Coin Report #19: Own

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Welcome to the 19th Coin Report. In today’s report, I will be assessing the fundamental and technical strengths and weaknesses of Own. 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

Unlike every other Coin Report thus far published, this one is the product of a private commission for a research report on Own. An individual investor requested a report to be produced for their own purposes, and then granted consent for the research to be compiled and published as a Coin Report.

As such, this is even lengthier than the usual reports, as I go into more depth across an even broader range of topics relevant to the project, including STOs; a meaty enough topic on its own.

Prior to conducting this research, I had never heard of Own, nor spent any serious thought on the subject of security tokenisation. I am very much glad that this opportunity was presented, as I now have a much firmer grasp of the current ongoings in the world of STOs, and I’m equally glad to have been granted permission to share my findings with you.

I believe this will be one of the more broadly informative Coin Reports you read, and, as there is indeed a lot to get through, I’ll refrain from rambling any longer.

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


Fundamental

General:

Name: Own

Ticker: CHX

Algorithm: N/A

Sector: Equity Tokenisation

Exchanges: HitBTC, Hotbit, IDEX, Bancor & CoinExchange

Launch Overview

Own was founded in July 2017, under the original name of Chainium. The company rebranded to Own in 2018, following their ICO in March 2018, following which CHX – an ERC-20 token – was created and distributed . The ICO concluded on April 4th, 2018, raising 8,990 ETH, with an average price of 0.00017 ETH per CHX. ~69mn CHX were distributed of the 100mn available, with the remainder being burned.

CHX is in its early stages of a token swap to the native Own blockchain, commencing Q2, with an end date of 1st June 2019.

Price-History Overview

With the CHX token only created around 12 months ago, there is less than a year of price-history available to analyse. That said, Own is clearly in the midst of its first bull cycle at the moment, having made an all-time high against Bitcoin of ~9k satoshis in February 2019; simultaneously, it made an all-time high against the Dollar of $0.34.

Project Overview

Perhaps the hottest topic since the ICO boom of 2017/18 is the subsequent development of STOs (Security Token Offerings), with a great deal of anticipation present about the growth of this marketplace over the coming years, with wild estimations of upwards of $24tn (yes, trillion) comprising the value of the tokenised asset market by the end of the next decade.

Own is looking to capitalise on this opportunity by providing an end-to-end financial asset tokenisation platform, facilitating the issuance, regulatory compliance and management of security and equity tokens for businesses.

Given the extreme lucrativeness of such a marketplace, there is fierce competition beginning to appear.

Let us see how Own fares, beginning with some Metric Analysis:


Metric Analysis:

Below are listed a number of important metrics, all of which are accurate as of 9th April 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: $0.23 (4378 satoshis)

Exchange Volume: $2,635,217

Circulating Supply: 76,608,117 CHX

Total Supply: 168,956,522 CHX

Maximum Supply: 168,956,522 CHX

% of Max. Supply Minted: 100%

Network Value: $17.463mn (3353.90 BTC)

Network Value at Max. Supply: $38.515mn

Category: Midcap

Exchange Volume-to-Network Value: 15.09%

Average Price (30-Day): $0.21

Average Exchange Volume (30-Day): $1,659,438

Average Network Value (30-Day): $15.798mn

Average Exchange Volume (30-Day)-to-Network Value: 10.5%

Volatility* (30-Day): -0.03848

Average Daily On-Chain Transactions (30-Day): 110

Average Daily Transactional Value** (30-Day): $4.177mn (source)

NVT*** (30-Day): 4.18

Average Daily Active Users (30-Day): 50 (source)

% Price Change USD (30-Day): +10.2%

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

USD All-Time High: $0.34

% From USD All-Time High: -33.7%

Premine % of Max. Supply: N/A

Premine Location: N/A

Liquidity (calculated as the sum of BTC in the buy-side with 10% of current price across all exchanges): 5.29 BTC

Liquidity-to-Network Value %: 0.16%

Supply Available on Exchanges: 1,188,189 CHX

% of Circulating Supply Available on Exchanges:  1.55%

*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.

**Transactional Value in $ is calculated by taking the daily transactional value in CHX and multiplying it by price.

***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: N/A

Average Block Time: N/A

Current Block Height: N/A

Annual Supply Emission: 0

Annual Inflation Rate: 0%

Circulating Supply in 365 Days: 76,608,117 CHX (excluding the release of vested tokens from ICO)

Staking & Masternodes:

Network Staking Weight: N/A

Staking ROI (Annual): N/A (Until Mainnet launched and stabilised ~June 2019)

Masternode Collateral Size: N/A

Masternode Price: N/A

Masternode Count: N/A

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

Supply Locked in Masternodes: N/A

Masternode ROI (Annual): N/A

Masternode Reward / Block Reward: N/A

Masternode Network ValueN/A

MNV / Network Value: N/A

Distribution:

Address Count: 2922

Supply Held By Top 10 Addresses*: 7.33%

Supply Held By Top 20 Addresses: 11.04%

Supply Held By Top 100 Addresses: 22.58%

Inactive Address Count in Top 20 (30 Days of No Activity): 16

*As is often the case, there are some addresses that have been discounted and substituted here, as they are owned by exchanges or the team. In this case, the 1st, 2nd and 6th-richest addresses belong to the team, IDEX and Hotbit, respectively. As such, I have discounted them from calculations, replacing them with the subsequent privately-held addresses in the rich-list. For the sake of clarity, the 1st-richest address, owned by the team, controls 55.26% of the total supply of CHX, comprising of tokens from the ICO. The IDEX address contains 4.26% of the supply and the Hotbit address contains 1.01%.

ICO:

The following details were taken from this source.

ICO Token Sale: 28th March 2018 – 4th April 2018

Total Tokens: 200,000,000 CHX

Tokens Available For Sale: 100,000,000 CHX

ICO Price Per Token: $0.07 (0.00017 ETH)

Total Raised: ~8,990 ETH

Tokens Sold: ~69,000,000 CHX

Tokens Burned: ~31,000,000 CHX

Analysis:

As per usual, there’s quite a lot to get through here, but let us begin with the metrics related to transactions, as there is something very surprising to be found here.

Using the Etherscan explorer, I calculated that there were, on average, 110 daily CHX transfers over the past month. What surprised me, however, is that the average daily transactional value of these amounted to $4.17mn. This gives Own a NVT of 4.18, which is unusually low, and, if accurate, indicative of serious undervaluation. Now, my calculations are all done manually, and, if I use CoinPaprika’s data instead, we find the average daily transactional value to be closer to $750k, which would give Own a NVT of around 23.8; a much more reasonable figure and yet one that still indicates relative cheapness.

I am unsure about the reason for such a disparity between my figures and CoinPaprika’s, as I do not know their methodology. I simply calculate the total value of transactions in CHX for a month, divide it by 30 and multiply the result by the price of the token. This is, of course, a more rudimentary means of calculation than other sources may use. Regardless, it must be said that there is clearly non-speculative use of the CHX token taking place.

Moving through the remaining General metrics, I’d like to first highlight Own’s Volatility of -0.03848; a figure that places Own in the middle of the pack of coins previously reported on. This is roughly the same degree of 30-day volatility as NKN and Cashaa.

Now, let’s take a look at the buy-and-sell-side Liquidity metrics:

Own had buy support of around 5.29 BTC across its listed exchanges, equating to 0.16% of its Network Value. This is actually rather weak, placing Own towards the bottom of the list when compared to the other coins featured in these reports. Of course, buy support is extremely dynamic, particularly around current prices in the orderbook; that said, Own’s Liquidity is weaker than most projects reported on.

And how about its sell-side liquidity? Is the lack of buy support mitigated by an equally low desire to sell? Well, I calculated there to be ~1.18mn CHX available to buy on exchanges, equating to 1.55% of the circulating supply. This, again, places Own around the middle of the pack, with less supply available on exchanges than MonetaryUnit, CloakCoin, Bismuth and Bettex, for example, but more available for purchase than Ubiq, Trittium, Bulwark and Cashaa.

