a Hotbit listing, new mining pools and the announcement of the winners of a proposal vote, which included a private browser, P2P messenger app and a revamp of CCX deposits.

And that concludes this section.

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 are 8 team members listed on website and 9 Github contributors.

Among the team, I found that there are 5 with expertise in development, 1 in operations, 1 in marketing and PR and 1 in macroeconomic design.

Despite this being quite a small, development-heavy team, as would be expected of such a project, I am pleased to see that, unlike many privacy-minded microcap projects, marketing & PR and operations management have not been neglected, as these are commonly the weaknesses of such projects.

Regarding the vision of the team, as Conceal Network is community-run for the most part, the team get together for consensus once a year to discuss community proposals for the following year; this is then fed to the community who vote on which they would like to be worked on. The 6 proposals with the highest number of votes are selected and the roadmap for the following year is shaped by these. This is the project’s governance model.

Website:

https://conceal.network/

The website is fairly modern in its design but not particularly well-branded, with no real distinctive identity crafted.

The tagline on the homepage reads Decentralized Banking, Private Transactions & Encrypted Messaging, with four tabs linking to an About page, Wallets, the Cloud and Docs. Social links are prominently displayed towards the right side of the homepage. There is also a comprehensive drop-down menu, well-organised and accessible.

Scrolling down the homepage, we come across a What’s Conceal section, which gives us a brief overview of the project, with the primary takeaway being that the network provides users with a means to exchange money and communicate completely privately, whilst also offering interest rates on deposits and investments.

Following on from this, we find a section titled Features that outlines the nature of the project, including the following: private, decentralized, untraceable, fungible, scalable, community-driven, simple, cross-platform, Proof-of-Work, encrypted messages, adaptive limits and decentralized banking. Regarding the latter, we are told deposits can make up to 4.2% per year and investments can return 7.2% yearly. Below this, we find an outline of the specification of the network and CCX, including transparency regarding the 6% premine.

Moving on, we find a Modules section, which briefly describes Banking and Messaging on the network, with the former comprised of a “backbone” of deposits, “providing users with an egalitarian form of staking that earns interests on locked deposits”, and investments that provide higher returns for long-term holders. Encrypted messaging is the second key component, with messaging on the network being untraceable and anonymous.

Beyond this, there is a roadmap that shall be covered in the next section, plus some information on the team that was covered in the prior section. Finally, towards the bottom of the page, we find all listed exchanges, wallets and mining pools.

Roadmap:

https://conceal.network/#roadmap

The roadmap is presented as a simple, chronological checklist, dating back to the project’s inception in April 2018. There are no further reading resources provided, nor any detail beyond the goal or event itself.

For our purposes, I will refrain from covering the past achievements, focusing more on the present and future goals.

Beginning with August 2019, the team released Conceal.Pay and the beta for Conceal.ID, as well as began internal testing for Cloud encrypted messaging and secured a listing on Hotbit.

In September, internal testing began for Conceal.ID and consensus was taken amongst the community.

In October, Conceal.Desktop was optimised, enhancements were made to the wallet and a Euro pairing was added. Further, the results of consensus were released, with a revamp for deposits winning and is currently in the works.

As for November, nothing has been completed (or the roadmap is yet to be updated), but the following are in progress: encrypted messaging beta testing; self-destructing messages; auto deposit withdrawal from the desktop wallet; deposit revamp; and privacy improvements.

That concludes the roadmap.

I believe that it would be very helpful to have some indication of future goals, more detailed descriptions of specific goals and some indication as to progress for each.

Whitepaper:

https://conceal.network/wiki/doku.php

Whilst there is no traditional whitepaper or business strategy documentation (though the former is in the works at present), there is a Wiki on the website that will be suitable for our purposes.

It begins with an overview of the project’s aims, primarily to be the decentralised bank providing users with private transactions, anonymous messaging and interest on deposits and investments. “At Conceal.Network we believe real banking privacy is a right and we are paving the way to make that happen.”

