Table of Contents
What is Electroneum?
- Electroneum White Paper
- Country of origin: United Kingdom
- Ticker: ETN
- ICO Dates: Started 14 September- October 20, 2017 (hard cap sold out early)
- Hard Cap: $40 million
- Funds raised: 42,058.31 ETH, 4872.16 BTC
- Industry: Fintech
- Funds accepted: ETH, BTC
- My Rating: 1.5/5
Electroneum is a recently ended ICO issuing a simple coin and a payment system, aimed at non-technical users. The project aims to solve one major problem of cryptocurrencies- they are still not so accessible and may be technically difficult to use. The Electroneum project wraps it all up in a single Android app, containing both a wallet and a mining function. The blockchain startup aims to open up the world of cryptocurrencies not only to the owners of powerful mining machines but to anyone with a smartphone.
Electroneum Social Media
The Electroneum project built a new encrypted coin, which according to the technical white paper relies on the CryptoNote algorithm. This would allow Electroneum mining to run on smartphones and consumer devices, unlike Bitcoin's algorithm, which is currently solvable only by powerful, custom-built machines with specialized chips. It boasts of being the first British cryptocurrency, although previous UK-based ICOs have issued coins, Stratis being among the more prominent.
The additional feature for Electroneum is the user-friendliness, promising to wrap up the coin in a mobile application.
The Electroneum project was born back in 2015, but the coin and the miner were built a year before the ICO. In 2017, the team decided to wrap up all elements, and it will release an Android an iOS app immediately after the ICO ended.
The Electroneum Team
The team includes technical experts, marketing professionals, and crypto-enthusiasts:
- Richard Ells
- Imogen Dale
- James Atkinson
- Dean Cole
- Adam Atkinson
- Ben Whomsley
- Costin Cristoi
- Robert Hopkins
- Terry Hunter
- Michael Wiltshire
- Natalie Hayon
- Barbara Southwell
The main idea driver behind the team, Richard Ells, came on board with Bitcoin in 2015 and soon after that went on to create his own CryptoNote-based coin. In addition, Mark Robinson (business advisor and marketing expert) and Andy Denton (gaming and fintech expert) are listed as advisors to the project.
About Electroneum Coin
The Electroneum coin is a curious creature- precisely because it can be mined with a GPU. It has a capped supply of 21 billion, 1000 times more units than Bitcoin. The team believes this specific money supply would give the coin a “real money feel”, at least in terms of numbers.
The best thing about the coin is that its technology is similar to that of Monero, the leading anonymous coin. In fact, it is very probable that Electroneum is a clone of Monero, or at least of another CryptoNote coin. This means that unlike Bitcoin, transactions with Electroneum are anonymous and untraceable. The algorithm mixes up the senders and the addresses cannot be tracked.
Investing in Electroneum: The Pros
A working app, a great idea- these bring the ICO at least one step ahead of other projects that have not offered even a proof-of-concept version. The robust financing and the early end of the ICO may be signs of positive interest.
The project states that users would start receiving Electroneum practically for free by phone-based mining, thus making their entrance into the world of cryptocurrencies even without buying from an exchange, with complete anonymity. At least in concept, this is a great idea, and it would resemble the “good old days” of Bitcoin mining when it was more of a hobby activity than a professional endeavor.
And since the Electroneum supply is large, users would start receiving it at once.
The Risk of Electroneum
Electroneum is a CryptoNote coin- and that is somehow worrying. Before there were endless ICOs and token sales, for a while this type of coins was flourishing, constantly generating new coins with a very small life expectancy. Very few survive, and only Monero and Bytecoin are more prominent.
Then, there is the risk of GPU mining. Currently, this is the bane of the internet- sites, servers and personal computers are infected with a mining program that hijacks the processor to produce hashes. This wears down consumer electronics and is annoying, as it slows down the computer. Most of the miners produce Monero, the most prominent CryptoNote coin.