However, unlike the majority of coins thus far featured in these reports, Own does not yet facilitate staking nor does it yet have a masternode network (or its equivalent). As such, there are no real profit incentives to deplete sell-side liquidity, thus this is indicative of a strong desire to hold CHX tokens.

Finally, before we move on from evaluating the General metrics, let’s discuss those related to volume:

Own has traded $2.64mn of volume over the past 24 hours, equating to a whopping 15.09% of its Network Value. For those that have been reading the blog for some time, you’ll know that I like to see a figure of 1% or greater Exchange Volume-to-Network Value (ideally Average Exchange Volume-to-Network Value) as an indication of interest, so 15.09% is insane. Further, it’s not a one off, as Own has traded $1.66mn on average daily for the past month, equating to 10.5% of its Average Network Value for the same period. This is by far the highest Average EVNV of any coin I’ve previously reported on and there is undoubtedly significant interest in Own, at present.

Now, this must taken in consideration with the fact that it is not traded on any of the Real 10 (so calculated by the work from Bitwise); thus there is a strong possibility that a large part of this volume may be a symptom of wash-trading.

Now, moving onto supply emission, as CHX was created via ICO, all available tokens are already minted, with some locked and some in circulation. However, there is zero further supply emission to be had; all that will change with regards to circulating supply is the portion of the total supply that is vested and thus released (or rewarded to the network’s validators once the mainnet is launched, as we shall discuss a little later).

Given the above, the annual inflation rate must be calculated as 0%, providing no headwinds for price growth in the future. With no tokens left to come into existence – and the sustained high volume being traded – I do not doubt that CHX can sustain current prices; in fact,any decrease in price must be a symptom of distribution from a holder (be it a large holder or a small fish). It is the nature of the distribution that tells us whether we should be buying or selling.

And so, let us take a look at the Own rich-list:

There are 2922 holders of CHX currently, with 7.33% of the total supply controlled by the top 10 addresses; 11.04% controlled by the top 20; and 22.58% controlled by the top 100. I have already pointed out the caveats to this earlier in the report, so I shall refrain from going back over them. Suffice to say, for an ICO, this is quite impressive decentralisation of supply.

And what is the current activity amongst the top 20 richest holders?

Well, the 5th-richest (discount the 3 aforementioned publicly-held addresses – thus, in real terms, the 8th-richest) is in active and heavy accumulation, adding ~750k CHX to his position over the past month. That’s around $140,000-worth of Own. Further, 3 of the top 20 addresses added small amounts to their positions over the past month (between 7k CHX and ~100k CHX). Most importantly, there was no distribution from the top 20 addresses in the past 30 days.

As we will see in the Technical section, price has decreased over the past month by around 25% against BTC. Who was selling? Clearly not the largest holders.

That concludes this section on Metric Analysis. Onto the Own 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.

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

Twitter Followers: 16,103

Tweets: 1,221

Average Twitter Engagement: 0.4%

Facebook Likes: 33,896

Facebook Posts (30-Day)23

Average Facebook Engagement: 0.01%

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

Twitter:

Whilst the Own Twitter account does have a large audience, its engagement rate is quite poor relative to other coins. That said, in RivalIQ’s report, we find that the average Twitter engagement rate across all industries is 0.046%, which means that Own’s engagement rate is currently 8.69x greater. Further, the average engagement rate for the Media industry (the most relevant in the report) is 0.013%, thus Own’s is 30.77x greater. Unfortunately, Own’s engagement rate is lower than around 10 other coins that have featured in these reports, placing it joint-4th from bottom.

Facebook:

Now, Facebook, unlike for many cryptocurrencies (but a common occurrence amongst ICOs), is Own’s largest audience, with close to 34,000 Likes. This is twice the audience size of Cashaa; the token with the second-largest Facebook audience from previous reports. Very impressive. They also commit to regular updates, with 23 posts in the past month.

However, this is where the positives come to an end, with a measly 0.01% average engagement rate over the past 30 days. Given the vast size of the audience, one might be able to forgive lower engagement rates, but 0.01% is rather pathetic and highly suggestive of a completely disinterested Facebook following.

Own’s average Facebook engagement rate is also lower than the average across all industries of 0.16%, and lower than the Media industry average of 0.08%. This needs some attention.

Telegram:

The (official) Own Telegram group contains ~5500 members. There is also an unofficial group with over 800 members where discussions can be had on more general topics, as well as on price. However, for the purposes of my research, I have mainly stuck to a detail evaluation of the official group.

The group’s pinned message contains all relevant links, alongside the identities of the core team members to prevent fraudulent behaviour. This is is one of the disadvantages of a Telegram group over a Discord, as much of the important, even critical, information can be lost (even with a pinned message), whereas in a Discord group one often finds clearly segmented sections for each topic.

Nonetheless, the Telegram group is of moderate size – small relative to Own’s other platforms – but the conversation is constant between members, with thousands of messages posted over the past week. This is great to see, and a far-cry from the poor engagement found on their other social platforms. I also found that the CEO makes a concerted effort to respond to questions and make himself known amongst the group’s members, which is promising. Much of the current discussion centres on the upcoming token swap, with CHX migrating from ERC-20 to Own’s native blockchain. This is currently in testnet, with the Mainnet set to go live this quarter. The token swap is due to conclude in June, with all network nodes expected to also be transitioned to the native blockchain by that point. Further, new exchanges are expected to be announced for Own in April.

The community and the team seem to push out regular links to relevant blog posts, with there seeming to be a detailed blog post available for all manner of questions. Within the group itself, however, I also found that Own is expected to have a three-pillar products & services gateway for equity tokenisation, with two pillars already released and in use: Registry (via the Decentralised Share Register > Issuance (via the FAST platform) > and a third, unannounced pillar, which is expected to be a secondary market for security tokens.

Regarding CHX’s use-case amongst all these products and services, I found that the token will be used to reward Validator nodes on the network and delegates via DPOS, following the token swap. Also, a lockup in CHX will be required by a business looking to issue an STO, amounting to 1% of the capital to be raised. Further, all transaction fees will be paid in CHX, whilst clients will deal solely in fiat. Validator nodes will amount to 500,000 CHX.

Reading this, I felt as though more use-cases could be constructed for the token, given the context of the project itself.

That said, the Telegram group was highly informative and engaged.

BitcoinTalk:

The (new) Own BitcoinTalk thread was created on 31st January 2019, and has since generated 63 posts spanning 4 pages in 55 days. This equates to 1.15 posts per day, on average.

The old thread, from when the project was named Chainium, was created on November 20th, 2017, and is still the thread linked to on Coinmarketcap. There have been 22 posts on it in the past 90 days.

Regarding the content of the old thread, much like the Telegram group, the discussion is largely focused on the token swap and the launch of Mainnet. There is also a lot of price discussion, and that’s about all there is.

Moving onto the new thread, it is much more active, with good use of branding in the announcement itself and a plethora of useful links for new users. Within this announcement, token sale statistics are linked for full transparency, as are links to blog posts on use-cases of the token and the company itself. Graphics are provided to ensure accessibility, and this is clearly much stronger than the old thread. Emphasis is placed on the imminent move to the native blockchain, as well as on the implementation of DPOS.

More importantly, information regarding Own’s products and services is visible in the announcement, with a series of Medium blog posts, Q&As and interviews linked below each one to provide further insight. Unlike most announcements on BitcoinTalk, the problem is perhaps an overload of information rather than a lack of it (though, of course, this isn’t really much of a problem for those that want to make informed decisions). Not only does this show a commitment to keeping the community in the loop, but it also shows a commitment to onboarding new potential users.

Regarding the rest of the content of the thread, there are 21 active posters, with lots of genuine interest shown in the project. I discovered that the FAST 2.0 platform launched in February, allowing businesses to issue shares and raise capital whilst remaining fully regulated and compliant inside 10 weeks. Impressive stuff.

YouTube:

Unlike most projects, Own has at least made an effort to harness the power of YouTube in a bid to strengthen its brand identity and grow its community. As such, I have made an effort to spend some time going through the material on their channel.