Moving on, within the About section, there is a more detailed description of the project (similar to that on the website), as well as the primary features of the network and a legal disclaimer. Most importantly, there is a comprehensive emission schedule provided for full transparency of block rewards, as well as an outline of fees the network charges, 100% of which go to miners. Equally importantly, there is a detailed section on the premine, which details the 6% reserved at genesis (12mn CCX) and its own vesting schedule, with 400k CCX released every 3 months to “cover operation expenses, exchange listings, marketing and to pay collaborators.”

Following on from this, there is a very detailed guide on how to use the various wallets, which we shall not cover here. This is super helpful for new and inexperienced users.

The next section covers Banking, discussing at length the two core components: deposits and investments. Deposits are funds that are locked for specific periods to earn interest, with the minimum period being one week and the maximum one year; interest ranges from 0.0698% to 4.1%* on these. Investments are more lucrative, requiring 50,000 CCX as a minimum and providing 1.45% returns for 3-month terms, up to 36% for 5-year terms. Larger investments also provide higher returns. There are two options available here: CCX Plus and CCX Platinum, with each operating like a Certificate of Deposit. The latter is for those with greater than 50,000 CCX. On this subject, I think it’s important to note that, as found in the CCX explorer, there are currently 9.8mn CCX locked up in deposits and investments, equating to 65.6% of the total supply. This means that almost two-thirds of the supply is locked out of circulation for varying term lengths.

*Regarding the Conceal Deposits, this updated post on version 3.0 becomes relevant here: in it, we find that interest rates are being updated, with the new range from 2.9%-6% depending on lockup duration, with three tiers of interest available depending on lockup amount. Tier 1 for those below 10,000 CCX, Tier 2 for those between 10,000-19,999 CCX and Tier 3 above 20,000 CCX. This model is currently in testnet.

Beyond this, there is a guide on how to set these up within the wallets, as well as a comparison between cold staking and traditional masternodes/Proof-of-Stake systems. There are also sections with mining guides, a copy of the roadmap and a security section for those that are unsure on how to secure their assets.

Finally, there is a section on Conceal Pay, which allows users to create a widget or share a link to be paid in CCX seamlessly. This includes a guide on setting this up for a website, as well as an advanced section with greater customisation options.

The documentation concludes with a moderately detailed FAQ.

Wallets:

CCX can be stored on well-designed, user-friendly Windows, Mac and Linux GUI wallets, command-line wallets, the Cloud wallet, on an Android wallet or via paper wallets. The only thing  missing here is hardware wallet functionality and an iOS wallet.

And that concludes the Fundamental sections of this report.


Technical

CCX/BTC

CCXBTC

As can be seen from the CCX/BTC Daily chart printed above, from its initial listing on exchanges, CCX crashed and kept bleeding for several weeks, falling from 7,900 satoshis to a base around 3,000 satoshis, above which it remains for a short while.

Prior support became resistance here as price became range-bound below 4,550 satoshis; in May, price broke through range support and tumbled to new lows below 2,500 satoshis, falling all the way to an all-time low at 370 satoshis in Late June.

Price did not linger here for long, despite it forming the base for CCX’s first bull cycle. Within a couple of weeks, price had broken back above support turned resistance at 1,400 satoshis, climbing hard until its eventual all-time high was printed at 8,926 satoshis in late July. This marked the end of the bull cycle and price bled out for several months, marking out a new range in November between support at 1,400 satoshis and resistance at 2,500 satoshis. All the while, price remains capped by the 200-day moving average.

I believe this range is perfect for accumulation for the next cycle but only for those, like me, who like to get stuck in a little early for microcaps. For those more risk-averse, I would await a sustained break above 2,500 satoshis and the 200-day moving average before entering a position.


Conclusion

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

My final grading for Conceal Network is 7 out of 10.

Here, you can find my grading framework, for reference.

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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