mrmasa: Invest in or Not? – Ethereum, ETH –
Hello. This is mrmasa.
Today we are going to talk about the Ethrereum token ETH.
here is also my YouTube Video for “Invest in or Not? – Ethereum, ETH – “. Please take look at it.
Let’s get started right away.
First of all, BaaS is the category of Ethrereum in my portfolio strategy. It is one of the most competitive markets in the blockchain industry.
My analysis viewpoints has 6 viewpoints as usual: pain point analysis, product analysis, team analysis, team execution capability, token economy analysis, and hype cycle analysis. Let’s take a closer look. The first is pain point analysis.
Pain Point Analysis
For blockchain app developers, getting P2P computer resources in the early stages of the business is a daunting task.
I will talk in detail.
First of all, the current Internet infrastructure is dominated by giant IT companies such as GAFA. These companies are not operated by P2P computer networks, so they are the exact opposite of the idea of blockchain. So, what should programmers who want to develop applications using blockchain have to do?
As shown in this token economy matrix which I made, we have to consider various things such as reward economy, securities economy, network effect, and on top of that, we will also build our own DAO- type P2P computing network. It’s too difficult, isn’t it?
This behind-the-scenes work, or BaaS, provides the resources for a DAO- type P2P computing network. Actually, this is very helpful as the same thing is happening in the development of the Internet industry. It is a phenomenon called “Computing Big Bang” that was put from 2006 to 2007. Since then, a lot of apps have been on the market. Thanks to this, the Internet industry has grown rapidly. It was a very impactful event.
The reason for this was Amazon’s AWS , which is a centralized cloud, and Apple’s iPhone. The former is related to BaaS. Before AWS became popular, app developers had to rent a data center. We had to pay at least $3,000 – $5,000 every month. It cost a lot of money. So programmers couldn’t quite easily make and release an app.
However, AWS has solved this problem. What a second we charged. In this case, if the number of users is small, you only have to pay $30 – $50 per month. Thanks to this, many programmers started to develop apps.
BaaS is a blockchain version of this AWS. In the blockchain world, servers are not centrally managed by Amazon like AWS, but are the same as Bitcoin miners, and they all join the network at their own will. BaaS created a world where anyone can easily provide blockchain-based apps by collecting a large amount of these miners instead of becoming app developers.
In short, this pain point solution is very important for the development of the blockchain industry.
Now, from here, we will proceed with product analysis based on this point.
First, let’s deepen our understanding of the overall system of Ethereum.
Please see this figure.
Under BaaS, there are miners. They provide computer and network resources.
And above that, the blockchain app is running. These are some of the major blockchain apps that use Ethereum.
In order to operate the application, application providers who want to use the minor’s computer network resources, first, ETH to buy, the ETH has been a constant exchange rate transactions with GAS will buy. This GAS is a usage fee and a minor reward on this blockchain network.
GAS pays more for miners, so miners preferentially handle work related to the application. So here is the principle of competition. There is a risk that minor resources will be concentrated on some apps because the more blockchain apps that can pay more, the more minors will be provided with computer and network resources. This is very different from AWS . AWS has a fixed price model, thus there is no risk of computing resource concentration.
For reference, this is one of the objects that will be discussed as a future issue of BaaS, and it is called network congestion problem. Solutions are also being actively discussed.
And this is the ETH-GAS station site. From here, app developers purchase GAS. ETH is purchased at exchanges and other places.
The ranking is also displayed, and you can see which app is a heavy user. USDT to provide a Tether and, DEX projects 0x It is a heavy user.
And this slide is important for understanding Ethereum.
This is a comparison between a centralized cloud and a non-centralized cloud called BaaS. Cloud computing systems generally have three functions. Transaction processing system, storage system, and analysis system.
And BaaS is the transaction processing system in this figure. This is because the blockchain itself is a transaction processing system technology. It does not have storage or analysis functions. For example, one block size in Bitcoin Blockchain is only 1MB. Very small, thus, we cannot directly use this blockchain as a storage system.