The channel has 840 subscribers – not a large audience but a solid enough foundation. More impressive, however, is that the channel has 332,000 views despite this small audience. They have uploaded 52 videos in total, with regular uploads being the norm (at least two a month). Of these videos, many are long-form AMAs with the CEO, which is great to see, along with promotional/marketing videos for specific products and services. The most popular video is an introduction to Own that has 123,000 views, in which the viewer finds out about Own’s dual-equity blockchain that provides access to the 99% in business that cannot, for whatever reason, access traditional funding. The 2nd-most popular video is more like an advertisement; one that is well-produced and informative and has 108,000 views. All productions are very well-branded, also.

The MyOWn promotional video is particularly great, being concise, informative and engaging, and, importantly, highlighting the UI/UX of the app for potential new users.

The best video on the channel is perhaps the FAST 2.0 promotional that walks the viewer through the process of issuing a new security token through the platform. The process is incredibly simple and the platform looks great. This does a wonderful job of strengthening the Own brand, in my mind, particularly within the STO domain.

I also watched the most recent AMA with the Own CEO, and this was perhaps the most illuminating part of the research process. There is a clear and palpable understanding of the need to address (and progress) both the crypto-based audience and a wider, more mainstream audience given Own’s aspirations. They are focused on simplifying processes and the copy on their platforms and website, whilst also refining the usability and  performance of the products themselves. They are also working on a foundational ebook on the topic of STOs; this is exactly what is needed to onboard more users and grow, as many new users will be unfamiliar with STOs, and so, providing an  educational resource like this rather than relying on outside sources of information is paramount. Significantly, Own already have 9 “proper” clients for STOs, with “proper” meaning clients that are having a prospectus created with full compliance issuance expected – a process that, as I mentioned earlier, takes 10 weeks. It’s very promising to see that there is demand for the service at the earliest stages of it being released.

Overall, very positive.


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 14 core team members listed on the website, along with 7 advisors. There are 7 contributors to the Github.

Of the core team, there are 3 co-founders with experience in software engineering, global equities and general technology development. Other roles including a Managing Director, Head of Business Development, Head of Marketing, UX Designer, Blockchain Developer, Web/App Developer, Senior Software Architect, Business Analyst, Software Developer, Content Strategist and a Junior Web Developer.

Overall, there is clear strength, breadth and balance to be found here.

Website:

www.weown.com

The website is very professional, as I would expect from an ICO. It is well-designed and features strong branding. The homepage displays all products and services available, and the company’s aim is clear to all visitors:

“Tokenizing technology for financial services.”

The copy is concise and informative but also engaging, which is great to
see and somewhat rare amongst altcoin websites. The UI/UX is easy-to-navigate and smooth, and the navigation menu, which is often my biggest problem with websites in this space, is very much useful and relevant. There is also another menu available that directs visitors to relevant information by customer type (Market Operators, Business, Investor and Developer), further ensuring accessibility.

The current products and services are highlighted (DSR; FAST; MyOwn; and white-label blockchain services). Further, there is an option to Book A Demo. All social links are available at the bottom of the page.

There is both a native blog and a Medium blog, featuring regular, long-form content across all possible manner of topics to keep users and investors informed. There is also a Day in the Life series focused on individual team members to allow users to get to know the team and their responsibilities, creating more trust and confidence in the company itself.

There is a beginner’s guide that I highly recommend reading.

Our Story contains Own’s roadmap, as well as detailed information on the core team. Overall, the website does a very good job of emphasising the benefits of the Own ecosystem and how its products and services would be of use to different kinds of users. I am very impressed – this is perhaps the best website of any coin previously reported on.

Roadmap:

https://weown.com/our-story

There is a brief visual roadmap provided on this page, featuring a history of Own from July 2017 to March 2019. No future roadmap is provided and there is a serious lack of detail here:

The official launch of the company was in August 2017, under the name of Chainium. The ICO began in March 2018, along with the opening of offices in Liechtenstein, Bosnia and the United Kingdom. In July 2018, the FAST 1.0 platform was released, and in September 2018, the Decentralised Share Register was launched under the Own brand-name. There were hundreds of sign-ups in the first few weeks. In November 2018, Own won the Most Innovative Company at Sarajevo Unlimited, and, in December 2018, the MyOwn app was released. February 2019 saw the launch of FAST 2.0, and March 2019 has seen the establishment of the STO Alliance.

Overall, good for a brief history of the company but gives no sense of vision or direction and lacks detail. Strange, given the quality of the website.

Whitepaper:

https://weown.com/uploads/editor/files/Own%20Platform%20Architecture%20-%20Technical%20Whitepaper.pdf

The whitepaper is 13 pages in length, and, though it states it is a technical whitepaper, it is largely jargon-free and accessible. It introduces the Own platform and the custom-built blockchain, whilst emphasising the disadvantages of the traditional model and how Own seeks to improve upon them; these include trust, efficiency, speed, costs, permanence, and accessibility. Graphics are also included to ensure user comprehension.

The paper also introduces the idea of dual blockchains connected by ‘smart oracles’, allowing communication between private and public data. The three layers to the Own platform are mentioned here: storage on the dual blockchain, services using APIs and SDKs, and the app tier.

There are also two types of nodes in the Own ecosystem: Validator and Client. Validators create new blocks and handle consensus and clients view and submit transactions. The network will use Delegated-Proof-of-Stake for consensus. CHX, as a token, will incentivise node operators and work as a utility token for transaction prioritisation.

In general, the whitepaper is easy to understand, even for those unfamiliar with the technology.

Overall, informative and concise, though it could include more about future plans and the vision, as well as information on the team.

Wallets:

All ERC-20-enabled wallets, until token swap to native blockchain.

General:

“Own is on a mission to change the equity market, giving market operators
and enterprises greater control over the way they raise capital and manage financial assets – cutting out costly, time-consuming intermediaries in the process.”

That pretty much sums up the Own identity and vision. I’d like to add that the project is clearly seeking to create an end-to-end equity issuance and servicing platform to compete with IPOs and private funding, which is where the Financial Asset Security Tokenization (FAST) platform comes into play. This is where businesses will launch and monitor their issuance, create financial assets, manage data via the DSR, facilitate voting and allow for dividend payment; a beautifully simple process on a highly functional platform. The core services and share registration are also free – impressive stuff.

And that concludes my fundamental analysis of Own.


Technical

I have provided charts for both, CHX/BTC, and CHX/USD, as I believe they depict some very interesting things about Own’s price-history.

Most importantly, Own has never experienced a full market cycle; in fact, it recently begun its first bull cycle and it is certainly still experiencing that cycle.

CHX set an all-time high in February at 9000 satoshis and $0.34, having spent 130 days inside an accumulation range above all-time lows below 200 satoshis; a rise of over 5000%. It has since dropped off, now trading above resistance turned support around 5k satoshis. This decline has occurred on declining volume, which is the only reason why I think that this cycle may yet have some steam in it. That said, there is a clear possibility that the current bull cycle has ended and that prices may need to play out the latter stages of the cycle (through depression) before a new cycle can begin.

However, when you look at CHX/USD, we are trading at a very significant level; the initial high set in May 2018 around $0.16. This has become a level of resistance turned support, and there is a likelihood that this indeed the bottom of the bull cycle for CHX, where we may see a period of consolidation above $0.16 before a new bull cycle begins to tackle all-time highs.

A trade opportunity is present, as such, with an entry at current prices, a stop loss at $0.14 and a target of $0.35, giving 2.5 reward-to-risk. In truth, there are more profitable opportunities present for the traders in this market.*

*The above analysis is from 26th March, when I first drafted this report – price has since moved towards the resistance turned support around 4000 satoshis, offering a much more opportune entry.


Conclusion

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

My final grading for Own is 9 out of 10.

Own scrapes a 9, despite its lack of engagement on Twitter and Facebook, primarily because of its palpable commitment to transparency and keeping users informed, and, of course, its fantastic array of working products and services in a growing and lucrative space.

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.


AD: I’d like to conclude this blog post by thanking one of the sponsors of the blog: Nexo.

Nexo is the foremost crypto-backed loans platform, allowing you to get cash without selling your crypto. Nexo delivers you cash or stablecoins via 45+ different currencies direct to your wallet or bank account.

