Coin Report #1: GeoCoin

Welcome to a new series of posts entitled Coin Report: these will comprise of a precise, exhaustive and extensive analysis of specific altcoins, published periodically (as I get around to them). Ideally, I’ll be posting one report a week, but this first one has taken several hours to research and will probably take another two or three to write up and edit. So, one every fortnight may be more likely. The first of this series will feature GeoCoin, and the reports will be written according to the following framework:

General Framework:
  • Introduction: In this opening section, I’ll write a short description of the altcoin being analysed, with some general thoughts and important links.
  • Fundamental: This being the most detailed and lengthy section, I’ll break the material up into further sub-sections, such as: General; Metric Analysis; Community; Development; and Other. Here, I’ll be analysing and evaluating the various fundamental aspects of an altcoin according to the process I write about in my book. Further to the book, and, I think, significantly, I’ll be doing a microscopic metric analysis on data that I find useful for speculative purposes; similar to how one would approach value investing in equities, albeit without nearly as much critical data available as in that financial domain.
  • Technical: Here, I’ll provide a top-down analysis of the ALT/BTC and ALT/USD charts. This will be particularly useful in judging entry levels and highlighting potential smart-money accumulation.
  • Conclusion: In this final section, I’ll draw the analysis to a close, summarising the main points-of-interest, and, most importantly, awarding the altcoin a grading based on its overall strength and profit potential going forward. This grading will be on a scale of 1 to 5; 5 being the strongest.

Onto the inaugural Coin Report:


 Introduction

For this first Coin Report, I decided I’d take a look at GeoCoin. GeoCoin came onto my radar about six weeks ago (though I had traded the coin prior to that) because of its chart. The chart instigated a period of further research, particularly into the fundamentals of the coin at the present time (as the project is just shy of four years old), as well as a thorough analysis of its rich-list. Unfortunately, it seems the rich-list has been taken down from the Chainz explorer, and it isn’t available on the Ubiq explorer, so there won’t be any rich-list analysis in this report. Suffice to say, around a month ago, GeoCoin’s rich-list looked very positive, with a large majority of the top 20 addresses in accumulation.

The coin itself presents a number of points-of-interest, particularly because it is the only geocaching cryptocurrency I am aware of; it’s certainly the only succesful one.

If you’d like to find out more about GeoCoin, here are some links that I used in the process of writing this report:


Fundamental

General:

Name: GeoCoin

Ticker: GEO

Sector: Geocaching

Exchanges: Bittrex and Cryptopia

GeoCoin was launched in January 2015, and, as such, has experienced numerous market cycles; thus, price has developed a relatively reliable pattern of behaviour. We’ll delve into the price-history and it’s cyclical nature in the Technical section of this report, but I’d like to emphasise the utility to us, as speculators, of a near-four-year history: unlike the plethora of projects that were launched in 2017 and this current year, GeoCoin has experienced multiple bear markets. As such, we have a reliable roadmap to follow for judging the promise of an entry. This cannot be emphasised enough. The opportunity in all financial assets is dictated by the price you pay. Think about this in terms of a traditional asset, like equities: those that launched in the wake of the 2008 crisis have had 10 consecutive years of bull market fashioning their price-history. When the next recession comes, those equities will be far more difficult to judge a great entry on than those that have experienced a multitude of bear markets, as there is simply no reference point for how they behave in such times. A coin like GeoCoin gives us an advantage, insofar as we are able to map out the behaviour of price in previous bear markets, and use that, along with the following fundamental analysis, to figure out the optimal entry point for future profit.

Not only has GeoCoin experienced numerous price fluctuations, but it has also quite recently experienced a fundamental change. The project launched with a Proof-of-Work consensus mechanism, but transferred to life as an ERC-20 token on the Ubiq platform. This made a lot of sense; there was no need for GeoCoin to maintain its own blockchain, given that its primary aim is to operate as as a token of value rewarded to those via geocaching in its app. The old PoW chain was considered ‘developer abandoned’, and from that point the coin was no longer mineable – another advantage to us, which we’ll get into in the discussion of supply emission and inflation. The current consensus mechanism is a novel one, dubbed Proof-of-Location.