Therefore, it is necessary to expand the technology of blockchain to have those functionalities.
This is also a hint to compare Ethereum with other BaaS.
Now, let’s do the usual value curve propositioning analysis. Compare with EOS and TRON which are three major BaaSs.
First, in terms of functionality, Ethereum is actually inferior to EOS. I don’t have a storage system and analytics system at this time. And, EOS from the time of release PoS are operating in, TRON is, COSMOS close to DPoS runs on. On the other hand, Ethereum is, currently, PoW from PoS we are promoting the migration.
BaaS Given the nature of the software say that, PoW, because it is not suitable only to the transaction processing system, PoS which is overwhelmingly desirable. In addition, Etherium and EOS do not have their own apps, but TRON is differentiating itself through a vertical product strategy that has Dlive , BitTorrent, etc.
What is the overwhelming strength of Ethereum? Without a doubt, I rate it as 1st Mover Advantage. This is a unique feature of the blockchain industry. 1st Mover Advantage’s law does not work in the Internet and personal computer industries, but it is strong in the blockchain industry. For more info, watch my 1st Mover Advantage video.
The result is here. This is a comparison of the top 10 total market caps of BaaS . Data for 2019.
Orange is the market capitalization of each BaaS unit, and blue is the total market capitalization of the blockchain apps running on it. Ethereum is overwhelming. That’s because Ethereum has won the industry’s world first BaaS , the 1st Mover Advantage. Ethereum also created the killer solution called ICO. In other words, the other player is basically a copy of it. As the altcoin market grows, it is expected that this blue area of Etherium will grow further, which will further strengthen Etherium’s 1st Mover Advantage and establish a solid position.
Next is team analysis. Ethereum is, DAO also has advanced, because the development community is also quite developed, not necessarily that the team analysis is no longer an important project, please be careful. The four people I see as key members.
First, Vitalik, the creator and founder of Ethereum. I met him in Japan in 2014 . He is currently working as a researcher. In consideration of DAO of Ethereum, he tries not to take a dominant position like Linux Linus Torvalds. That’s good.
Next is Aya Miyaguchi. She is the Executive Director of the Ethereum Foundation, working on the Ethereum ecosystem development. Actually, we both closely worked together in Japan when she was at Kraken.
Immediately after the Mt.Gox incident, we worked together to normalize and launch the virtual currency and blockchain market in Japan, and now she is also a good friend of mine in the industry. She is a capable woman with a very good personality and integrity.
Also, although not currently actively involved in the development and activities of Ethereum, there are two important contributors.
One is Gavin Wood . Former CTO . He is an excellent computer scientist leading the design and implementation of the overall architecture of Ethereum. He is currently focusing on blockchain interoperability and Web 3.0 activities, and is heading Polkadot, COSMOS’s biggest competitor.
The other is Joseph Lubin, a former COO . He was the person who oversaw the entire operation of Ethereum, and this role is now taken over by Aya Miyaguchi. He is currently launching Consensys , a startup studio to popularize blockchain app development on Ethereum , and is shifting the focus of its activities there.
Execution Power Analysis
Next, I would like to evaluate the execution ability based on this team structure. This is data from dapp.com . Similarly, compare with EOS and TRON .
First, the number of apps , only 1,000 It is overwhelming and exceeded.
The total amount of transactions often varies from day to day, so it is for reference only.
What you are most paying attention to is active users. In the old days, it was inferior to TRON and EOS , but now it is completely becoming No.1 . This means the growth of the blockchain app itself running on Ethereum. I have some promising apps, so I’m looking forward to it.
And the number of transactions is still inferior to TRON and EOS , but it is growing steadily.
Next is an application category analysis.
First, the biggest strength of Ethereum is that the game category is overwhelmingly strong. This is a point that I consider important for BaaS to survive in the medium to long term. why?