The platform has already processed over $300m, with all client funds secured by BitGo and insured by Lloyds London. Nexo also offers interest on stablecoin deposits of 6.5%, with full withdrawal flexibility; providing a consistent revenue stream for your unused crypto.


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Coin Report #18: BitTube

AD: Before I begin this post, I’d like to briefly mention Bitcoin.Live, who are sponsoring my blog.

Bitcoin.Live offers regular, detailed content on their free-to-access blog, created by a panel of analysts (including Peter Brandt), and covering all manner of market-related topics. I found both the video material and the blog posts to be genuinely insightful, with many differing analytical perspectives available for viewers and readers. The platform also offers premium content for paying subscribers who find value in the free material, with daily videos, alerts and support provided. Check it out and bookmark the blog.


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

Welcome to the 18th Coin Report. In today’s report, I will be assessing the fundamental and technical strengths and weaknesses of BitTube. 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

BitTube has been a project on my radar for a long while now, as I found their initial premise both compelling and of great purpose. Given the congestion in my current schedule and the fact that these reports take up to 20 hours to produce, I simply could not find the time to do a deep-dive; that is, until BitTube booked in this Sponsored Post spot. As such, I was very much excited to get cracking and wade into the vast pool of research I knew I’d have to become familiar with – I did not quite anticipate just how much research I’d need to do, and there is likely stuff that I have still missed.

That said, I do believe this report will be comprehensive and provide some insight for those with even a modicum of interest in BitTube. In fact, one of the primary reasons I was interested in doing the research required was to inform myself of whether or not the project is worth investing in, given my aversion to highly inflationary coins (which is the surface-level familiarity I had with the project prior to this report).

I hope the 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 BitTube prior to reading on, here are some primary links:


Fundamental

General:

Name: BitTube

Ticker: TUBE

Algorithm: CryptoNight Saber (Proof-of-Work/Proof-of-Verification)

Sector: Decentralised Monetization Solutions

Exchanges: Bittrex, Upbit, TradeOgre & Livecoin

Launch Overview

BitTube (TUBE) was launched in January 2018, initially branded Interplanetary Broadcast Coin (IPBC), before rebranding shortly after. TUBE operates on the CryptoNight algorithm, but forked to its own variation (CryptoNight Saber) to remain ASIC-resistant. The coin utilises a dual Proof-of-Work/Proof-of-Verification consensus mechanism, where Proof-of-Verification relates to its AirTime facility, which verifies time spent engaging with a given content creator/publisher and rewards viewers and publishers based on that time. There was no premine or ICO, and TUBE utilises a progressively diminishing block reward.

Price-History Overview

Having only been in existence for a little over a year, there is little price-history for TUBE. That said, it has experienced numerous mini-cycles, all of which we shall analyse in the Technical section. For now, it will suffice to say that TUBE formed its all-time high against BTC at ~6100 satoshis in June 2018, and its all-time high against the Dollar at $0.44 on the same day. It has since lost around 90% of its value against the Dollar, but appears to be beginning a new cycle.

Project Overview

Whilst the project began with a relatively simple concept of providing a peer-to-peer content sharing and streaming platform that was censorship-resistant (to combat the current problems apparent on YouTube), it has since developed with a much broader scope and vision for the future.

As stated in their early whitepaper:

“BitTube is building a worldwide innovative platform, in which performance and reward for copyright are brought to a new level of fair use. In the future, this reward will no longer depend on your living area, advertising companies, data service providers or arbitrary decisions. With BitTube, the owner of the content or the owner of copyright will receive their payment from all over the world, based on how often their content is accessed.”

I am intrigued to see how BitTube is faring with regards to those goals only 15 months on from launch.

Let’s begin our evaluation with some Metric Analysis:


Metric Analysis:

Below are listed a number of important metrics, all of which are accurate as of 8th April 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: $0.05 (944 satoshis)

Exchange Volume: $151,118

Circulating Supply: 151,015,095 TUBE

Total Supply: 151,015,095 TUBE

Maximum Supply: 1,000,000,000 TUBE

% of Max. Supply Minted: 15.1%

Network Value: $7.48mn (1425.88 BTC)

Network Value at Max. Supply: $49.531mn

Category: Midcap

Exchange Volume-to-Network Value: 2.02%

Average Price (30-Day): $0.04

Average Exchange Volume (30-Day): $397,221

Average Network Value (30-Day): $5.325mn

Average Exchange Volume (30-Day)-to-Network Value: 7.46%

Volatility* (30-Day): -0.2101

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): 110.57%

% Price Change USD (1-Year): -68%

USD All-Time High: $0.44

% From USD All-Time High: -89.1%

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): 5.97 BTC

Liquidity-to-Network Value %: 0.42%

Supply Available on Exchanges: 6.73mn TUBE

% of Circulating Supply Available on Exchanges: 4.46%

*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: Current block reward = ~405 TUBE. Progressively diminishing rewards with each block. Average reward per block for the next 365 days = ~375 TUBE. 45% of block reward distributed via AirTime to publishers and viewers with a 75/25 split.

Average Block Time: 2 minutes

Current Block Height: 310,828

Annual Supply Emission: ~98,550,000 TUBE (930.31 BTC at current prices)

Annual Inflation Rate: 65.26%

Circulating Supply in 365 Days: ~249,565,095 TUBE

Analysis:

Given the integrated privacy of CryptoNote-based coins, Distribution analysis is impossible. Further, BitTube does not have a masternode network, and so the pile of metrics is somewhat lessened for this report. That said, there is plenty to get stuck into, especially given the unique case of AirTime, which I shall discuss at the end of this section, in conjunction with Supply Emission & Inflation.

First, however, let’s run through the General metrics:

To begin with, I’d like to discuss the metrics related to buy-side and sell-side Liquidity. I calculated that BitTube had 5.97 BTC of buy support within 10% of current prices, equating to 0.42% of its Network Value. This is the fourth-highest Liquidity of all coins previously reported on, behind only CloakCoin, Altbet and Stakenet. This is quite promising, but how about its sell-side liquidity?

Well, I calculated that, across all listed exchanges, there was around 6.73mn TUBE available in the orderbooks, equating to 4.46% of the circulating supply. This is actually the third-highest percentage of the circulating supply available on exchanges for all coins from prior reports. Thus, it seems that though there is relatively high demand at current prices, there is a clear disincentive to hold, too. Perhaps this shall be explained when we get onto emission…

Next, let’s take a look at Volatility:

TUBE had 30-day Volatility of -0.2101; the highest degree of volatility found in coins from previous reports – twice that of the second-highest, MonetaryUnit. Now, it must be mentioned that these volatility figures are calculated using the $ price of the coin, as this is the form in which historical data is presented on Coinmarketcap and CoinPaprika. As such, the recent extreme volatility of Bitcoin will have played a large part in the extremity of this figure, thus perhaps it is better to wait until we analyse the chart before making any comments on this. However, I will say that I don’t like to enter positions during times of high volatility; low volatility is the optimum environment for accumulation, which is when smart money buys.

There are a couple more individual metrics I’d like to highlight before moving onto those related to volume:

Firstly, it is interesting to see that price has increased over 100% over the past month in Dollar-terms; something that would also put me off entering a position. However, when we look at price from all-time highs, BitTube is still almost 90% off them. This will be something I unpack in more depth in the Technical section, but it’s worth keeping in mind that, despite recent price movements, BitTube may still be relatively cheap.

Secondly, whilst there was no premine, as is mentioned amongst the metrics, BitTube do have a development fund that is taken from each block reward. I’ll dig into this when we get to supply emission…

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

BitTube traded $151,118 of Exchange Volume over the past 24 hours, equating to 2.02% of its Network Value. Pretty impressive, right? Not nearly as impressive as its Average EVNV, which comes out at 7.46%, based on an average of ~$397k of daily volume traded for the past 30 days, with an Average Network Value for that period of $5.325mn. This is the highest figure for any coin of the previous 17 Coin Reports, beating out NKN, which had Average EVNV of 6.71%. What this tells me is that there is significant and sustained interest in BitTube at present.

