Digital currencies, of the modern type anyway, launched with Bitcoin and with the goal (among others) of protecting consumers by giving them full control over their funds, and preventing unethical centralized entities from endangering their financial access and capability. There was even a cheeky message that threw shade at the fact that banks were bailed out during the 2008 recession.
This new system, decentralized and not reliant on centralized entities to carry out operations, allows anyone to become a part of the global economy with only a phone and an internet connection. No documentation, no protracted authorization processes and background checks - and all without leaving the house. This is especially important for those in developing countries, many of whom are without even the most basic of documentation, such as birth certificates.
While many newer projects are turning their attention to how smart contracts could be applied in a variety of ways, digital currency based payments remains the most popular application of the blockchain. Bitcoin may be at the top of this niche, but several projects have adopted new designs and techniques to better the possibilities in the hope that they can become one of the go-to platforms for digital payments.
The project we look at today is Electroneum (ETN), a digital payments project with a heavy emphasis on mobile-based payments solutions. We examine the history, goals, how to mine ETN, as well as the partnerships that have been formed and the competition that it faces.
The History of Electroneum (ETN)
Electroneum (ETN) was launched in 2017 by Richard Ells, an entrepreneur who has run two other successful businesses, SiteWizard and Retortal. The project is guided by the mission to “unlock the global digital economy for millions of people in the developing world.” i.e. offer banking solutions and services to the nearly 2 billion unbanked who are still kept out of the global economy because of a lack of documentation.
Ells conceptualized the idea for what is now Electroneum back in 2015, which was under development until 2017, when the company Electroneum Ltd. was formed.
Electroneum conducted its ICO in Q4 2017, quickly raising $40 million. Following this, the project hired Hacker One to audit its platform, the well known cybersecurity/bug bounty platform that conducts security vulnerability tests for businesses. In the same period, Electroneum also signed an agreement with Hong Kong Joy Telecom, a telecom provider in the region with a reach of 2 million customers.
The first half of 2018 saw multiple agreements signed (discussed in the partnerships section below), as well as progress with the network’s mobile miner. By Q2 2018, the network had reached 1.5 million registered users and upgraded its network to handle the larger volume of transactions.
Q3 and Q4 2018 saw fiat pairings introduced on multiple exchanges. However, the most important development in this period is arguably the KYC/AML compliance features, a move that makes Electroneum more favourable in the eyes of regulators. During this time, multiple plugins were also launched, and the team hit 2.5 million registered users.
Electroneum’s roadmap details the medium-term agenda for the team. In 2019, the team upgraded the network to the Proof-of-Responsibility (PoR) algorithm, reduced the block rewards and welcomed Non-Governmental Organization (NGOs) to help run the network. Future plans include launching their gig economy focused sub-project, GigFair, a vendor directory and an education programme.
The Purpose of Electroneum (ETN): Connecting the Unbanked to the World
Electroneum is a payments project through and through, but particularly concentrating on enabling mobile based payments, which is indisputably the go to means for payments in many developing parts of the world. While many unbanked individuals lack documentation for financial services, almost all of them possess a smartphone and use these mobile wallets to execute their financial services as much as these apps will allow them. As Electroneum themselves point to on their website, PwC has predicted the market of unbanked smartphone owners to be about $3 trillion.
The unbanked often use these mobile wallets to pay for groceries, local transportation, paying bills for utilities, topping up mobile phone data, and paying for tickets for events around the city. It is as much a wallet as their physical wallets are. The incentives laid out for the target stakeholders of the project - retail outlets, corporates, NGOs and users - are attractive, and as each user base grows, the potential for the ecosystem increases exponentially.
For retail outlets, they have an additional option for payments, can increase the number of visiting customers, can operate internationally more seamlessly and turn the digital asset into a profit in the long run. The connection to the global audience is particularly noteworthy, as we live in a world where commerce becomes increasingly global in nature. These benefits apply to corporates as well, though these benefit smaller businesses more, which have typically had difficulty in laying the infrastructure to reach a larger audience.
Interestingly, NGOs are involved in the running of the network, and they use the ETN that they are rewarded with to run their initiatives. Electroneum has already released mobile applications for both Android and iOS, which has no doubt played a part in the network reaching 3 million odd users. Other noteworthy features of the project include a smartphone launched by the project, called the Electroneum.M1 smartphone, which is priced at an affordable $80; the focus on creating a gig economy by paying users for learning and selling their skills; and the capacity to mine through mobiles/the cloud, the last of which we detail below.