This is because it is unlikely that game apps will operate with their own blockchain using COSMOS, etc. Games have a shorter product lifecycle than daily life-use apps such as web browsers and SNS, so it’s hard to think of operating their own blockchains. If so, you will continue to use BaaS . In this respect, Ethereum is superior to other functions for game application developers, including the fact that NFT of in-game tokens was the first in the industry, so from this point as well, it has the most growth potential as a BaaS. It is rated high.
In addition, since the categories such as exchange, finance, and SNS , which are important areas in the blockchain industry in the medium and long term, are overwhelmingly stronger than other BaaS , it can be evaluated as the No. 1 player in BaaS.
Token Economy Analysis
Next is the token economy.
This applies to BaaS. The security economy and DAO are particularly important. Network effect BaaS it is not important in there, but, with respect to Ethereum, I will talk in more detail because it has its own opinion.
Please take a look at this diagram.
As I said, the starting point is to reduce the work road on app developers in aggregating P2P network based computing resources. Then, ICO · IEO will increase on Ethereum, but, one of the problems is, ETH startup that funding ETH By selling, ETH since the selling pressure of a stronger, no less desirable as securities economy.
And the ETH that moves into PoS is almost fixed in the inflation type. I haven’t come up with a good idea for the PoS with limited token supply model. Then, due to the inflation and ICO selling pressure, it is difficult to raise the price. With that in mind, as blockchain apps grow, so will the number of active users, so naturally demand for GAS will increase. Then, the buying pressure of ETH will increase.
From here, in my own perspective, the key is MakerDAO ‘s DAI . why?
At the moment, ICO According to the ETH of selling pressure is in the challenge, ICO project that is, ETH because alter the legal currency. It’s because you pay salaries for your employees. In other words, ETH will be converted into the outside world that has nothing to do with ETH , and pure selling pressure will be created. However, when stable coins that use Etherium, such as MakerDAO ‘s DAI , are also used at general member stores, that is, supermarkets, there is no need to exchange for fiat currency any more. And since DAI transaction processing requires GAS , this leads to increased ETH buying pressure. In other words, the expansion of DAI ‘s member merchants network has the network effect of creating the power of ETH to raise prices on their security economy.
And finally, governance, or DAO. It’s a BaaS, so it’s very important. Right now, it is highly praised and under development, so the movement itself is low in the influence of the early members, and the development community and others are moving autonomously, so I think it is very good.
Hype Cycle Analysis
Finally, a hype cycle analysis.
We’ll talk about the latest Gartner blockchain industry hype cycle map.
As for BaaS, first of all, it is the area of “Blockchain” that is entering this period of full-scale growth. However, where appropriate in the early days, ” DAO”, and the previous MakerDAO of DAI and NFT in combination with “SmartAsset” Because we are also doing that the corresponding to, this area is I think a very high potential.
Total Investment Score for ETH
And the final comprehensive evaluation is as follows.
First, the pain point is 5.0 . BaaS is essential for the development of the blockchain industry.
Next I made the product 4.5 . The background is that the shift to PoS and the expansion of other functions like EOS have not yet caught up. However, since I have the 1st Mover Advantage, I think that I will eventually overcome it.
Next is Team 5.0, which is perfect.
In that respect, the ability to execute is 5.0 . The result is undisputed.
The token economy is also 5.0. I’m evaluating the network effect of the combination of MakerDAO and DAI, which I talked about earlier, and the fact that the approach to DAO is one of the most advanced projects compared to other BaaS.
Hype cycle is 4.5, considering the BaaS market, which is already in the stage of full-scale growth, but, we can see higher potential in DAO and Smart Assets in long term.
The total score is 29. I think it’s well worth to iinvest in. That’s it. There are many other altcoin analysis and blockchain related articles and videos available, so please take a look.
Thank you for reading!
Note: This content is just made for reference. Your investment decision is your own responsibility.
One more thing: again, here is also my YouTube Video for “Invest in or Not? – Ethereum, ETH – “. Please take look at it and subscribe my channel.