Now, what about supply emission? This is the sore point for many with regards to BitTube, but how does it really play out?

Well, TUBE’s block reward time of 2 minutes means that 720 new blocks are minted daily. Looking at the block reward curve provided earlier, we can estimate the average block reward for the next year to be roughly 375 TUBE per block, giving an annual supply emission of about 98.55mn TUBE. This equates to 930.31 BTC at current prices, or $4.881mn, giving BitTube an annual inflation rate of 65.26%; the fourth-highest of any coin previously reported on.

Whilst this paints a rather bleak picture with regards to headwinds for price growth, it isn’t necessarily the annual supply emission that is the be-all, end-all, but whether BitTube is trading enough volume to sustain current prices despite emission.

To determine this, we must look at the relationship between Exchange Volume and Supply Emission:

Given an annual supply emission of 98.55mn TUBE, we can work out that the average daily supply emission will be 270,000 TUBE, or $13,373-worth at current prices. This doesn’t seem so devastating, especially when you put it into the context of TUBE’s Exchange Volume of $151k, and even less so relative to its Average Exchange Volume of $397k, which cover the average daily supply emission by 11.3x and 29.7x, respectively. Thus, there is plenty of sustained trading volume for current prices to be maintained and to soak up daily supply emission. Further, BitTube’s Liquidity of 5.97 BTC is 2.34x greater than the average daily supply emission.

In short, decreasing prices in BitTube are likely not a symptom of inflation, but rather selling from current holders, be it weak hands or smart money distribution. Now, since there is no rich-list and CryptoNote coins have integrated privacy, there is no real way to tell the difference, except to analyse volume on the chart, which we shall do a little later…

Finally, to conclude this lengthy section, let’s talk a little about AirTime.

AirTime is BitTube’s novel feature that allows content creators and viewers on their platform (and beyond) to be paid for time accrued. This is facilitated by Proof-of-Verification, and the rewards are distributed from the overall block reward. 40% of the block reward goes to miners, who continue to maintain the network, but, as of January, 45% (up from 30%) of the block rewards now go to AirTime. The split is 75/25 between content creators (or publishers) and viewers.

What does this mean for rewards distribution and earning power?

Using the 45% distribution and the average block reward of 375 TUBE for the next year, we find that there is 33.26mn TUBE available for publishers and 11mn TUBE available for viewers, equating to $1.66mn and $550k at current prices, respectively. That’s over $2mn of rewards available for simply engaging with content or having your content engaged with. As someone who utilises a blog to distribute material, this is an alluring concept…

And that concludes this section on metrics, onto the BitTube 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.

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

Twitter Followers: 10,838

Tweets: 4,573

Average Twitter Engagement: 0.75%

Facebook Likes: 799

Facebook Posts (30-Day): 45

Average Facebook Engagement: 2.44%

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

Twitter:

As is expressed in this benchmark report, the average engagement rate on Twitter across all industries is 0.046%; BitTube has an engagement rate that is 16.3x greater. Further, the average engagement rate for the Media industry (the most similar industry in the report) is 0.013%; BitTube’s is 57.7x greater. This is despite BitTube’s fairly large following of almost 11,000, which is the third-largest of all coins previously reported on. However, whilst impressive relative to global benchmarks, BitTube’s Twitter engagement isn’t as impressive against other cryptocurrencies: in fact, it is slap bang in the middle of the pack relative to coins from previous reports.

Facebook:

Concerning Facebook, it is great to see that BitTube do not neglect their page, despite having only a fraction of the following that their Twitter account has. In fact, the team posted 45 times over the past month, showing a commitment to engaging with all platforms in equal measure. More impressively, the engagement rate is 2.44%, which is 15.3x the cross-industry average of 0.16%, and 30.5x the Media industry average of 0.08%. It is also the third-highest engagement rate on Facebook of all coins previously reported on. Good stuff.

Discord:

The BitTube Discord group contains 4264 members; a moderately-sized group.

As is the norm for Discord, there are channels dedicated to all possible relevant (and irrelevant) topics.

Announcements is updated once or twice a week, with progress updates, Medium posts and other useful information. In the past month, there have been announcements on the launch of the AirTime extension on Firefox; the removal of the adult content section of the BitTube platform (voted for by users); significantly, the issuance of a banking license and exchange license for BitTube, allowing for direct exchanges between TUBE, other cryptocurrencies and fiat within the AirTime extension & in time for the debit card release that is upcoming; an update to the Firefox extension; and the AirTime module, which allows publishers to register their domains to receive AirTime rewards from guests and not just visitors that already have the extension installed – a huge step for value generation to the end-user.

Tweets contains all BitTube-related tweets, ensuring the community remain informed, and Dev Updates is yet to be used.

General, being the most used channel, has constant discussion, near enough 24/7. I actually struggled to evaluate this channel, as a stream of messages continued to come through as I attempted to read back and scroll through… no bad thing, mind. There is clearly a strong, engaged community with a genuine interest in the project’s development and growth. Discussion covers all manner of topics, including: AirTime in practice (currently around $0.60 per 1000 views on a 4 and a half minute video for creators); crowd conviction in the product and its advantages over YouTube; YouTubers leaving due to their censorship; the upcoming debit card; the new option for buying TUBE with a credit card directly within the browser extension; price; AirShare, which will allow for peer-to-peer file sharing; and more general conversation.

Support sees community questions and issues answered and resolved promptly; Suggestions has some activity, in which the community do put forth some ideas for the project’s general direction and development (such as a referral link for AirTime traffic); and Community Treasury allows for discussion on what to use the funds distributed from the block reward on.

That pretty much concludes all of the primary aspects of the Discord. Overall, promising stuff. Most significant is the palpable community interest.

Telegram:

There are 11900 members of BitTube Telegram.

The pinned message links to a Telegram channel for BitTube TV – a one-stop hub for all BitTube-related content.

Despite the size of the group, I actually found that it was more inactive than the Discord, with a handful of daily messages but certainly 24/7 discussion. It was great to see Saber (the CEO) active here, however, answering community questions and generally getting involved. A lot of the discussion that does take place reflects that found in the Discord, with much of it centring on the economics of AirTime; some users are dissatisfied with their TUBE payouts, but this is naturally a symptom of low traffic and low viewing time.

Generally, the group is constructive with regards to the development of the project, but I was surprised at the low level of activity. After all, it is almost 3 times the size of the Discord.

BitcoinTalk:

The BitTube BitcoinTalk thread was created on January 31st, 2018, and has since generated 1848 posts spanning 93 pages in 428 days. This equates to 4.37 post per day, on average. However, in the past 90 days, the thread has had 70 posts via 32 individual posters, giving an average of 0.78 posts per day; a significant decline in engagement.

PR material, such as development updates and blog posts, are pushed out here, but much of the recent discussion centres around price. That said, there was some interesting debate on the implications of uploading graphic or inappropriate content, and whether that should be censored… I’ll leave you to make up your minds on that question.

And that concludes this section on the BitTube Community.


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 information on the website with regards to the team. However, there are 203 Github contributors, and 20+ employees can be found on LinkedIn.

I did find information on the founders here, but, whilst I am aware of the team’s general transparency, I find it an oversight to not include this information on the website.

Anyway, the CEO (Saber Maram), the CMO and the CFO have cumulative experience of around half a century within technology and marketing, so there is clear strength and balance to be found here. It would make sense to leverage this and emphasise it in the places that new users are most likely to be gained.

Website:

www.bittubeapp.com

The website is clean, well-designed and somewhat well-branded, though it could have a stronger identity by utilising its branding a little more. The copy, however, is not as engaging as I expected it to be, with much of it written in list form but presented in paragraphs, so each sentence is somewhat unrelated to the previous – this can work if the copy is presented differently, but much of it doesn’t flow particularly well. That said, it is concise and informative. Also, the AirTime sub-section does not have this issue, featuring engaging, detailed copy and a Find Out More tab to further inform visitors.

The benefits for end-users and advantages of the platform, however, are very clear and well emphasised on the site, with each sub-section featuring relevant links, useful information and accessible visuals. Further, the site makes the process of onboarding new users seamless by placing the Download Extension button front-and-centre, as well as the option to refer friends.

