Part 1 and Part 2 of this series focused on the VeChain Blockchain project and its impending apotheosis. Part 3 examined some less well known Chinese Blockchain projects that have strong indications of exploding over the next 18 months. This article will explore why Trinity Network Credit ($TNC) is integral to supporting the NEO project and therefore hugely undervalued. If you want more articles like this, click the follow button above.
If you’ve spent much time researching Chinese cryptocurrency projects you’ll probably have noticed that China loves crypto and Blockchain technology. Although the government has implemented a scorched earth policy of banning ICO’s and cryptocurrency exchanges, this is in reality a means of regulation; incubating strong projects and teams whilst limiting rampant speculation and scamcoins. Venture a little further down the rabbit hole and you will see the truth:
Local governments, especially the coastal areas, have set up blockchain experimental and research institutes. At present, the governments of Shenzhen, Hangzhou, Guangzhou, Gui- yang and Ganzhou are all actively setting up blockchain development zones which are given special support policies. These cities, with a population of more than 5 million each, vigorously promote the blockchain innovation and will create market heights to open up China’s future.
The NEO project, launched in 2014 as Antshares, has seen huge growth. Exploding from $0.15 in September 2016 to around $70 today, going as high as $160 in January 2018, NEO is ranked 8th on CMC with an estimated market cap of a little under $5bn USD.
The NEO Blockchain and ecosystem will provide a means of integrating digital/physical assets, digital identity (more specifically, through THEKEY, which I wrote about here) and smart contracts. However, rather than explain the value proposition of NEO, which has been written about extensively elsewhere, this article will focus on why NEO needs Trinity and the incredibly close ties between the two development teams. If you aren’t up-to-date on NEO and want a well written deep dive on the project, I would recommend skimming this excellent article on the topic before proceeding:
If Ethereum is Goliath, NEO is David. If Ethereum is Brad Pitt, NEO is Brad Pitt’s cousin, Zach Pitt — younger, better dressed, and more talented — but right now relegated to serving cocktails to Brad and his friends while he acts on the side.
The NEO Smart Economy ecosystem will underpin the next stage of economic development. A large proportions of transactions will be recorded on the NEO Blockchain; financial transactions, identity verification, gaming, transfer of digital and physical assets, insurance claims etc. However, NEO can only run a maximum of 10,000 transactions per second on the network, far less than required if their Blockchain is to be used on the intended scale (hence the ‘scaling problem/solution’ you will often hear in reference to Bitcoin, Ethereum and other projects).
Looking at gaming as an example, a small number of users can easily reach this level of transactions, causing the whole network to slow down (as demonstrated by Cryptokitties on Ethereum). This issue is explored in more detail in this article released by the Trinity team on Medium. To boil their value offering down to the simplest terms, Trinity will work as one of the scaling solutions for NEO, just as Raiden is looking to do for Ethereum and the Lightning Network for Bitcoin. TNC will also be able to achieve far lower transaction fees and privacy for NEO assets.
In contrast to Zilliqa, an on-chain scaling solution that uses sharding to achieve higher TPS, Trinity will act as an off-chain scaling solution. Instead of all transactions occurring on the NEO Blockchain, using expensive GAS/NEO and clogging up the network with many transactions, a large volume of these transactions can occur on the TNC Blockchain instead, which can then be pushed to the NEO Blockchain in batches. This essentially means for example that if NEO has a TPS of 10,000 and TNC has a TPS of 10,000, then the effective TPS for the NEO network becomes 100,000,000.
Note: I’m not an expert on the deeply technical side of how this solution will be implemented but this is my understanding of the problem/solution from watching interviews with their CEO. For a more in depth explanation, take a look at their whitepaper.
In addition to the scaling aspect, Trinity recently announced they will play an important role in the process of transferring of non fungible assets through the Non Fungible Token (NFT) standard.
“Fungible” means interchangeable, and in economics is applied to things like gasoline, electrical power, commodities, currencies or chemicals. One electron or grain of rice or American dollar can be substituted for another, regardless of their origins. This leads to difficulties in trying, for instance, to bar exports of oil from country X to country Y, as X can merely sell their oil to country J, who is free to sell it in turn to Y.
Non-fungible goods are often unique (persons, artwork, land, events,) limited in time or location or source or accessibility, and generally, but not always, are not essential to life.
This would allow physical assets/items to been recorded on the TNC Blockchain and traded.
Although TNC isn’t the only scaling solution, they are the only off-chain scaling solution working directly with the NEO dev team. If you’ve watched any of the YouTube interviews with the founder of TNC, David Li, you will quickly come to realize how close their ties are. It is better to think of ZIL and TNC as complementary solutions to the scaling problem rather than competing teams.
On March 24th NC and ZIL hosted a joint event in Berlin, during which they discussed different approaches to scaling. During the event Trinity confirmed that they would not only be looking to scale the NEO network, but also the Ethereum and Zilliqa Blockchains. Up until recently, the Raiden team was the main project looking to achieve a scaling solution to Ethereum (although there is also the Liquidity Network).
That was until Trinity announced they have developed a system for converting the NEP5 Trinity credits to an ERC20 token. Although still unclear, it appears as though Trinity could also be developing a way of scaling Etherium.
