What is Electroneum?
The purpose of Electroneum is to gain mass cryptocurrency adoption through smart phones. The mobile Electroneum wallets can easily be managed on a smartphone and coins can be generated by a mobile miner. The Electroneum wallet enables easy access to its cryptocurrency within a few minutes of downloading the application. Electroneum is unique because the smart phone application gives users tokens for running its app.
What is the problem?
Current cryptocurrencies are not accessible to the average person. Generally, acquiring a cryptocurrency requires complicated mining equipment or stringent identity verification from websites that may not be trustworthy. Electroneum creates a quick entry point for mass adoption of a cryptocurrency.
Electroneum breaks down the barriers to entry by providing users with a simple way to “mine” cryptocurrencies. Electroneum has the security and anonymity of many other cryptocurrencies but is controlled by a free and easy to install app that allows users to receive Electroneum without credit cards or identification. By installing the app, the user is able to start “mining” Electroneum in their wallet. The app enables coin distribution and simple peer to peer transactions between everyday people.
Electroneum Market Context
The two main markets that Electroneum is focusing its attention on is gaming and gambling. According to its whitepaper, “The app based Electroneum virtual currency exchange will allow gamers to transfer some of their hard work and time from one game to a new game by enabling them to monetize their “in-play” virtual currencies and take them with them into the real world”. The whitepaper also addresses the fact that about 2 billion people do not have bank accounts, but some of those people have smartphones and access to the internet. Electroneum aims to open up gaming and gambling opportunities for some of the 2 billion users that have access to the internet but do not have a bank account.
Mining vs Airdrop
It is interesting to note that the network is secured and transactions are processed through normal PoW mining. This means that mobile “mining” isn’t actually mining at all. The mobile app simply allows pre-mined tokens to be airdropped into a user’s wallet. The actual mining is similar to Monero, as they used the Monero code base to build their own blockchain.
The ETN token has a 21 billion coin supply. Unlike Bitcoin and other cryptocurrencies, the ETN token only uses two decimal places. ETN uses the same decimal system as fiat currencies, so people can relate to ETN as a form of money. They raised $40 million dollars in ICO by selling 4 billion tokens. 12.6 billion tokens were pre-mined of which 7 billion are for the mobile miner platform (held in cold storage by solicitors and released in phases as the mobile mining moves forward). The remaining tokens are left for normal PoW mining block rewards.
Electroneum was created by number of experienced software developers led by Richard Ells. He founded a successful social media marketing company used by fortune 500 companies such as Herbalife and Avon.
Electroneum has recently announced that its instant payment system and vendor API are almost available to be tested with vendors. To learn more about exciting Electroneum updates visit the Electroneum blog to stay on top of recent updates with this project.
Apple recently banned cryptocurrency mining apps on the App store. It is unknown how this is going to affect Electroneum, as its mobile app does not technically mine a cryptocurrency. The app has yet to be approved which is a serious concern for adoption. In addition, it is hard to see what is stopping someone from buying many old smart phones and gaming the Electroneum network to receive a disproportional number of tokens. Finally, it is unclear how air dropping 7 billion tokens will affect the tokens value.
Electroneum is an interesting project as they seek to tackle adoption, one of the most important issues in cryptocurrency. A mobile cryptocurrency may be needed to get people transacting in cryptocurrency. That being said, this project is incredibly speculative. The white paper lacks critical information about the token economics and It was difficult to get answers from the community. Also, it is unclear if the application will be approved for iOS. It is hard to see how the Electroneum instant payment system has any competitive advantages over something like Apple Pay.