Wallets are clearly linked, but social channels are hidden away in the footer. There is a glossary at the bottom of the homepage, which is very useful for newer, less familiar users. Further, live support is available. There is also a WooCommerce plugin that is visible to encourage merchant adoption.

In general, the UI/UX is appealing and easy-to-navigate but could be refined – for example, the punctuation at the top of the homepage is inconsistent.

There is also a Knowledge Base full of answers to relevant questions, though it is also hidden away in the footer. The native blog is not even visible, and neither is the Medium blog, despite the fact that both exist and are regularly updated – why is there no clearly accessible link to these?

Overall, the site does what it should to encourage user growth but is in need of a little refinement.

Roadmap:

https://medium.com/@Bit.Tube/weekly-update-17th-of-december-insights-into-2019-40485419818c

Whilst there is no native nor extensive roadmap to be found on the website (or elsewhere), there is a short-term roadmap that can be found via the link above.

In it, users discover that AirTime’s launch within the browser extension occurred in Q1, followed by support for major browsers and a hard fork to change the reward distribution. Q1 was the anticipated period for migration to the new Bittube platform, but this is yet to take place.

In Q2, said migration will occur, followed by platform upgrades to introduce staking and lending of TUBE, a system to determine account reputation and peer-to-peer rewards.  There is also an expectation that mobile support for the new platform will become available.

Overall, this is a little disappointing with regards to presentation and lack of detail, but BitTube’s direction is clear.

Beyond this short-term roadmap for Q1 & Q2 2019, there is also one that depicts the history of the project, which I have printed below:

Whitepaper:

https://www.proofofreview.com/wp-content/uploads/2018/10/BitTube-WP-171018.pdf

The whitepaper linked above is not to be found anywhere except directly through Proof of Review. I had to search “BitTube Whitepaper” in order to find a link to it, which is bizarre.

Regardless, the document is a 14-page presentation that highlights the main advantages of BitTube; the general purpose of the project; the function of TUBE; and it contains important information on reward distributions and possible future premium features to be integrated to the platform. These include:

  • Transactional Video On Demand – paying for premium content with TUBE.
  • Subscription Services – TUBE is charged on a time basis for certain channels.
  • Viewer retention and optimisation – publishers will pay TUBE to have their content auto-played to viewers following the conclusion of a video.
  • Promotion – publishers pay to advertise their content
  • Music videos and original content – expected this year, and will involve BitTube getting licences for premium and popular content, as well as producing their own.

Overall, the document is outdated with regards to timelines and certain specific details and updates (which is perhaps why it is not linked anywhere). That said, I found it to be highly informative concerning the use-cases it is developing.

Wallets:

The primary means of storing TUBE is the browser extension, but there is  also a desktop wallet for all operating systems, an integrated wallet on the platform, as well as an iOS and Android wallet.

General:

Whilst I feel that I have covered quite a lot already, there is much on the development of BitTube that perhaps doesn’t fit into any one of the above sub-sections and/or that I’d like to discuss at length here, in conclusion of my fundamental analysis. As such, below, I have provided some brief discussion on recent topics of interest related to the project, separated by their central focus.

The OTC Deal:

Firstly, let’s talk about the recent debacle on Bittrex that led to TUBE dumping to around 100 satoshis. I listened to this H4SH48 podcast with Saber that cleared things up. It turned out that an escrow service cheated both parties that were entering into a large OTC deal; one of between 6-10mn TUBE in size. This led to between 35-50 BTC-worth of TUBE being dumped before trading was halted, but the attack was mitigated by the team co-operating with Bittrex and the funds were frozen. Price is now back up above 900 satoshis, and the whole incident seemed to be very well handled by BitTube.

Recent Updates:

There is quite a lot that seems to be going on at the moment with BitTube, so I took to their Medium blog to summarise recent and upcoming developments:

  • The company was granted their banking and exchange licences ahead of their debit card release.
  • The Airtime extension also now allows for TUBE conversion to any currency direct to your bank account. This is huge for TUBE’s value proposition, as it streamlines the process for creators getting paid without the necessity to use exchanges. Seamlessness is key to adoption, and publishers no longer need a familiarity with crypto to benefit from it.
  • A recent fork meant that AirTime rewards increased from 30% of the block reward to 45%, generating more revenue for publishers and viewers. This fork also implemented a 10% development fund from the block reward, up from 3% prior to the fork. This means that BitTube now has just shy of $500k annually at current prices to sustain development, meet the goals of their roadmap and improve their marketing campaign.
  • The AirTime extension had a VPN integrated, which is effectively free to use, as it is subsidised by your AirTime. The extension itself, I found, is currently a little bit buggy, however; Twitter doesn’t seem to enjoy it, for example, and often freezes with it active.
  • The AirTime module release allows publishers to generate income from guests without the need for them to have installed the extension – you register your domain and it tracks traffic and pays in TUBE.
  • Moving forward, the implementation of staking and lending functionality will increase revenue streams.
  • The primary goal of this quarter is to launch the new social video platform, which will be far more feature-rich, with cleaner UI/UX, and that will provide cohesion of the BitTube ecosystem and, most importantly, showcase the benefits of AirTime.

How BitTube Works:

So, given how much I’ve covered thus far, it may be useful to break down what exactly the project is attempting to do and how it works.

BitTube was originally seeking to be a decentralised alternative to YouTube but has since developed far beyond this, with its primary purpose to provide decentralised monetization solutions for all kinds of content; in doing so, also providing censorship resistance for publishers. AirTime allows publishers to get paid for simply creating (via Proof-of-Verification) rather than for having large audiences that ads are later fed to. The current content platform works using the IPFS (Interplanetary File System) protocol, which stores content peer-to-peer and removes the control of centralized storage systems. The platform is native to the web, using browser extensions to facilitate monetization of content. Further, monetization is also integrated for viewers, allowing viewers to be paid for time spent… well, viewing. This opens up the possibility for individuals of low-income backgrounds to supplement their incomes with their leisure time.

And that concludes my fundamental analysis of BitTube. Let’s take a look at the chart:


Technical

The BitTube chart is very messy, and that is often the case with coins that have high levels of supply emission early on in their existence. That said, there are clear levels of historical significance here, and multiple mini market cycles have played out over time.

After TUBE set its all-time high above 6k satoshis in June 2018, it followed suit with the rest of the market and bled out, dumping down to just below 500 satoshis in August. Price rallied over 3x from this low, all the way into prior support turned resistance at 1700 satoshis, forming a double top here and dumping back down to 500 satoshis in March 2019. We then saw price explode up and reclaim support around 8oo satoshis, also closing above the 200-day moving average. Prices peaked out again below 1700 satoshis, setting that level up as significant historical resistance, dropping off to where they now sit – the December 2018 range.

Volume had been low for most of winter in 2018, with the only real significant volume coming during the breakout in March 2019. I’d like to see the 800-satoshi support hold firm, and see a decent swing-trade opportunity for entries around 900 satoshis, with a soft stop-loss on a Daily close below 700 satoshis and a target of 1500 satoshis, offering 3:1 reward-to-risk.


Conclusion

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

My final grading for BitTube is 8 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.


AD: I’d like to conclude this blog post by thanking one of the sponsors of the blog: Nexo.

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Coin Report #17: HEAT

AD: Before I begin this post, I’d like to briefly mention Bitcoin.Live, who are sponsoring my blog.

Bitcoin.Live offers regular, detailed content on their free-to-access blog, created by a panel of analysts (including Peter Brandt), and covering all manner of market-related topics. I found both the video material and the blog posts to be genuinely insightful, with many differing analytical perspectives available for viewers and readers. The platform also offers premium content for paying subscribers who find value in the free material, with daily videos, alerts and support provided. Check it out and bookmark the blog.


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

Welcome to the 17th Coin Report. In today’s report, I will be assessing the fundamental and technical strengths and weaknesses of HEAT. 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

A couple of months ago, the team working on HEAT got in touch to book in a Coin Report to be published around the time of their recent platform release, which I shall cover a little later. Prior to this point, I had not heard of HEAT before and thus the research process truly began from scratch. In conclusion of said research, I found there to be many gaps, all of which shall be detailed. That said, there are certainly positives to take away from this report, too.