There has been a lot of attention given to Zilliqa, which is reflected in its respectable position of 44 on CMC and robust market cap of $350 million. Trinity on the other hand, after opening with a market cap in the $100–120 million range towards the end of January, has been languishing in 213th position on CMC with a tiny market cap of just $36 million.
The team has been very restrained when it comes to marketing and there are relatively few write ups with much detail. I believe this is one of the main reasons the project has remained relatively under the radar with regards to market cap valuation.
It is clear during interviews with David Li (Trinity founder and former AntShares/NEO overseas manager) that he does not believe in hyping the project by making partnership announcements with little substance and making progress claims until there is something rock solid. Several times during various interviews he has stated that when a product/service relating to the project is ready, it will be announced — not insinuated at prior to completion in order to hype TNC. I find this approach admirable and judge it would be beneficial if more teams in the crypto space adopted this mindset.
The main source of signals indicating the strength of the Trinity project going forward (in terms of future valuation) have been interviews with David Li and various YouTube crypto-commentators. This is another reason why I believe the project has not garnered much interest. Most if not all of these interviews are over an hour long and I believe potential investors, which at the moment mainly consists of amateur speculators out to make a quick profit on flipping coins, simply can’t be bothered to spend that much time on research.
I’m not going to lie, watching an entire hour and a half serious interview is not as entertaining as watching Game of Thrones or Suppoman shilling Dorado. Don’t get me wrong, I have started to grow quite fond of the Suppo’s videos but investment research they are not. If you are putting significant sums of money on the line by investing into highly speculative assets such as cryptocurrency, as oppose to index linked tracker, then you need to be prepared to put in the leg work to properly research projects — just as not using a bank means you need to be responsible for guarding your bags.
Having said that, although the interviews with BlockchainBrad and Boxmining were a bit dry, I did enjoy the AMA with THEGOBONE (that’s ‘The Gob One’, not ‘The Go Bone’) — I also have no idea who this guy is and only found the interview because Trinity tweeted it out last week.
A great example of why you should be prepared to persevere and pay attention for the entire interview is what I found about 35 minutes into the above interview — up until that point there wasn’t really any new information. I have transcribed a few minutes of this part of the interview below:
The Gob One: What is the timeline for Trinity scaling other Blockchains? Any progress for this plan within the next 12 months?
David Li: Why do all of you guys have this question? It sounds like I already announced something but I didn’t…OK, there’s an announcement next week at our meetup in Berlin and that will pave the way for what you guys are thinking. OK, so you know before you’re going to be able to scale other blockchains. The first thing is that the economics reach there right? Because currently TNC is an NEP-5 token running on the NEO Blockchain. So the first thing you should do is make it cross chain, yeh? So I already said enough OK. You guys should wait until then.
The Gob One: Holy god, what are you doing here jeez?
David Li: You guys should wait until next week. But here’s the thing.
The Gob One: We’re about to lose 100 viewers as they head to exchanges to buy the tokens.
David Li: Everybody asks me this question. Naturally you can deduct if you know the tech. So, for example, the reason why I refuse to say anything about Zilliqa is because they don’t even have the main net yet and for other things too, like US (?) and other Blockchains. The only viable alternative Blockchain that is running is quite obvious… When we announce it, it is done. Before that I can’t really say anything.
The Gob One: I love that actually. There are so many people who do partnerships for the sake of partnerships. It’s just literally hype type crap, so I actually appreciate the fact that you don’t announce it until it’s ready.
David Li: Exactly, I would have announced this over a year ago if I was one of these other projects… A works with B, and C becomes my client, so everybody says they are each others partners, what’s the point of that?
What I inferred here is that David will be announcing at the Berlin meetup (today) some kind of important partnership with another big Blockchain project. I’m going to go out on a limb here and propose that this partner is Ontology ($ONT) ($350 million market cap) and that TNC will be working with them to enable better scaling on their infrastructure.
Edit: I wrote and published this article just before the meetup in Berlin. As it turns out, the big announcement was that TNC would be looking to scale other Blockchains (Zilliqa and Ethereum to begin with), not just the NEO network. The first step of this is to allow NEP5 $TNCs to be converted to ERC20 $TNCs. More details on this will be announced soon. I would rather write this edit that replace the text above and make it look like I guessed correctly in advance!
Whilst I could continue going into detail about the various nuggets of information and soundbites that infer the future value of this project I judge this article is long enough already. Besides, DYOR on this project if you are considering investing your hard earned fiat (or dumping other bags that you’re holding).
I have compiled the various other interviews I have found with David Li regarding the TNC project. I would recommend that you watch all of these before making any investment decisions.
Trinity Network Credit ($TNC) is mainly available on Kucoin and Bibox. It is currently trading at around $0.11, giving it a market cap of $36 million. Given the value proposition this is an absolute steal. If NEO is successful, which I believe it will be, then TNC will form an integral part of the smart economy network. I would not be surprised if the market cap reached over $5 billion within the next 12 months. Bear in mind this is working on the assumption that the whole cryptocurrency market cap increases to around $2 trillion this year.
This is not investment advice. Do your own research before making any investments. I hold some TNC but am not affiliated in any way with the project.
If you thirst for more in depth speculation about the future of Blockchain technology and cryptocurrencies then follow me on Medium (William Gibson) and Twitter (WilliamGibs0n).
I am always discovering and researching new information about projects I’ve invested in, which I update via Twitter.
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