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Sirwin

Is Lisk (LSK) A Good Investment? In-depth Analysis and Near to Longer-Term Expectations

By CryptoBoomer | Investments | 14 Nov 2019


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Lisk is one of the popular smart contract blockchain platforms that try to compete directly with Ethereum, EOS, NEO, Tron, and other similar ecosystems. The biggest difference between Lisk and its competitors is the focus on JavaScript. With Lisk, developers can directly build their decentralized applications (dApps) in node.JS.

The goal is to provide the platform as wide as possible to non-specific developers. As we all know, there are many developers who are already familiar with node.JS. Compared to Ethereum, where everybody has to learn Solidity in order to be able to develop dApps, Lisk sounds like an “easier” option.

This article will analyze whether investing in Lisk worth your money or not in the long-term. Let’s find out together!

Lisk - Summary

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When Ethereum was introduced to the crypto space a few years ago, many people called it a revolutionary idea that would change the industry forever. Unlike Bitcoin and other older altcoins, Ethereum’s main idea was to develop smart contracts. These smart contracts are vital to the creation and development of decentralized applications (dApps).

Ethereum has successfully become the second-largest cryptocurrency by market cap, only surpassed by Bitcoin itself. Despite that, Ethereum has been facing adoption problems. First of all, Ethereum’s programming language for its dApps is called Solidity.

Most developers outside the Ethereum community aren’t familiar with Solidity, and this fact created a “barrier entry” for developers who are interested to learn smart contract but simply don’t have enough time.

The second problem is Ethereum’s scalability. It’s already well-known in the crypto community how Ethereum network easily gets “clogged.” When CryptoKitties (a famous game built on top of Ethereum) became famous in 2017, it affected the entire Ethereum network. At the time, transaction costs became very expensive.

There are many newer public blockchain projects that tried to solve Ethereum’s scalability and adoption problems. EOS, Tron, and many others introduced DPoS (delegated proof of stake) consensus algorithm to make the entire transaction confirmation system more efficient. Not only that, but they also use different smart contract programming languages to attract mainstream developers.

Then, there’s Lisk. Similar to all these other “Ethereum alternatives”, Lisk also has its own unique selling points. As we have mentioned above, its biggest selling point is the node.JS optimization for its decentralized applications.

Lisk was created to solve the adoption problems that have been haunting the crypto space since years ago. Lisk team claimed blockchain needs to be “easy to adopt” if it wants to go mainstream. This is why Lisk does not utilize Solidity and go straight with Javascript instead.

And of course, just like all the other newer platforms, Lisk also utilizes DPoS (Delegated Proof of Stake). The idea of using DPoS means every transaction confirmation will be processed faster as it does not need confirmation from thousands of nodes.

Lisk’s consensus algorithm has 101 delegates who effectively have the right to become the block creators. Lisk believes the number “101” is more well-balanced and decentralized compared to 21 or 28 representatives that are often used by more popular DPoS-based blockchain platforms.

Last but not least, Lisk’s other selling point is about the usage of side chains. The idea is to mitigate traffic with the concept of side chains. With this feature, Lisk’s main chain won’t repeat the same problem that Ethereum got during the golden era of CryptoKitties. 

In a hypothetical scenario of CryptoKitties being built on top of Lisk, all the traffic that was caused by the game could be mitigated to the side chains.

Analyzing The Team Behind Lisk

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Investing in a crypto token or coin requires more than simple knowledge about the project itself. Here’s why. Because cryptocurrency is not only about what it can do today but what it will be able to do in the future.

And we have faith in what the platform can do in the future by trusting the core team behind the platform. More often than not, the success of a crypto project depends on the development and marketing of the project itself. And people who are responsible for development and marketing are the core team like the co-founders and several other key players.

So, how about the Lisk core team? Well, the team is mainly based in Berlin, although the Lisk foundation itself was set up in Switzerland. The main faces behind Lisk were Max Kordek (co-founder and president) and Oliver Beddows (co-founder and vice president). 