I hope the 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 HEAT prior to reading this report, here are some primary links:


Fundamental

General:

Name: HEAT

Ticker: HEAT

Algorithm: SHA256 (Proof-of-Stake)

Sector: Decentralised Asset Platform

Exchanges: HEAT Ledger & Cryptopia

Launch Overview

HEAT, or HEAT Ledger, was launched in the summer of 2016, building on the work done by NXT to create a “Gen 3.0” cryptocurrency platform. It operates using a dual Proof-of-Stake/Proof-of Presence consensus mechanism with 25-second block times. Proof-of-Presence allows users to be rewarded for storing a copy of the blockchain. Current block rewards are 3 HEAT for each of the two consensus mechanisms. The codebase itself is written in Java to ensure suitability for applications within finance.

The coin was created following an ICO that raised around $900,000 and ran from July 11th to August 8th. This equated to 1632 BTC at the time and led to the creation and distribution of 25 million HEAT in January 2017.

Price-History Overview

Given HEAT’s launch in July 2016, the coin has almost three years of very interesting price-history that we shall tackle in the later sections of this report. For now, it will suffice to say that it made an all-time high against Bitcoin in March 2017 in a huge spike to 65k satoshis. It made its all-time high against the Dollar in January 2018 at $3.03. Since these highs, however, HEAT has lost over 99% of its value.

Project Overview

HEAT’s core development is its HEAT Ledger platform that integrates a decentralised exchange, block explorer and multicurrency wallet, optimising for security, speed and scalability.

We shall see how it fares in this respect.

Let’s begin with some Metric Analysis:


Metric Analysis:

Below are listed a number of important metrics, all of which are accurate as of 31st March 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: $0.014 (350 satoshis)

Exchange Volume: $2,163

Circulating Supply: 39,713,357 HEAT

Total Supply: 39,713,357 HEAT

Maximum Supply: 50,000,000 HEAT

% of Max. Supply Minted: 79.43%

Network Value: $569,206 (139 BTC)

Network Value at Max. Supply: $716,625

Category: Lowcap

Exchange Volume-to-Network Value: 0.38%

Average Price (30-Day): $0.018

Average Exchange Volume (30-Day): $40

Average Network Value (30-Day): $709,831

Average Exchange Volume (30-Day)-to-Network Value: 0.01%

Volatility* (30-Day): -0.0538

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): +23.1%

% Price Change USD (1-Year): -93.4%

USD All-Time High: $6.74

% From USD All-Time High: -99.6%

Premine % of Max. Supply: N/A

Premine Location: N/A

Liquidity (calculated as the sum of BTC in the buy-side with 10% of current price across all exchanges): 0.115 BTC

Liquidity-to-Network Value %: 0.08%

Supply Available on Exchanges: 65,500 HEAT

% of Circulating Supply Available on Exchanges: 0.16%

*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: Current block reward is 3 HEAT for Proof-of-Stake and 3 HEAT for Proof-of-Presence for the next ~200,000 blocks. Following this, block rewards decrease to 2. More on this can be found on p27 of the whitepaper.

Average Block Time: 25 seconds

Current Block Height: 2298915

Annual Supply Emission: 5,402,136 HEAT (18.91 BTC at current prices)

Annual Inflation Rate: 13.6%

Circulating Supply in 365 Days: 45,116,493 HEAT

Staking:

Network Staking Weight: N/A

Staking ROI (Annual): Minimum 6.8%* (assuming all circulating supply is being staked)

*Calculated by dividing the annual supply emission rewarded to stakers by the circulating supply: 2,701,068 / 39,714,357 = 6.8%

Analysis:

Well, unlike for most Coin Reports, there is a little less to work through for HEAT, as its recent developmental changes and the lack of a fully-functional block explorer meant that I could not evaluate the coin’s distribution. Further, HEAT does not have masternode functionality.

However, there is still a fair bit to discuss, and I’ll begin with the General metrics:

Firstly, let’s take a look at Volatility.

However, I must first mention that HEAT is currently only traded on one exchange (its own DEX) with extremely low volume and liquidity whilst Cryptopia is undertaking work to get itself back online. As such, volatility was expected to be high. HEAT’s Volatility came in at -0.0538, meaning that it has actually had less movement than Trittium, Altbet and MonetaryUnit over a 30-day period. This can be explained by the lack of volume, and thus the lack of movement in price.

Now, let us take a look at Liquidity measures, all the while keeping in consideration that there is only one exchange at present:

HEAT’s Liquidity was calculated to be 0.115 BTC within 10% of current prices on the HEAT Ledger DEX, which equates to 0.08% of its Network Value. If I’m honest, I was actually expecting worse Liquidity than that, but it does still place HEAT fourth from bottom amongst the coins in previous reports. What I was surprised at is that, despite the lack of volume or even multiple exchanges, it still had slightly greater Liquidity relative to its Network Value than Cashaa – a multi-million dollar ICO.

Regarding its sell-side liquidity, I calculated that there was ~65,500 HEAT available on the HEAT Ledger orderbook, equating to 0.16% of the circulating supply; by the far the lowest figure recorded in these reports. Again, though expected given the lack of exchanges, does give some indication as to lack of desire for the holders of the other 99.84% of the circulating supply to sell at current prices. Overall, it indicates to me that, at present, there is a general lack of interest from buyers or sellers, and that is perhaps to be explained a little later when we cover Development.

Now, before we move on to cover volume and conclude the General metrics, I’d like to briefly mention price. HEAT’s current price of around $0.014 is over 99.5% below its all-time high of $3.03. I would generally expect this of a coin that is now abandoned or fraudulent or something to that effect, and yet HEAT clearly is neither of those things, given their recent platform release and the PR campaign that they have organised to begin around said release… as such, it is likely that there is indeed an opportunity here, yet the lack of an even somewhat liquid exchange is likely the very reason it is trading at such a discount; no one is able to buy any significant amounts, at least not without going over-the-counter. I expect the dynamics to change when the HEAT market is re-enabled on Cryptopia, or, ideally, when they are listed on new exchanges.

To conclude this coverage of General metrics before we tackle Supply Emission, let us take a look at the volume-related figures:

HEAT traded $2,163 of volume over the past 24 hours, equating to 0.38% of its Network Value. Now, on the surface, that doesn’t sound all that bad (not great, no, but not abysmal either). However, this was an anomaly over the past 30 days, with the Average Daily Volume coming in at… wait for it… $40. In essence, zero. That is 0.01% of its Average Network Value – for the same period – of $709,831. Now, what this confirms is that there is simply no interest in HEAT on its own exchange at present. Unfortunately, I can’t determine OTC demand, and thus this is all I have to go on. There is a clear necessity here for more exchange listings in order to gain an audience of speculators that will at least drum up interest in trading HEAT, so that any fundamental developments can become more visible.

So, with that said, let’s now take a look at Supply Emission:

HEAT’s average block time is 25 seconds and its current block rewards are 3 HEAT to each of its consensus mechanisms (Proof-of-Stake and Proof-of-Presence). However, these rewards decrease to 2 each in the next ~200k blocks. I calculated that the supply emission for the next 365 days will be around 5.4mn HEAT, or 18.91 BTC at current prices. This gives HEAT a moderate annual inflation rate of 13.6%.

Given HEAT’s sustained lack of volume, it would be rather useless to determine the relationship between volume and its supply emission. Inflation is clearly not much of an issue at 13.6%, and there should be no real headwinds to price growth if the real issues of volume and liquidity are resolved. This is critical.

And that concludes this section on Metric Analysis. Onto the HEAT 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.

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

Twitter Followers: 3042

Tweets: 589

Average Twitter Engagement: 0.22%

Facebook Likes: 5934

Facebook Posts (30-Day): 7

Average Facebook Engagement: 0.02%

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

Twitter:

Given that HEAT has been around for almost 3 years, its Twitter audience is not particularly large and its engagement is not particularly strong. That said, in RivalIQ’s report, we find that the average Twitter engagement rate across all industries is 0.046%, which means that HEAT’s engagement rate is currently 4.78x greater. Further, the average engagement rate for the Media industry (the most relevant in the report) is 0.013%, thus HEAT’s is 16.9x greater.