Metric Analysis:

Below, I’ve listed numerous significant and interesting metrics, but, prior to their analysis, there are a few important notes to consider:

Notes:
  • These were calculated on 9th October 2018.
  • To find the 30-day averages, I calculated the sum of the previous 30 days of data according to the sources I provide with the metric, and divided by 30.
  • For some metrics, I have provided both BTC and USD figures, but due to ease-of-access (most screener data is USD-only), some metrics are only USD. Further, the use of USD is helpful as more of these reports are published, as it will allow more readily for cross-comparison.
  • Network Value = Market Cap
  • If you would like to see more data or specific metrics that don’t appear below, please leave your feedback in the Comments section. Equally, any criticisms are welcome. I am aware that, unlike in equity analysis, the use of metrics in altcoins is currently an inexact art. There is much room for improvement and refinement, which I am sure to experience as I publish more reports.
  • Transactional Volume differs from Total Volume as it subtracts (or attempts to) speculative volume. For GeoCoin, this was calculated using the sum of GEO in transactions in a 24-hour period on https://ubiqscan.io/token/0x500684ce0d4f04abedff3e54fcf8acc5e6cfc4bd and multiplying the total by the current price of GEO in USD. Same process for Average Transactional Volume.
  • NVT is a ratio similar to P/E in equities, with transactional volume replacing earnings. For more info, go to http://charts.woobull.com/bitcoin-nvt-ratio/ and https://coinmetrics.io/nvt/#assets=btc
  • NVT is pretty useless for smaller coins with low transaction volume, but where its utility lies is in cross-comparison with other similar coins.
  • For Liqudity, I calculated the sum of BTC in the buy-side of the orderbooks on Bittrex and Cryptopia within 10% of current price.
Metrics:

Price: 8781 satoshis ($0.58)

Volume: $5,188

Circulating Supply: 3,180,551

Total Supply: 3,180,551

Maximum Supply: 4,000,000

% of Max. Supply Minted: 79.51%

Network Value: 279.28 BTC ($1.830mn)

Category: Midcap

Volume-to-Network Value: 0.28%

Average Price (30-Day): $0.56

Average Volume (30-Day): $2,432

Average Volume (30-Day)-to-Network Value: 0.13%

Transactional Volume: $2,805.90

Transaction Count: 4

Transactional Volume-to-Total Volume: 54.08%

Network Value-to-Transaction Volume: 652.23

Average Transactional Volume (30-Day): $594.95

Average NVT (30-Day): 3076.02

Average Transactional Volume-to-Average Volume: 24.46%

Network Value at Max. Supply: $2.301mn

% Price Change USD (30-Day): +10.8%

% Price Change USD (1-Year): -28.8%

USD All-Time High: $18.66

% From USD All-Time High: -96.9%

Premine: 0.85%

Premine Allocation: https://ubiqscan.io/address/0x3990e0f5aa5a413ed9ed6de357a437d06c57c17a

Liquidity: 0.51149 BTC

Liquidity-to-Network Value %: 0.18%

Annual Supply Emission: 50,000 GEO

Annual Supply Emission at Current Price: 4.3905 BTC

Annual Inflation Rate: 1.57%

Network Value in 1 Year at Current Price: $1.830mn

Analysis:

Well, that’s a lot of information to take in… and not all of it is supremely relevant to our purposes. Take, for example, the NVT numbers. These aren’t really all that useful as growing transactional volume is certainly not a fundamental aim of GeoCoin, unlike Bitcoin. It is no surprise that these numbers come out high or that Average Transactional Volume equates to less than 1/4 of Average Volume. If GeoCoin was aiming at becoming a primary medium-of-exchange, it would undoubtedly (given those figures) be failing. But that isn’t the goal. The goal is to provide value for its user-base in the form of tokens that (hopefully) accrue value over time, generating further incentive for those users to explore the locations in which GEO can be found, and ultimately grow the GeoCoin user-base because of that. In short, the goal is to be a playful store-of-value. So, why have I included irrelevant metrics? For the express purposes of cross-comparison. NVT may not be relevant to GeoCoin at its core, but the comparison of NVT figures across similar coins can allow us to assess relative fundamental strength across-the-board (something I will be developing as I write these reports).

