Bitcoin Global News (BGN)
June 04, 2018 -- ADVFN Crypto NewsWire -- With the EOS main net launching at the time that this is being written, it seemed important to examine what’s behind EOS’s rapidly rising value. The urgency of such an analysis becomes even more apparent when the fact is taken into account that reports have consistently come out questioning EOS’s value, over the course of its long ICO.
If you take a look at EOS on Coinmarketcap, as of now on Sunday at 10 a.m. EST, it is clear that confidence in it is rising due to the imminent launch of its first product. Following this, it can also be argued that this rise in confidence gives all the more reason for reasonable skepticism related to the reasons behind it.
It should be made clear that this is not a criticism of EOS alone, but more of a call for reasonable doubt with regards to any project that undergoes a steep climb in its value, with no indication of any utility.
Even so, with specific regard to EOS, its current gains have been explained as speculation due to its main net launch put together with the freezing of EOS tokens during the same launch. As a consequence, now that the tokens have been frozen, this appears to mean that they can’t be used anywhere else other than on the EOS ecosystem.
When this is considered, then it can be said that some evidence exists for the argument that EOS’s present value is largely artificial. There’s no full product yet. The main net just launched and with any scarce asset, a natural jump in value occurs, at least in the short-term.
If one chooses to believe this, however, then it’s hard not to look at hundreds of other projects in the Crypto industry in the same way. Even after a main net is launched, in fact, a Blockchain project’s value still largely depends on network effects because most of the projects in the space are platforms.
If you’re not quite clear on this particular conception of a platform, think Ebay, except decentralized and fitted with largely indisputable proof of ownership. Except for these differences, in the Blockchain world, a platform is still a place where different groups of users exchange services to keep the entire network running as well as consistently generating a profit.
EOS is trying to be this. In fact, it could be said that they’re trying to be a bigger and better version of Ethereum, with more scaling ability. To scale successfully, their algorithms will have to hold up in the face of security-related as well as growth-related pressure and above all, they will have to attract excellent partners.
Some industry insiders have pointed out that even with the accusations of a jump in value due to speculation and scarcity, it could also be said that this could be due to its recently announced partnership with a financial technology firm called FinLab AG, to the tune of $100 million, which will be used for development on the EOS chain.
Whatever the case, in the end, EOS is currently only a foundation that could one day be something great. Whether or not it will become anything that will have a long lasting impact on the global market will depend on how and when applications are built on top of it by its partners. If these applications attract enough users for the network to reach whatever critical mass that it desires, then we will be able to consider EOS as a project with true, real world utility.
By: BGN Editorial Staff