However, its engagement rate relative to other cryptocurrencies is very much average, placing it in the middle of the pack of coins previously reported on.

Facebook:

Facebook, unlike for many cryptocurrencies, is HEAT’s largest audience, with close to 6,000 likes. The team do not post all too regularly, however, with 7 posts in the past month. Engagement is very poor here, with 0.02% being the average engagement rate for the past 30 days.

HEAT’s average Facebook engagement rate is also lower than the average across all industries of 0.16%, and lower than the Media industry average of 0.08%.

This needs work, as there is no point in having a solid working product (the platform, which we shall cover later) when no one is paying any attention.

Discord:

HEAT’s Discord group is rather small relative to its other platforms, with only 359 members. There are plenty of channels for relevant topics but I could not find a channel with links to useful resources for new users.

As usual, General is the most active channel, with 20 members active over the past week (around 5.6% engagement). However, there are only a handful of daily messages posted, and the channel is lacking consistency in any real, meaningful discussion on the development of the project. The team are active, as are a small group of dedicated community members, but there is no palpable wider interest. What I did like was that the team, irrespective of the lack of heavy engagement, are consistently providing detailed updates on their progress, including their Business Strategy roadmap for 2019, which I cover later in the report. I also found out that new altcoins will be added to the DEX in Q2 to help improve volume; that a PR campaign is underway to help visibility of the platform release; and that HEAT will be sponsoring the Evolvement podcast for awareness. Heatwallet 2.9.0 (the multifunctional HEAT platform) was released a few days ago, featuring its integrated DEX and multicurrency wallet, as well as markets added for NXT assets, plus a blog post detailing the ins and outs of the release.

Overall, the team is clearly making an effort to inform the community of their progress, and that is highly commendable. However, engagement and interest is very limited and the group is quite subdued in its discussion.

BitcoinTalk:

The (new) HEAT BitcoinTalk thread was created on June 10th, 2017, and has since generated 1023 posts spanning 52 pages in 662 days. This equates to 1.54 post per day, on average. However, in the past 90 days, the thread has had 44 posts, giving an average of 0.48 posts per day; a serious decline in engagement.

The announcement itself is mainly just a series of links to key resources. There is little to no branding or design, and the announcement still features a roadmap from 2017. It does not even introduce the project nor provide any basic info on coin specification or the block reward schedule.

Regarding the content of the thread, there is some discussion concerning the Cryptopia hack, as this is the only exchange listing other than the HEAT DEX, which seems to be a sore point for the community. There seems to be a fair amount of bickering in the thread, with the new platform release being the only real useful post in the whole thread. Not overly impressed.

Community growth needs to be given serious attention, especially given the recent platform release, which has a number of positives that would be useful to users. My primary problem, however, is the severe lack of information; as someone who is spending an entire day on this research process, I struggled with finding certain information – what about new users and visitors who merely browse?


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 6 core team members listed on the website and 7 contributors to the Github.

Of these, there is a CEO, CFO, CTO, Senior Developer, Head of Marketing and Head of Content & PR.

There is clear balance here, as well as experience, yet the research done thus far points to a heavy focus on development and a lack of attention or commitment towards marketing (something that is only recently changing, as per the website evaluation in the next section and the current PR campaign).

Website:

https://heatledger.com/

The HEAT website is perhaps the first sign of a changing tide regarding the project’s lack of commitment to marketing, which, in turn, implies a lack of commitment to user growth. I was very happy to find that the team have recently done an overhaul of the old website, with clear progress made in UI/UX and the overall visual appeal of the design.

The Web Wallet login is clear and accessible, and branding is much stronger than elsewhere within the HEAT ecosystem. The platform’s use-cases are front-page to ensure new visitors are made aware – overall, it is just much better tailored to the end-user than anything covered so far in the report. The multi-currency wallet is emphasised, as is the ability trade anonymously and securely on the integrated decentralised exchange. Further, I discovered that HEAT are branching out into ETOs, with asset issuance and market creation available on their platform; something unmentioned elsewhere. The HEAT platform is available on all operating systems and these are clearly linked, as are HEAT’s social channels.

I can definitely see the direction that the projects wants to move towards just from the differences between this new website and all of the older material in the ecosystem. Further, HEAT is providing free ETO evaluations for businesses, with the HEAT platform committed to providing support for successful issuances. The platform itself will allow businesses to create their tokens and a market for them, as well as allow users to store the tokens.

Far more impressed with this than anything I have seen thus far.

Roadmap:

I was provided with this Business Strategy roadmap by the HEAT team, which gives an overview of what is to come for 2019. It can also be found on their website, though the size is not quite large enough to read for some reason; at least not on my PC.

In truth, it does not give away much detail on what’s in store for the project, but it does show that they are indeed thinking ahead and that they plan to develop a number of products and services related to HEAT. I would like to see more detail, however.

Whitepaper:

https://heatledger.com/HEATWhitepaper.pdf

The whitepaper is 32 pages in length, and is dated August 2016, thus likely out-dated. It is very much a technical whitepaper, not necessarily meant for the layman, with much of the prose jargon-heavy and highly technical. They do mention that the document will be “amended and expanded” over time as the project develops, but this doesn’t seem to have been the case.

There is much here on the technology being developed and its applications, in particular the “complete removal of the embedded database” in HEAT, which means that, unlike most cryptocurrencies, HEAT does not have a single, ever-increasing blockchain file, but rather uses “serialized blockchain files”. This is where Proof-of-Presence comes in, which rewards HEAT users that store copies of the blockchain.

There is, however, also important information on block reward schedules, consensus mechanisms, the decentralised exchange and other useful material for those perhaps considering investment, but overall I feel that the paper is very much aimed at those with a degree of technical proficiency, rather than being utilised as a tool to onboard more potential users of the platform (who are often laymen). In fact, the entire project feels very much like this, as was the case when I wrote reports on Arionum and Bismuth; HEAT feels similar in its priorities and thus is clearly experiencing similar issues.

Wallets:

The HEAT platform with integrated multi-currency wallet is available online and on all operating systems.

General:

In general, the key issues for HEAT are self-evident: community engagement and liquidity. Given sufficient commitment to resolving these, I believe there is promise here, but these are no small tasks.

The positives are largely tied to the recent platform release, which, though it needs some polishing up with regards to design, is highly functional and would be a very useful tool if and when it begins to receive some volume.

It is clear that the development-heavy approach has left holes in key areas for HEAT that must be remedied now that the platform has been released. That said, I must emphasise how impressive I find it that a project that has experienced a 99.5% decline in the value of its coin has continued to work tirelessly at developing a working product.

That concludes the Fundamental analysis, onto the Technical:


Technical

Above, I have provided the Weekly and Daily charts for HEAT. Before I begin any analysis, I must first mention that the lack of liquidity means that I would not be able to take a position, in any case; there is simply not enough buy-or-sell-side liquidity. As such, this analysis is largely for the sake of study and to be returned to when HEAT becomes more liquid (although price, I imagine, will likely be higher by that time).

It is clear from the Weekly chart that we have seen progressively lower peaks on the bull cycles, culminating in an all-time low being formed around 150 satoshis. Levels of prior support became resistance on the way down, such as at ~3600 and ~1650 satoshis, though those levels are a long way away from where price is currently trading.

Looking now at the Daily chart, we can see that the downtrend from 2018 has ended, and price is largely range-bound between 350-600 satoshis. This would usually imply potential accumulation, but the lack of volume makes it unlikely, unless there is volume being traded OTC. (A rich-list would have been useful here). The last period of significant volume was in November 2018, when price rallied above 1100 satoshis; since then, volume has been exceedingly low.

I would like to see new exchanges added for HEAT, or a serious increase in the volume of their own decentralised exchange, before taking any position. As I have likely made clear, there is some promise here and price is certainly attractive, but it is currently too illiquid and at the mercy of the growth of its own exchange.


Conclusion

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

My final grading for HEAT is 6 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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