Based on their LinkedIn profiles, apparently, there’s not much background history for both co-founders. Apart from co-founding both Lisk and Lightcurve, both of them do not want to show their history with their previous companies.

Another key player is Maciej Baj, who’s basically the Head of Development. Before he joined the Lisk team, he was a full-stack developer for Nokia from June 2014 to December 2016. He is also one of the core developers of the Lisk blockchain.

Apart from Maciej Baj, another important core developer of Lisk blockchain is Lucas Silvestre. At first, he was hired as a full-stack developer from March 2018 to September 2018. Since October 2018, he has become one of the core developers of the blockchain itself. Before he joined Lightcurve and Lisk, he was the developer for VRM Tech, Urban Epic, and Moobile Inc. 

For your information, Lightcurve is a blockchain development studio and consultancy, and it’s the entity that’s responsible for developing Lisk blockchain. That’s why above, you can see Lisk’s key players are also the core members of Lightcurve.

So, based on my research regarding Lisk core team members, we believe Lisk has capable and decent players that can help Lisk to fly higher.

Lisk Scalability And Partnerships

Based on the information that we gather from multiple sources, Lisk has the capability to process 25 transactions per block. There are no official stats from the Lisk core team nor from the official website about its ability to process how many transactions per second. Apparently, the core developers do not focus their main efforts on speed but rather more about use cases and other features.

Regarding partnerships, Lisk has several decent partners. One of the biggest announcements was their partnership with Messari, a registry for verified and up-to-date information. Another important announcement was Lisk Center Uthrect’s partnership with Blockchain030

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Lisk also has partnered with WEB Bank, a bank that is jointly owned by TokenPay and Litecoin Foundation, as reported by Cryptovest.

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The Importance Of LSK Token

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While investing in a crypto project is more about investing in the whole ecosystem, but of course, it’s also essential to know the role of the native crypto token. After all, the natural demand for the token will be driven by the token use cases.

So, how about Lisk’s native crypto token? It is called LSK token. The role of LSK token in the Lisk ecosystem is to be used as transaction fees and to delegate your votes in Lisk consensus. In the future, the Lisk core team also promises more use cases of LSK token.

As of now, for each outgoing transaction, you need to use 0.1 LSK token. For delegate registration, you are required to spend 25 LSK. Each vote also requires 1 LSK token. Multi-sig requires 5 LSK per member. And for the second passphrase, you need to spend 5 LSK.

External Factor And LSK Price

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Of course, when it comes to crypto investment, you also need to think about external factors. It’s not enough to judge whether one crypto token worth your money or not just based on its fundamentals. Unfortunately, most altcoin prices are directly connected to Bitcoin price.

This is also the case with the price of LSK token. Just like the majority of altcoins, LSK’s best moment happened back in January 2018 when each LSK token was worth more than $30. After the Bitcoin price crash in 2018, altcoins crashed even further. LSK was not an exception.

Many people expect LSK price to rise significantly when Bitcoin goes up. Knowing that 2020 will be the year of the next Bitcoin mining reward halving, it’s important to keep updated with Bitcoin price action. After all, the BTC price will be one of the biggest factors in the future of LSK price.

Conclusion

Lisk is one of the interesting projects that try to solve dApps scalability and adoption problems. That being said, it also lacks unique selling points, and it is often seen as “one of the Ethereum alternatives”. Being grouped with other less popular dApps platforms is not easy. 

Lisk needs to prove itself before the big crypto traders, and investors can see that this project is indeed a worthy challenger of Ethereum. 

LSK token itself will get more natural demand once Lisk blockchain gets adopted by more companies and institutions. Whether the core team can help increase the natural demand for LSK token or not, only time will tell. 

Outside its own use cases, demand for LSK token (unfortunately) is still decided by crypto speculators.

 

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CryptoBoomer
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