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

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

By CryptoBoomer | Investments | 21 Feb 2020


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The world of blockchain had been criticized for a very long time due to the lack of real use cases. Many newer altcoin projects were just trying to solve the exact same problems and did not really introduce anything new except for faster speed or different consensus algorithm.

One of the unique cases of older altcoin projects is Siacoin. Sia is trying to solve the problems with the cloud storage industry, which it claims is too centralized in the hands of the few, and the world needs an alternative to fix it. Yes, with Sia, you don’t need to trust any centralized third party, and you are not required to sign up with anything. There’s no single point of failure to its decentralized cloud storage platform. 

But here’s the more important question. Is Siacoin (SC) a good investment for our money? Let’s find out together!

Siacoin - Summary

Siacoin is trying to re-imagine the core of the cloud storage platform with its creation of a decentralized file storage ecosystem. With this concept, there are incentives for people who want to rent out their unused drive space, and they will be rewarded with SC (Siacoin).

The incentives are needed to maintain the decentralized ecosystem because nobody would do it without any monetary reward. And thanks to the utilization of the blockchain, Sia can improve the economics for both users and hosts. The blockchain also secures users’ data because the sensitive information is not all stored in one centralized data center.

The eventual aim is to create a much more reliable, secure, and affordable cloud storage plan compared to centralized data storage solutions such as OneDrive, Dropbox, or Google Drive. And as everybody knows, nowadays people use the cloud to store their sensitive information. It makes everything even riskier as there is a lot at stake when there’s a security breach in these centralized data centers. Sia hopes to minimize that risk with the blockchain technology.

Also, Sia aims to become the censorship-resistant platform. There’s no single person or government that can easily instruct Sia to shut down the servers because the servers are all provided by the community. The hope is that Sia’s decentralized data storage platform will bring “peace of mind” to businesses who store their data there as they know Sia won’t suddenly change their terms of services anytime they wish.

Another good thing about Sia is that the codes are totally transparent and open-source, which enables any individual or entity to review it anytime they want. There is also a community of developers who tries to build new applications by utilizing Sia API.

Analyzing Sia Team

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The co-founders of Sia - image source

When it comes to crypto investment, one of the most important things is to analyze the core team of the same project. Why? Because when you invest in a cryptocurrency, you believe in its future. And who can help you to realize that same future if not the core team of the same cryptocurrency?

So, how about the Sia team? The company behind Sia core development is called Nebulous. There are two co-founders of the Sia project. They are David Vorick and Luke Champine. 

David Vorick is the Chief Executive Officer of Nebulous, the company that develops Sia. Before his time with Sia, he was the Software Developer at IBM in 2013.

The second co-founder is Luke Champine, who is still around in the project, without any official executive title. Luke was the Platform Mapping Engineering Intern at Akamai Technologies in 2013. He was also the Presales Technical Intern at Kronos for three months in 2012.

Besides the two co-founders, there are also other important figures on the team. Let’s start with Zach Herbert, who’s been with Nebulous and Sia since January 2017. He serves as the Chief Operating Officer (COO). Previously, he was the Head of Operations before he got promoted to Vice President of Operations. And then, he was promoted again to the COO position since April 2019. 

Zach is also the co-founder of Obelisk, Inc, the USA-based crypto mining hardware producer. It is claimed that Obelisk, Inc has earned over $26 million of revenue since its inception in 2017. Zach’s other experience includes his time with Altisource, a customer experience’s new case management software. He spent one year and 10 months with Altisource as a Senior Technical Analyst.

Next, we have Steve Funk, who acts as the Head of Support in the team. He’s been with Nebulous since January 2018. Previously, he served as a Trials Analyst for Comcast at Apex Systems. He was also the Technical Trainer and Instructional Designer at Apple for more than eight years.

After Steve, we have Chris Schinnerl, who serves as the Core Developer in the project. He has ten repositories under his GitHub profile page where you can easily check by yourself. Chris lists himself as someone who’s based in Zurich, Switzerland.

Next, there’s Eddie Wang, who serves as Product Engineer at Nebulous. He has a massive amount of experience because he’s also the co-founder of Luxor Technologies, a multi-cryptocurrency mining pool that’s created for high-quality crypto communities. It looks like he was also the Software Engineer for MyEtherWallet from October 2017 to January 2018. Prior to his time with cryptocurrency projects, he used to work for Scotiabank, a popular multinational bank.

After Eddie, there’s also Matthew Sevey, the software developer at Nebulous. He’s been with Sia since April 2018. Previously, he was the Project Manager at Procter & Gamble. He was also the Web Development Follow at Startup Institute.

There are two other software developers. They are Marcin Jachymiak and Peter-Jan Brone. Marcin has been with Nebulous since July 2019. Previously, he was the Engineering Intern at Chaincode Labs as well as Bitcoin Optech. As for Peter-Jan, he’s been with the team since October 2019. Previously, Peter-Jan was the Blockchain Developer at SettleMint.

And as for the Head of Product Strategy, we have Manasi Vora, who’s also the founder of Women in Blockchain, a popular initiative that encourages women to participate in the blockchain industry. Manasi was also the researcher for MIT Digital Currency Initiative at MIT Media Lab.