But, onto some actual metric analysis:

Given the fundamental aim of GeoCoin that I highlighted above, the metric that is most significant, and that stands out as very promising, is, of course, inflation. Supply emission is integral to our assessment of the profit potential of any coin, and particularly one that is actively seeking to accrue value over time. GeoCoin passes the test with flying colours in this regard. In my book, I write that I do not like to invest in altcoin suffering from greater than 100% annual inflation. GeoCoin has an annual inflation rate of 1.57%. That’s lower than the current inflation rate of the US Dollar.

This supremely low inflation rate is facilitated by the Proof-of-Location consensus mechanism that airdrops 50,000 GEO annually and not a single GEO more. At current prices, that’s less than 5 BTC of extra supply a year. This is very promising with regards to future profit potential at current prices, as we have next-to-zero additional supply to contend with. Demand doesn’t really have to grow in order to sustain current prices. Ultimately, the low inflation rate acts as a cushion for our positions, due to the minimal sell pressure being experienced. Looking forward, this also implies less headwind during a bull cycle.

Another metric that stands out is the % decrease from GeoCoin’s USD all-time-high. Depending on which source you use for the USD all-time high, this is a decrease of between 96-98%. Using the CoinGecko figure of $18.66, current price is ~97% away from those highs… a potential 33x return in waiting. The general consensus is that alts will see new USD highs but not necessarily BTC highs. I am mostly in agreement with this, as I believe ALT/BTC all-time highs will be more hit-and-miss, whereas I think many altcoins will find themselves trading at new USD highs in the next bull cycle.

A third positive can be found in the Average Price figure of $0.56. This just means that GeoCoin has been trading ~$0.56 on average for 30 days; a sign of a potential accumulation range having formed. This is something we can verify later using the chart. But, it suggests that the current price of ~$0.57 is possibly a good entry.

Now, thus far, all seems to be positive, but there is some data I’d like to point out that isn’t particularly promising: namely, the two figures relating to Volume-to-Network Value and Average Volume-to-Network Value. The first is 0.28% and the latter is 0.13%. Generally speaking, I like to see a VNV of 1% or higher, as it suggests smart-money interest. This is highlighted as a critical step in my framework for picking microcap coins. However, GeoCoin isn’t a microcap; it is a midcap. And we are currently in the heart of a bear market. It is unreasonable, I believe, to expect high VNV at such a time… at least not as high as we experience during bull cycles. Regardless, both figures are low, and 0.13% AVNV would usually put me off, or at least compel me to do extensive rich-list analysis to identify accumulation during this period. Unfortunately, as I mentioned earlier, that faculty is no longer available for GeoCoin, so you’ll have to take my word for it that, when I last looked at the top addresses, the signs of accumulation were there.

Further to the above, there is also only ~0.5 BTC of buy-side liquidity within 10% of current price across both exchanges that GeoCoin is listed on. This is, of course, another symptom of the bear market, but liquidity of only 0.18% of network value is not particularly impressive.

That concludes my analysis of the figures. Onto the GeoCoin 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 five main platforms to examine: Twitter, Facebook, Telegram, Discord and Slack.

GeoCoin doesn’t have a Telegram or Slack, but is present on the other three. To start with, I calculated some general metrics across the GeoCoin Twitter and Facebook pages, and they are as follows:

Twitter Followers: 10170

Tweets: 264

Average Twitter Engagement (30-Day): 0.18%

Facebook Likes: 1815

Facebook Posts (90-Day): 27

Average Facebook Engagement (90-Day): 0.08%

Again, these metrics will become more insightful as tools of comparison rather than standalone figures but there is certainly some promise here. According to RivalIQ, media companies (the closest industry in the 2018 report to what I would consider GeoCoin to be) tend to have an average Twitter engagement rate of 0.013%. GeoCoin’s engagement is almost fourteen times above the average. With Facebook however, the average media company generates a 0.08% engagement rate: identical to that of GeoCoin. Twitter is clearly their strength, though that comes as no surprise given that Twitter acts as the social hub for the cryptosphere. Going broader, the average engagement rate on Facebook across all industries is 0.16%: GeoCoin’s is half the overall average. The all-industry average Twitter engagement rate is 0.046%… GeoCoin are still almost four times stronger than this.