You Can Start Mining Electroneum (ETN) in Under 60 Seconds
Mobile mining is possible with the Electroneum application, which will soon be rebranded as cloud mining. Users can earn up to $3 USD worth of ETN per month simply from mining on the app. This is particularly important for those in developing countries for whom $3 is a significant sum. The team prefers to distribute ETN as rewards to users of the app as opposed to having it earned by a few monopolies on the network.
The ETN token is very easy to mine, as the whole process is designed to be user friendly and set up in under 60 seconds. The application is easy on the phone and it’s battery, and requires logging in only once a week. This is important as the target audience of Electroneum are often those with limited internet connectivity. Cloud mining allows them to gain ETN even when the phone is switched off.
In order to begin, users will have to download the app and submit a few KYC related details, such as name, email id and a selfie. Once the entire process is complete, users are already rewarded with 25 ETN. The mining automatically begins and stores the mined tokens in the app’s wallet.
The video posted above is well worth watching, and sees founder Richard Ells himself describing the cloud mining process, emphasizing the ease with which they can get some cryptocurrency, as they would not have to go through an exchange.
The Electroneum team has managed to establish several partnerships, with most of them being with telecom providers, in keeping with their network’s function as a mobile-based payments platform. Of particular attention is the partnerships with regional telecom providers in developing nations.
Most recently, Electroneum partnered with Paycent app, with the latter now allowing payments to be made via Electroneum. Paycent is run by a Singapore based fintech company and the integration of the ETN token means that the token can be used anywhere where the app is used for fiat payments.
In February 2019, the project partnered with South African financial services provider and mobile virtual network operator The Unlimited. This partnership allows users in the country to top up mobile data and airtime directly with ETN.
Electroneum has also signed an agreement with Thailand’s One Development, which provides mobile network infrastructure and coverage for the nation, and the partnership will see the Electroneum blockchain be used as an end to end cryptocurrency solution.
Naturally, being in the digital currency payments space, Electroneum is competing with a lot of other projects, most prominently Bitcoin. Now, that doesn’t mean that it does not have something going for it.
While Bitcoin is the runaway leader in this game, many networks that are also offering payments solutions do so with something unique to their offerings: in Electroneum’s cases, the strong emphasis on mobile payments and KYC/AML compliance, while with others it may be privacy or interoperability. These are critical components of Electroneum’s business strategy.
Competitors to Electroneum include Bitcoin (BTC), Litecoin (LTC), Bitcoin Cash (BCH), Stellar Lumens (XLM), Monero (XMR), Zcash (ZEC), Dash (DASH), OmiseGo (OMG) and many others. All of these are focused on payments, though some have more specific use cases than others.
Africa and Asia are continents that are going to see the greatest benefit from the implementation of cryptocurrency based systems, and true enough, Electroneum is tapping into these markets. They are already vendors and telecom providers to make the process better for every stakeholder. Corporates and retailers are also a target with such features as APIs for easy integration - this wide net of uses puts Electroneum in a decent position to gain a foothold in the market.
It is perfectly possible for Electroneum to coexist with other tokens in the future, like in the way multiple mobile wallets and payments providers exist - especially in developing countries, which is a major target for the project. When complete blockchain interoperability arrives in the near future, which is most definitely going to happen, perhaps we’ll see multiple communities that use prefer one token over the other, for whatever reason. With interoperability, the practical hassle of having to convert these assets will not be a problem - and ETN will be as good as any other token in day to day usage.
The Electroneum has set out on a noble goal to bring banking services to those who need it the most, and roping in players who are in difficult financial positions. This is made clear in the project’s efforts to get NGOs to run the network, as well as the multiple projects launched in Africa, Brazil and Turkey.
There are definitely many players to contend with in this space. Will ETN be used extensively if and when Bitcoin becomes more accessible to all market segments? That remains to be seen.
However, the tight focus on mobile payments and benefiting the unbanked certainly puts the token and network in a good place to grow in the near future, and one cannot doubt the team’s sincerity and work ethic when it comes to achieving this goal.