All the names above represent the power of the team behind Sia. I say some of them have pretty interesting background although I wish there are more available information about the co-founders. Overall, the team looks pretty solid to me.

The Use Case Of Siacoin (SC)

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The illustration of Siacoin

We also need to know the specific use cases of the cryptocurrency we are analyzing before we decide to invest in it. After all, we are trying to invest in the coin itself, right? So, how about the Siacoin (SC)? Well, the Sia ecosystem utilizes two different tokens. They are Siacoin and Siafund. 

The difference between Siacoin and Siafund is that Siafund is pre-mined, and there are only 10,000 SF in the entire ecosystem. On the other hand, Siacoin is a mineable coin, just like Bitcoin and most older altcoins.

The idea of Siafunds is to support Sia’s development and operations. When a storage contract is completed between a host and the renter, the transaction would be automatically finalized. 

The nodes in Sia will then calculate how much Siacoins are owed to the host and how much of the other portions belong to the renter. The 3.9% of the total funds in the contract will be shared among 10,000 Siafunds HODL-ers in the blockchain.

For example, when a contract has 500 Siacoins from the host and other 500 Siacoins from the renter, 39 Siacoins will be allocated to pay all the Siafunds HODL-ers.

Partnerships

Unfortunately, partnership is not Sia’s strong subject. Sia believes that the adoption metrics and real implementations are what matter the most. Sia lists various investment firms behind the financial power of the project, but they are not really “partnerships” like in other altcoin projects.

These investment firms are A_Capital, BainCapital Ventures, Dragonfly Capital Partners, Bessemer Venture Partners, Fenbushi Capital, HackVC, First Star Ventures, INBlockchain, SVAngel, Raptor, and Procyon Venture.

But, once again, these investment firms are just venture capitalists who provide financial backing to the project. The team behind Sia, Nebulous, does not have a traditional crypto partnership that’s often promoted by other altcoin teams.

External Factor And SC Price

So, we have learned the most basic fundamentals of Siacoin and the team behind it. But is it enough to make our decision? Unfortunately, not. When it comes to an altcoin price, there’s one big external factor that can affect its future. That factor is called Bitcoin price.

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The recent upward movement of BTC might affect SC price as well - image source

Yep, whether you like it or not, Bitcoin price action has been dictating altcoin prices since many years ago. That means the enthusiasm for altcoins usually goes up when Bitcoin price goes up. The enthusiasm for altcoins usually goes down when Bitcoin price goes down as well.

So, how about 2020? Well, nobody knows for sure, but many people predicted that this year would be quite good for Bitcoin price. So far, from January to February 2020, Bitcoin has been slowly going up. There are people who claimed that this upward movement happened due to the premature anticipation of the upcoming Bitcoin’s mining reward halving event that will take somewhere in the middle of the year.

If Bitcoin price keeps pumping until the end of the year, Siacoin price might go up as well. If the prediction doesn’t come true, you have to be careful, because altcoin prices can easily go down.

Either way, you always need to pay close attention to Bitcoin price action if you decide to invest in Siacoin.

Social Stats

Just like many altcoins that were created pre-2016, Siacoin doesn’t rely on Telegram chat to maintain its community. On the other hand, Siacoin actually has a Discord channel, and it looks like they have a decent amount of followers on their Discord channel.

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Stats from Sia Discord channel

Other than Discord, Sia has Twitter account, Reddit page, and Youtube channel. From these three, it looks like Sia has the most success on Twitter, with over 100K followers, and a medium amount of user activities in each of its tweets.

SIA Releases Skynet - Game Changing Feature

The very recently released platform that could be the game changer for Sia is this thing called Skynet. Basically, Skynet is a content delivery network and a web hosting platform that was launched on February 18, 2020. Skynet itself is fully powered by the Sia network. Skynet is like a public web hosting service where it supports files and apps from individual users and developers all over the world. 

The files that are shared through Skynet will always be available when there’s at least one peer that can pin the file. In other words, it’s very unlikely that your data will go down because there’ll always be someone who can help you pin it.

The advantage of Skynet is the cost. Thanks to its distributed ecosystem, Skynet charges only $5/month per terabyte, roughly only one fifth of monthly costs at Amazon. Another comparison, Google charges $9.99/month each terabyte. Huge advantage when you use Skynet.

Conclusion

Sia is targeting the right use cases. While many other altcoins are just trying to be the faster and more scalable Bitcoin or Ethereum, Sia is targeting a specific use case, which is about the decentralization of data storage ecosystem. It has the right heart and the right focus.

That being said, there are also several drawbacks to the project. The co-founders don’t really list their experience prior to their time with Sia. The project also lacks visibility, partnership, and adoption at the moment. Hopefully, they can turn things around in the near future. That being said, with the addition of Skynet, it looks like they will be able to gain significant adoption as it is getting popular.

So, what do you guys think about Siacoin? Do you think it’s worth your money? And, by the way, kindly check my other recently published articles in the investment series:

Is HYDRO A Good Investment?
Is NANO A Good Investment?
Is Kucoin Shares A Good Investment?


CryptoBoomer
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