Lisk disappoints. But let’s give them a chance.

I’m getting this out early while the news of yesterday’s Lisk event in Berlin is still hot.

Let me start with a not-so-happy conclusion: The event was mainly centered on a new focus toward marketing and branding. But the technology is essentially unchanged.

Indeed, the “big” announcement was strictly a new website and a new logo. Nothing more, nothing else.

This isn’t to say the event was a bad idea, per se. Lisk has a clear focus on making it easy for app developers to transition into the blockchain world. From that point of view, increasing brand awareness is certainly the way for them to achieve their stated goals. The CEO also announced a development fund for helping side-chain developers allocating in the range of 5,000 to 500,000 euros for promising side-chain projects

All of us who have been in this space for some time know that blockchain isn’t exactly a friendly new world to get into. Developers, end-users and traders all have their own stories to tell on how unfriendly it is to newcomers.

The folks behind Lisk intend to change that. They want to make it as easy as possible for new developers and even new traders to get onto their platform. That’s why they do everything in JavaScript, probably the most easy-to-learn and most popular language among web and app developers. That’s also why they insist on a Graphical User Interface (GUI) in their wallets. For example, they’ve introduced a very cool way of showing the user’s address, which they call “Lisk ID.”

The disappointment: Yesterday’s conference in Berlin was almost entirely focused on marketing and branding, not core changes to the technology.

This Leads Me to 4 Moderate Concerns …

First, overreliance on sidechains. Lisk may be relying too heavily on sidechains to power its scaling. Sidechains allow you to use the same infrastructure as the original blockchain on a completely separate blockchain, but in such a way that the two are interconnected.

The concept is certainly a must-have for newer blockchains. However other platforms ALSO support tokens on top of their main chain.

Moreover, sidechains are complex. So they run counter to Lisk’s focus on simplicity: Anyone who wants run his or her own Lisk sidechain needs to be very familiar with the ins and outs of how blockchains work. That’s something we believe the vast majority of app developers don’t want to deal with. Especially Lisk’s target audience.

The best design would be one that accommodates both approaches: (1) Sidechains for projects that require a lot of bandwidth AND (2) tokens on top of the main chain for those Decentralized Applications that mainly just want a token. Lisk supports only the former solution.

Second, competition. Lisk isn’t the only competitor in the field of decentralized applications (dApps). And it’s certainly not the only one that supports sidechains. Ethereum, EOS, NEO, Cardano, Ark, ICON and others have similar features.

Third, inferior adoption. Most of the competing projects have stronger adoption metrics (especially Ethereum and NEO). Or, they have more robust technology (EOS or Cardano). In the face of such strong competition from other, more established players with stronger developer teams, it may be difficult for Lisk to gain adoption.

Fourth, it could take time for the rebranding and marketing to take hold. Perhaps the place where Lisk may stand out is the focus on newcomers to the crypto world and the general ease of use. And yes, going for a rebrand, new design, and marketing could help pave the way for this platform to become one of the more widely used ones in 2018 and beyond. Especially with the development fund to aid new projects in need of funding. But it’s too soon to say with confidence.

The Market Reaction

Initially, it looks like investors were mostly disappointed, and the Lisk token fell roughly 12%. Last Friday, we warned subscribers it could be a “buy-the-rumor-sell-the-news” type of event, and it was.

This is very typical in cryptoland. Irrational exuberance. Investors pricing in the best possible scenario. Until reality sets in. Then prices naturally slide.

One day’s trading is not a final verdict. So for Lisk, the jury is still out. It may start getting real adoption as a result of this conference. And if so, it could drive some nice upward price movement. We shall see.

Bottom line: Lisk doesn’t stand out for its technology. When push comes to shove, a key deciding factor will be whether or not Lisk promoters can get newcomers excited about their platform. Let’s give them a chance and see what they can do.


About the Editor

When econometrician and pro trader Juan M. Villaverde first applied his algorithms to Bitcoin years ago, he discovered a regular cyclical pattern. And he has since used it to build the world’s first crypto timing model based on cycles. Thanks to his analysis, the Weiss Ratings team has accurately picked the top and bottom of major crypto booms and busts.

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