Electroneum: An Overview of the Cryptocurrency Developed for Mobile
Electroneum was the first cryptocurrency that was developed exclusively for use on mobile phones. This is indeed a massive untapped market as there are over 2 billion mobile phones in the world today.
Many may also know Electroneum because of their highly successful ICO that took place last year between September and October. They were able to reach their hard cap of $40m with over 120,000 contributers to the project. These Electroneum tokens have now hit the open market and are open for trading.
Yet, what is Electroneum and should you consider an investment?
The concept is quite simple really, which is why many are quite bullish on the prospects of the coin. They want to make it as simple as possible for someone who has never used cryptocurrencies to not only buy, sell and send the coins on their mobile device but also to use their phones to mine them.
Let's dig into the project a bit more.
A Simple Mobile Friendly Coin
Cryptocurrencies can still be an intimidating investment for those who have never used them before. People have to get used to concepts that are rarely ever used in their day to day life. Hence, there still remains a certain barrier to adoption.
The technical requirements and skills required to mine cryptocurrency are that much more advanced. Not only do the users have to know to set up and maintain a mining rig, but they also have to spend quite a bit for the best hardware.
Yet, with Electroneum a mere smart phone is all that the user requires.
The concept behind Electroneum is to merely download their mobile app which will give you instant access to the Electroneum network. Using the client application on the phone, you can then mine the cryptocurrency with the phone's CPU.
This simplicity comes from the large initial supply of coins coupled with the two decimal use.
With cryptocurrencies, the supply of the coins is determined from the beginning and is either pre-mined or mined over time. For example, the total supply of Bitcoin that will exist is 21m coins.
This means that as we approach the total supply cap, the price of Bitcoin is likely to appreciate substantially as demand outstrips supply. Moreover, Bitcoin will continue to be denominated into smaller fractions in order to facilitate commerce and payments.
Similarly, in order to limit the supply of the coins, the technical protocol will adjust the mining difficulty in order to make sure that no more miners can produce the coins. This adjustment takes place in an ongoing basis and hence requires much more advanced processing power to mine the coins.
With Electroneum there will be a large supply cap of over 21 billion coins. This means that there will be a large amount of coins to be mined before they ever approach the supply limit.
They have also used a specific protocol which cannot be easily exploited by ASIC (Application Specific Integrated Circuits) mining chips. These are essentially mining equipment that is developed specifically for mining and they have cornered the whole Bitcoin market.
Use of CryptoNote Protocol
Something that Electroneum have done that makes them rather unique is that they have built their own blockchain. Most of the other ICOs have built their applications with Ethereum smart contracts.
When it comes to the protocol that they have decided to use on their blockchain, the developers have opted for the established cryptonote protocol. This is the same protocol that is in use by popular privacy coins such as Monero XMR and Bytecoin.
Apart from making the Electroneum mining resistant from any ASICs, the CrypoNote protocol is also extremely secure. Using some of the most advanced technology in public key cryptography, the CryptoNote protocol is able to hide transactions from public view. There are also a number of other more technical advantages that the CryptoNote protocol has such as adaptive block limits and smooth emission.
Centralised Mobile Mining
The idea of users being able to mine their own Electroneum using a mobile phone is not entirely new. There have been other cryptocurrencies that have attempted mobile mining with the standard algorithms that apply to those coins.
However, these tended to have some side effects on the phone. The performance of the phone tends to dip and it quickly drains the battery. In some cases, the phone would also overheat as a result of the intensive operations that were occupying the CPU.
Hence, when we heard about the Electroneum mobile mining, we were interested to find out how they managed to adjust the protocols in order to avoid these issues.
Taking a look at the technical white paper one can see exactly how they approach their mobile mining. They use a centralized system to reward the miners instead of a traditional blockchain technology based decentralised system. They took the view that
the positive benefits to be gained from a centralized app and mobile mining algorithm outweigh any negative aspects.
The fact that the mining process is centralised may alarm many purists in the cryptocurrency space as they view decentralised miners or nodes as the only way to keep a system completely honest. In this case, the mining rewards are not controlled by protocol but by Electroneum.
It is important to note, however, that Electroneum claims that this is the only part of the system that is centralised. There are also other benefits from the centralised system and that is the speed of the transactions that can be processed.
Moreover, there are a number of other highly centralised coins such as Ripple XRP that have great use cases for the banking industry. Investors have put aside those concerns and helped drive Ripple to record highs.
Hence, it is up to the user to weigh up the pros / cons of having a centralised mining system over a fully decentralised one. The coin price is likely to react to the expansion of user adoption.
Strong ICO Results
Electroneum was able to raise the maximum target ($44m) of their ICO projections. There has also been a rally in Bitcoin and Ethereum since then increasing this fund. This means that they will have a lot of firepower in terms of development budget for the upcoming months / years.
The Team behind the project is also quite strong with a range of different backgrounds. For example, the CEO is a man called Richard Ells who has a successful history building a number of digital businesses.
There are also a number of use cases that Electroneum can be applied to as a utility token. Apart from being used as a simple method of exchange for individuals and businesses, it could also be used to a larger extent in mobile gaming.
For example, if someone wanted to gamble on their mobile phone, they could do so through mining the Electroneum tokens and using them to stake wagers. They could then accumulate the tokens and easily exchange them for Fiat currency on a cryptocurrency exchange.
Prospects for ETN Token
Currently, the Electroneum token (ETN) is only available on one exchange. That is Cryptopia which is an exchange that is based in New Zealand. Despite the limited trading avenues, ETN has rallied by over 100% in the past 24 hours.
The team is trying to get the coin listed on a number of other exchanges such as Bitfinex, Bittrex and HitBTC to name a few. There are many who think that the larger trading volume these sites will provide are likely to drive the coin up considerably.
There has currently been no update from these exchanges for the timeline for a release unfortunately. Hence, you will have to create an account at Cryptopia if you would like to purchase ETN.
Should you invest?
We do not provide investment advice at the Coin Bureau but have hopefully given you the information that you may require in order to create an informed opinion on any investment.
Disclaimer: These are writer opinions and should not be considered investment advice.
Disclaimer: These are the writer’s opinions and should not be considered investment advice. Readers should do their own research.