No one knows how smartphone-based mining would work. Any kind of mining work is taxing on the processor. So you are basically letting a program take over, lower battery life significantly and wear out the electronics.
In addition, no one knows if the mining program would work only for you- there are some suggestions that mining may work to send coins to a third party.
But it may be easy to try, at least. The question is- what is the incentive to participate in an ICO when Electroneum can be tested by mining it yourself and acquiring coins almost for free.
Also, Electroneum may have to wait for a long time before acquiring a community around itself, so that it becomes a means of payment. The coin will need to survive for a while before appearing on an exchange. It cannot be traded over the Ethereum network, as many new tokens are immediately traded- it would need approval from an exchange service. It would be impossible to use Electroneum for payment without having at least some basic form of price-discovery mechanism.
Electroneum is also destined for use in the gambling and gaming markets, not becoming a widespread means of payment like Monero. So the community around the coin would be different and use it for a very specific purpose. It may not be valuable as a means of shopping or value exchange, at least initially.
Is Electroneum A Scam?
It's hard to say at this point, but the regular people marketing this coin certainly are involved with scammy stuff. I will not name names because people are very litigious these days, but I heard about Electroneum in a promotional email from a well-known scammer. I stay on his email list to keep up with the latest scams. Every week he sends me a new email, “Check out this new super easy way to make money.” It's basically the same email every week.
Plus, look at the screenshot above. It's video after video of people reviewing the coin trying to convince you to buy, or to send you to a different type of coin they prefer, much like typical “get rich online” scams.
Also, if you haven't heard of binary options trading scams, they are kind of like Forex currency trading scams. They were popular for a while. Some of these binary option scam websites are now promoting ICOs, including Electroneum.
Of course none of this proves Electroneum is a scam. At least when it comes to raising funds, the process worked as promised and it seems the ICO is now capped. But where there's smoke, there's usually fire.
Time will tell where Electroneum goes: in a thread on the Bitcointalk forum, an account called Electroneum suggested the project has broad connections in London and has taken some investors on board, including Duncan Logan, founder of Rocket Space, Inc. and others who would be ready to invest personal funds.
What is worrying is that the Electroneum team may also deal with Herbalife as an IT service provider, a long-standing MLM scheme that has received the ire of many participants and regulators. Electroneum, however, is separate from the project targeted toward Herbalife- there is just a tangential link.
Final Thoughts on Electroneum
Electroneum has a long way to go before establishing itself as a valuable project. Despite the relatively large team of developers, the GitHub is really silent, with very little work done- beyond the creation of a simple CryptoNote anonymous coin and a miner.
The Electroneum miner will be available in 11 days, displaying the news in an in-app message. For now, there have been upward of 50,000 downloads, and once mining begins, it may add to the fame of Electroneum, especially if it appeals to users. Similar phone-mining projects like Gaia Coin have their fan base, and some have tried general mining with phones. Mangocoinz produces coins based on the motion sensor of the phone, but it is a smaller project.
Android altcoin mining is not new, but now a simple app may do it for you, beyond the experimental efforts of users. No one knows how it would turn out- it may be singularly inefficient and annoying, or rather smooth if it does not squeeze too much hashing power from the phone's processor. The app created a wallet based on a five-figure PIN, not a very secure way to create encryption and something of a bad sign in the world of cryptocurrencies.
The ICO page claims the sale had 295,881 registered users- but it is unclear if they all backed the coin sale. The team promised the listing on an exchange is coming soon, due to “pent-up demand”, although there are more than enough coins to be traded.
Electroneum has the advantage of being located in Britain, the fintech capital of Europe. But only time will tell if the project becomes a fintech fixture in London or yet another ICO coin that disappears from the radar. That is why we are giving it a 1.5 out of five, for the original idea of widespread phone-based mining and the potential for popularity. But otherwise, Electroneum raises too many red flags, despite the successful ICO.