Welcome to this week’s edition of RHIZOME Wire!
Comparing ICON and Ethereum
This week, I came across a post on the ICON Reddit page that highlighting some more good news about the progress of ICON. Here’s the highlight:
As has happened a lot over the past few weeks — as the ICON price has stagnated and started to fall — was the emergence of the question as to why this sort of news wasn’t causing the price to go up:
So why isn't the price doing anything? ICON is becoming a lot like XRP.
Lots of news, but no price action.
And of course, this led to several theories as to why, which essentially comprise the entire discussion in that Reddit thread.
I’ve observed a few times as to why, under current market conditions, price doesn’t react to news like it did during the bull market of 2017.
I’d like to add to this by looking at Ethereum in 2016 — when it was essentially stagnant in price for most of the year — and bring up some similarities with ICON of today (and many other projects that have been churning out good news without the corresponding price action).
First, here is the price of Ethereum for the time period of basically March 2016 - March 2017 (right before it started to rise to the legendary prices we all remember today):
As you can see, it basically hovers around the $10 range — it dips below for time frames, and rises above that level (including a brief spike to $20 before the DAO incident), but for the most part pretty much ranges around that price.
This is pretty similar to what the ICX price has seen this year — while we’ve seen it briefly rise to prices in the 70s and crash into the 20s, it’s basically hovered in the same range in a boring manner for months.
Now let’s look at another chart, which is over this exact same period of time: the total number of wallets.
Here is Ethereum:
Over that same period — while the price was mostly stagnant — the number of unique addresses did a 5x.
As you can see, the number of ICON unique addresses has tripled, with a seemingly minimal impact on price — just as what happened with Ethereum.
Finally, there is a third similarity — and most likely the most important when it comes to price. Below is the daily transactions for Ethereum during that time period:
And here is ICX over the past year:
With the exception of the ICX transaction spike in mid-February, both charts look pretty similar — a range with no clear upward trend over the course of the year.
Of course, we all know what happened to the Ethereum price over this time period:
But what about transactions? Here’s the daily transaction count, beginning from the date where the transaction charts above cutoff:
Now, some might point out that the price is what led to the transaction increase. That may be partly true.
But remember, this period also coincides when the first major use case for Ethereum: ICO fundraising. The dozens (if not hundreds) of ICOs that were part of the bull market of 2017 were essentially all utilizing Ethereum, thus increasing demand, and creating the first wave of “adoption.”
There were even numerous instances of the Ethereum network being clogged by ICO transactions.
And I’m not sure I even need to mention the impact that Cryptokitties had on the demand (and traffic) for Ethereum.
So what’s your point?
Good news isn’t inherently valuable. Good news is “valuable” because it’s an indicator that the usage and demand for a token will likely increase over the long-term. And if demand increases, then that’s going to have a positive impact on price.
It’s really that simple. Yet, often, people treat good news as a substitute for that demand. Can good news help price? Of course — especially in the early days of a project when positive news can give it a strong boost of credibility. That’s effectively what we got in the early days of ICON. A government partnership indicated the project probably wasn’t a complete scam. Price goes up. Combined with extremely bullish overall market conditions, the price may go up a lot.
But, ultimately, what’s going to impact the price is the actual demand and usage of a token, and transactions are the best indicator of that.
As more and more businesses announce they will be utilizing ICON, each will gradually bring it’s own boost of transactions (while VisitMe has 100,000 users, it doesn’t mean each is using the app every single day, especially if only 100 businesses thus far utilize it). Individually, they probably won’t make a huge impact. As a whole (remember: my-ID has nearly 100 partners), they could create the type of transaction chart that looks a lot like the Ethereum transaction growth above.
It’s clear that there was a “brewing storm” with Ethereum, as work on the network continued throughout 2016 and more and more people had wallets. It’s certainly possible we may be in that same phase with ICON and ICX.
News from ICON World
Paycoin establishes an MOU with ICONLOOP
ICONbet’s new game DAOlevels is now fully customizable
The ICONbet team and RHIZOME team member Andrew Burns has been working very hard. ICONbet also just released a new roadmap with several new games planned.
ZenSports has raised $4M in funding
In case you’re unaware of what ZenSports is, its a P2P sports betting marketplace allowing users to make sports bets with anyone around the world. It uses the ICON blockchain - as well.
The Stin, Austrian-based distiller will use ICON for supply chain
ICONLOOP CTO Hyukgon Ryu presented on MyID at the Blockchain Business Forum
Shinhan Bank gave a speech for its blockchain strategy and discussed Zzeung
RHIZOME team member Brian Li is working on citizen node deployment
brianli.com @bwhliJust ran a test deployment. Citizen node live in ~4 minutes. #ICONProject $ICX https://t.co/YOtYqJC7n7 https://t.co/HJywOUkOXv
Blockchain Industry News
Russian federal authority blacklists Binance's website - The Block
Roskomnadzor, the Russian federal authority responsible for the supervision of communications, information technology, and mass media in the country, has blacklisted Binance's website.
Uniswap Users Have Claimed $560M-Worth of UNI Tokens in a Week - CoinDesk
Data from Dune Analytics on Thursday shows that eligible participants in the DeFi project have claimed approximately 78% of the existing UNI supply – just under 117 million tokens.
Gemini Launches in UK as Part of Global Expansion - Decrypt
Crypto exchange Gemini has expanded into the United Kingdom, after successfully gaining approval from the Financial Conduct Authority (FCA) as a regulated entity. The FCA has authorised the exchange with an Electronic Money Institution (EMI) license.