Moving away from the two metric-focused social platforms, let’s talk about their Discord channel; a platform more suitable for fostering conversation and sparking ideas on development.

Given that the GeoCoin Discord channel operates within the larger Ubiq group (of ~4589 members), I was expecting something different to what I found. There is a great deal of productive conversation, with ideas on development being bounced back and forth, as well as progress updates pretty much every day. However, all of this conversation is being generated by 6 or 7 members, which is less than I’d have hoped for, especially since there are over 5100 active users of the GeoCoin platform.

Bitcointalk:

Finally, let’s look at the Bitcointalk thread. This, for me, is the hub of all my altcoin research, and has been for years. GeoCoin’s thread smashed it out of the park. There are 240 pages of conversation since January 2015 and 4788 posts. This works out at an average of over 100 posts per month. However, in the past three months, there have been 94 posts, which is a slow-down from the average but still a high level of activity. What I gathered from the thread is consistent development updates by the lead developer, with questions being answered within 24 hours. These 94 posts were written by ~30 different individuals.

The BTCTalk users seem excited by the project, with most expressing their interest in the progress of development and close-to-zero expressions of a less favourable kind. The thread does what it is meant to do: it provides clear, concise and consistent updates on the project. On September 4th, the lead developer announced that the ‘GeoCaching Interface’ is in development, following the launch of which there will be a heavier focus on marketing – a gem of information for the speculator. Overall, impressed. The Bitcointalk thread made up for the small concentration of conversation in the Discord channel.


Development:

Here we come to what is, for many, the crux of any fundamental analysis of a project: development. However, for me, price is always the primary concern, and development is perhaps second in rank. For this section of these reports, I’ll do a brief run-through of general project leadership, followed by an evaluation of the roadmap, whitepaper (there isn’t one for GeoCoin), website and wallet. I’ll conclude with some general thoughts on the project’s past, present and future development.

Project Leadership:

From what I can gather, there is one lead developer that is running the entire project. This is Dave on Twitter. Single-person teams can be risky for the speculator, particularly when there is a smaller community that partake in conversation on development. Keep in mind that GeoCoin has over 5100 active users of the geocaching platform, but less than 50 individuals across BTCTalk and Discord that are actively involved in discussion. This raises a potential question: would community members step in if Dave was to step down? ‘If’ is emphasised for good reason, as, from my research, I do not expect such a sitation to arise, but the question must be asked nonetheless. My honest answer is that I believe there would be community support for development of the project. GeoCoin is safely nestled under the Ubiq wing, and from the conversations I have read through across their social platforms, there is certainly a keen interest in continued development of GeoCoin. Further, the lack of animosity amongst the small community (a rarity in this space) is another positive sign for the doomsday scenarios. The way things tend to play out in such situations is with utter chaos for projects with bickering amongst their own dedicated community and with smooth transition for those, like GeoCoin, with general excitement and positivity. Of course, I maintain that this is simply an if-then scenario, and not one that I expect to arise.

Roadmap:

The roadmap can be found as a section on the website, but it did disappoint me; not for all bad reasons, however. The roadmap is presented as a quirky infographic, which is visually appealling, but it lacks the specificity and clarity that I like to find in a roadmap, as I talk about in my book. I’d have liked to have found projected dates for clearly delineated goals, concise progress summaries and a more extensive roadmap for the future. Part of my disappointment, however, comes from the fact that GeoCoin has already achieved most of the roadmap it has presented. This is a double-edged sword, as it suggests effectiveness on the part of the developer as well as work ethic, but it lacks ambition. Perhaps a revised roadmap will come with the marketing campaign. Scoring it out of 5, I’d give it a 3.

