Market Mad House

In individuals, insanity is rare; but in groups, parties, nations and epochs, it is the rule. Friedrich Nietzsche

Cryptocurrency

Taking a Swim with the INCONOMI (ICN) Digital Assets

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ICONOMI (ICN) is a blockchain platform designed to sell a class of assets called Digital Asset Arrays (DAA). To clarify, the DAA appears to be like an exchange-traded fund (ETF) for crypto assets.

Like an ETF a DAA is a basket of investments you can buy and sell. The difference between a DAA and an ETF is that the DAA trades in Iconomi’s blockchain markets.

Moreover, ICONOMI (ICN) could let any fund manager build her own DAAs. Thus any fund manager can put together any package of funds he or she wants. Additionally, ICONOMI will use the ICN cryptocurrency for DAA transactions.

What is ICONOMI (ICN) anyway?

INCONOMI itself is a blockchain platform managed by a European Union (EU) licensed financial asset manager. Thus, the creators envision INCOMI as a professional corporate structure with transparent governance.

Interestingly, ICN token holders can exchange their tokens for tokenized shares in a joint-stock company, ICONOMI CEO Tim M. Zagar writes at Medium. Hence, ICONOMI is making the leap from initial cryptocurrency offering (ICO) to initial public offering (IPO).

The ICONOMI team calls the shares eICNs. In detail, the eICN is a new crypto asset that will function more like a stock or an ETF than a cryptocurrency.

Surprisingly, ICONOMI is planning to replace its cryptocurrency with Ethereum (ETH). Zagar writes “ETH will take the place of the ICNtoken’s utility on the ICONOMI platform (e.g. fees paid by DAA managers).”

Therefore,you will no longer need to use ICN on the ICONOMI platform next year. Instead,you could Ether (ETH) or any ERC (ethereum-based token) to trade on the platform.

Is ICONOMI (ICN) a good Cryptocurrency?

Under these circumstances, ICONOMI (ICN) sounds like a fascinating product but a lousy investment.

ICONOMI (ICN) is a lousy investment because the management is changing everything around. In fact, ICONOMI seems more like an experiment in progress than a cryptocurrency.

Interestingly, the DAAs could be a far better investment than ICN when they become available. For example, the DAA could contain stock, other cryptocurrencies, or ETFs.

On the other hand, there is no sign that the DAA is legal. In addition, the nature of the DAA is a little confusing. Although I think the DDAs are probably Ethereum smart contracts.

ICONOMI (ICN) is a blockchain platform for Managed Funds

An Ethereum smart contract is a document written in Ethereum that also functions as a Decentralized Application (DApp). Thus, a smart contract can execute functions like paying investments.

If you want to see what the DAAs look like ICONOMI describes many of them at its website. Each DAA has a named manager just like an ETF or mutual fund. Note: ICONOMI euphemistically labels the DAAs “portfolios” at its website.

Therefore, ICONOMI is a blockchain investment platform for those who like managed funds.However, I am skeptical of fund managers and managed funds. Generally, I dislike paying money for services I can provide myself such as picking investments.

In addition, I have seen too many news articles and reports about managers’ poor performance to believe in them. If I lose money, I want to blame myself not some overpaid manager.

Will ICONOMI (ICN) work?

I have some serious questions about ICONOMI, the biggest of which is legal? I have to wonder if it is legal to sell funds and ETFs through the blockchain.

Beyondt hat, I have to wonder if financial regulators will allow it. My opinion is that ICONOMI (ICN) will have little value without such licensing.

Moreover, ICONOMI’s creators are not addressing the blockhain scalability problem. To explain, existing Ethereum blockchains can only process 15 to 20 transactions per second (TPS).

Why ICONOMI (ICN) May Not Work

Hence,the ICONOMI could crash if 30 people try to add or withdraw funds at once. To make things worse, it could take ICONOMI several hours to process 100 DAA transactions. Obviously that could make ICONOMI impractical for a mass market.

However,ICONOMI could be compatible with potential blockchain scalability solutions.For instance, the Raiden Network’s (RDN) scalabilitysolution is comparable with ERC20 tokens like ICN.

Notably, Raidenis testing a scalable micropayments solution called uRaiden. On the other hand, Raiden’s creators refuse to say to say how transactions per second their creation is processing.

Another potential solution is EOS (EOS).Notably, the Bancor Network (BNT) is testing convertibility from EOS to Ethereum (ETH) through BancorX.Markedly EOS investors like Michael Novogratz are making unfounded claimsEOS can process up to 5,000 transactions per second.

Hence there are some serious technical obstacles to ICONOMI’s plans its team has apparently ignoring. Under these circumstances it will be a smart strategy for investors and speculators to stay away from altcoins like ICONOMI (ICN) until the blockchain scalability problem is solved.

Mr. Market thinks ICONOMI (ICN) has value

On the other hand, Mr. Market thinks ICONOMI (ICN) has worth. CoinMarketCap gave ICN a Market Capitalization of $15.214million and a COIN Price of 15.15¢ on 8 December 2018. In addition, there was a24-Market Volume of $830 on the same date.

There is no Total Supply of ICN which means it will be possible to make an unlimited number of ICN tokens. Therefore, ICN is susceptible to inflation without a Total Supply. There was a Circulating Supply of 98.930 million ICN on December 8, 2018.

Under these conditions, ICN is a good speculative cryptocurrency that received a rank of 161 on CoinMarketCap’s list of cryptocurrencies on 8 December 2018. If you are looking for an interesting speculative cryptocurrency investigate ICONOMI (ICN).