Sometimes I like to speculate. I’ll take some profit out of a healthy position and buy something either random or close to it. Usually, I’ll go to the site of a given project and make a few judgments about the potential of the startup company to address a real market need and then buy a few tokens, never more than a hundred bucks’ worth. Right now, I’m in an interesting situation with Civic (CVC) after deducing that their authentication product was worthy of a bit of attention.
Last August, I bought some random junk on the internet. AAVE, GNT, ALGO, CVC, and VEO, to be exact. These five tokens seemed to represent potential at the time, and I did well on the GNT already. VEO went up quite a bit, but I decided to hold anyway to let the market cap inflate some more. ALGO just burned me again, as it frequently does when I put a little money into it, but the most interesting token of the group to me right now is CVC.
What is Civic and Why is it Performing So Well?
Civic is a one-stop-shop for KYC and other authentication needs. You download a wallet app, go through the steps to authenticate, and then use the Civic Wallet to authenticate in Civic Partner apps. There aren’t many Partner apps yet and Civic’s technology seems rather fresher than we might assume, considering they were founded in 2015, but the token was low and the tech seemed great so I bought some CVC as a speculation effort and it seems to be working out fairly well all of a sudden.
I’m happy to announce I didn’t sell all of my CVC back before this spike, but unfortunately, I’ve been unable to sell during the spike either. Don’t send tokens to wallets you’re not 100% sure of, kids! Small investments to play with are a good idea, but when the price was down I made a few mistakes and seem to have ended up sending the small amount of CVC tokens I held to an address I don’t have access to anymore.
That little frustration is beside the point, however, because it looks like Civic may be turning the corner with respect to… something. Adoption, maybe? It may be time to take out a larger position here if this spike can be read as a bullish long-term development. Let’s investigate a bit and see if this sudden surge of confidence might be a testament to the strength of the product. If it isn’t, we may end up convinced that this is a situation where the market has simply gotten too excited for its own good.
Who Uses Civic Wallet?
One important question to ask as we make our assessment of the potential of CVC to outperform the market here needs to be a simple business question: who uses the service? Is the user base likely to grow, or are we likely to get snared in a failure to launch scenario where the tech doesn’t ever really get off the ground?
After some googling, I haven’t really found a very satisfying answer to this. I believe the interoperability with ETH that CVC offers could be the answer that we seek. Maybe next to nobody is using CVC right now, but the powerful authentication it provides may be used in any number of ways. Voting is one use-case that comes rapidly to mind, but exchange registration could become a snap as well.
The crypto community is the most obvious use-case for CVC, but today the technology only sports about a $50M market cap, which seems to more or less account for the lack of users. The cap should go up as the user base increases. It looks like this could be an excellent value buy in the near future.
What is the Maximum Potential Market Cap?
Another question I like to ask when I play the speculation game has to do with the potential market cap of a given project. And Civic could be at least as large as Chainlink if it serves the same sort of oracle function—that is, if Civic manages to successfully solve the problem of trustless user verification on the blockchain.
We know that a technology like this can be developed a variety of different ways from watching the BAND Protocol team pivot to the Cosmos-based BANDChain system, so the ETH ecosystem does not seem to be a limiting factor that could curtail growth if the product-market fit is eventually dialed in.
DeFi is cool, and anonymous, but many times during ordinary trading operations we users are called upon to submit various forms of ID. At first, this was a real problem for me, though I don’t worry quite so much about it anymore. Civic allows users to see exactly what information their dApps are getting about them and why, so there is the potential here for it to actually clarify these matters to some extent while also remaining decentralized and giving the user more complete control over their own data.
Without speculating about competition because there is little or no information on anything directly similar, it seems that CVC could turn out to be a missing puzzle piece in digital life today. 0Auth, the protocol which allows Facebook and Google sign-in on third-party websites, could cede substantial territory to CVC over time.
On a purely speculative basis, having outlined the troubles with coming up with a bulletproof estimation, I believe it’s fair to expect Civic’s market cap to eventually be over $1B if nothing terrible happens. The timeline is difficult to estimate because we don’t know much about adoption rates or possible stealth competitors, but under the current circumstances it’s fairly easy to see why Civic is doing so well. The USPS just filed to patent a voting system which might be plug-and-play with Civic’s authentication technology at some point in the future, so it’s safe to say that there is absolutely tons of potential upside here, but it may still be too early to make a big investment because we do not have a good reason to believe there’s much in the way of a timeline available and we all know things can go wrong.