Whitepaper: N/A

Website:

The website has clean UI, if a little basic, but it is easy to navigate and informative. There is clear and active promotion of geocaching (the primary concern of the project), which is good to see. The website lacks depth…¬† a regularly-updated blog would have been useful, especially for a project like this one.

Wallets:

GEO runs on the Ubiq blockchain, so it can be transacted on any UBQ wallet.

General:

Generally, the main point-of-interest for me regarding GeoCoin’s development is that it has already achieved its primary innovation: successful merging of cryptocurrency with geocaching. The transition to the Ubiq blockchain was a smart move, too. Looking forward, I like that they are considering the introduction of a burn mechanism and that there will be in-app events to foster user-base growth.


Other:

I believe I covered everything in the above sub-sections. That concludes the fundamental section of the report. If you feel I’ve missed something out regarding fundamentals, please do let me know in the Comments section.


Technical

Now, the fun part. Why did GeoCoin come onto my radar in the first place? I talked about it in my last Market Outlook, but let’s take another look at the chart:

GEO/BTC

GEO/USD

In all honesty, all I really needed was that first chart with a horizontal line at 9k satoshis. It is the most important level in GeoCoin’s price-history, and buying below that level has been very profitable numerous times, given a sufficient time-frame. Ranges across GEO/BTC and GEO/USD have formed clearly and tightened of late, indicating an accumulation zone at this oh-so-significant level once again. GEO/USD has returned to July 2017 levels; the levels that preceded a 6000+% move between then and January 2018. Historically-speaking, this is a very good area to accumulate a position, with an aim of an average entry below the 9k satoshis level. Upside potential is huge going forward based on previous prices. Overall, very promising.


Conclusion

This report has run on for well over 3,000 words now, and I think it’s time to draw it to its conclusion. I’ve spent many many hours this week researching and compiling this for you guys (and myself), and, quite frankly, I want to stop typing…

However, I have found this entire process to be very insightful and I look forward to writing more, if only for the possibility of deep cross-comparison. Perhaps, in the future, I’ll also devise a way to make these reports more visually appealling; particularly the Metric Analysis.

My final grading for GeoCoin is a solid 4 out of 5. It is strong in almost all the right areas, but there is certainly a lot of room for fundamental improvement, if not technical.

Please do let me know if you’ve enjoyed this first Coin Report; which sections you found most valuable; where you’d like me to develop further/refine/improve etc. And feel free to leave any questions in the Comments section and I’ll get back to you. Oh, and sign up for the mailing list if you want these delivered direct to your inbox!


If you’ve enjoyed this post and want to receive new posts straight to your inbox, I’ve set up a RSS-to-Email feed that will be sent out weekly; every Monday, 12pm. Just submit your email and I’ll make sure you’re included in the list. Cheers.

7 thoughts on “Coin Report #1: GeoCoin”

  1. Hi Nik,
    I can only say that it is an analysis with an incredible value to invest and learn. I cant say anything negative, great work.

  2. Thank you for the in-depth analysis. At a first glance, Geocoin seems to be the crypto version of Pokemon Go. Although the UI and experience of Geocoin is not kind of commercial product, the idea is interesting! One concern out of my head is that, given the relative small scale of development at this stage, could it easily be replaced before its next boom?

    1. Hey,

      No worries! Yeah, it functions in a similar way to Pokemon Go.
      I think that’s a concern no matter which small, less-established altcoin you’re looking at… but at the same time, we don’t need any project to become (and remain) the number 1 leader within its sector in order to profit from it. There’s plenty of space for competing coins to succeed. GEO, in particular, doesn’t seem to have any compeitition at the moment either, so it’s already established itself quite strongly given the niche market it is concerned with. Also, if you look back at its chart, there have been numerous cycles already, so you’d be statistically betting against history to think that another bull cycle won’t arise from present levels. Hope that helps.

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