Olivier de Jong

@olivierdejong

Overvalued Meets Undervalued [updated]

January 11th 2018

All markets are irrational. A price depends on what a person or institution is willing to spend. This is the case in established markets like gold, oil and currencies. But even more in the crypto market. The underlying value is not an absolute value but a confidence value. Sometimes they are based on nothing. The latter happened with CDO’s in 2007. High returns always coincide with high risk.

Today I will focus on what is a valuation from a technical point of view. Right now there is a lot of hype and a lot of people are taking a shot to win big time in this market. To really win big in the crypto currency market is not for the faint of heart. It requires insight, persistence, dedication and a big pair of balls.

Insight is key. A lot of people investing right now do not have the technical insight and just follow where the money goes. This can burn you badly. Luckily blockchain tech is quite transparent. You can easily visit GitHub and search for the chain your are investing in. Sometimes you are surprised how much or how little is there. It also says something about the tech the teams behind the chains are using. Of course not all their tech is public but the majority should be.

Let’s look at a chain with a very high valuation and which has a lot of FUD (Fear, uncertainty and doubt). Some of this FUD is real, some is based on rumours. I am talking about TRON (TRX). At the time of writing it has a valuation of $7,365,572,758 USD. When you believe in what TRON is trying to achieve it’s all dandy. But let’s take a look at their GitHub repository.

The first thing you will notice is repository called ‘java-tron’. So the stuff they have public is written in Java? Really? I mean, I do not think java is a bad language, but it is definitely not the best choice for writing something special for the blockchain sphere. Unprofessional as I would put it and definitively not worth the hype.

You will also notice that there is not a whole lot there. If they really have a crew of 40 dev’s there should be a whole lot more. I mean, I know devs who singlehanded crank out more code than these people. Of course, more is not always better, but in this case it is almost shameful. Think of that 7 billion valuation again. Maybe it is time to reconsider. They do not have a lot and I highly doubt that it will come very soon.

Now let’s take a look at a chain that has it stuff sorted out. There is a very small team behind it but they always deliver and usually they even over deliver. The chain I am talking about is NEBLIO (NEBL). At the time of writing this chain has a valuation of $423,225,231. This might look like a lot of money but we are talking about public chains. The value of TRON is 17 times the value of NEBLIO. 17 times…

Now let’s take a look at their Github repository. Now that’s more like it. 10 repositories of which the most important ones are written in C++. Now that is serious. But they also use python and ruby. Furthermore Javais used where it should be used, for a android app. So yes there is something there. A lot is production ready and there is also some fun stuff like code for your raspberry pi. And if you consider that they have a small team, this is quite impressive. Great stuff.

And what is even more impressive and important: NEBLIO has their own mainnet… Now that is really impressive. Developed in stealth even before their ICO. That is something most chains do after their ICO. If you compare this with TRON it is 2 worlds. Right now TRON is a regular erc20 coin. Made with a contract one dev can develop over the weekend. Read that again, a regular erc20 coin worth 17 times something that has its own mainnet and working software.

Yes, NEBL does not do a whole lot of marketing yet. But they already said that they would not do that before Q2. Furthermore, if you have a small market cap, whales prey on you and that has happened a few days back and people got burned. But as a chain grows, a chain will manage to overcome these attacks. TRON is marketing but not much more. So now my question is, on who would you put your money? Who do you think has the most potential? I think you can draw your own conclusion. And again, this is not an investment advice. It’s a jungle out there. Markets are truly irrational so be careful.

UPDATE:
The saga continues. Apparently parts of the source of the TRON project on github is copied without giving credits to the original developers. Someone already added a LGPL infringement issue on their issue tracker. You can read more about this here: https://github.com/tronprotocol/java-tron/issues/25

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