Wednesday, November 29, 2017

Recent Buy – AION

I’ve been meaning to write about this for a while, but haven’t had the chance until now. Better late than never…
I participated in my first ICO/token sale in the digital asset/crypto-space in early October! The experience was interesting to say the least and I went through various steps in the process, which gave me a better understanding and practical experience of the cryptoworld. It’s one thing to read about how coins are transferred and are visible on the public blockchain, but actually performing this transaction gave me a lot of confidence for future use of this space. Anyway..back to the topic of the token sale.

I have not been impressed by most of the ICO/token sales going on in the marketplace. And for good reason. There are a lot of scammers out there as this avenue has opened up as a quick and easy cash grab. Nevertheless, I took a dive and invested in one and I thought this project had a promising future, and good leadership. I bought 500 Aion-1 (AION) tokens for the Aion Network — which is touted as the third generation of blockchain network (more on this below).
Buying a crypto currency that is liquid and used as a store of value or other forms of value transfer is one thing. Buying a token for a project that is still in the works is completely different. I have no idea how I will profit from this trade. This will be part of the learning curve in the space and for now, I am treating this simply as dead money that I am putting to see this project work and hopefully take off. If the project succeeds in the marketplace, then the token might see value and I could potentially profit from this trade, but I am keeping my expectations low.

Recent Buy Decision

  • Nuco, the company behind Aion Network, has great leadership. The CEO Matt Spoke sits on the board of the Enterprise Ethereum Alliance (EEA). The board consists of mostly heavyweight/megacaps such as Intel, Microsoft, JPMorgan, Santander, BNY Mellon, Accenture, CME Group, University of Illinois. The only three small players on the board are: Nuco, Consensys and Blockapps. Being part of this community puts Nuco in a position to develop technology that can address and solve future problems and market to the large enterprises.
  • Nuco’s advisory board is just as impressive. Advisors include Vitalik Buterin (founder of Ethereum) (although he is an advisor of Nuco, he is not an advisor on the Aion project), Alex Tapscott, Dennis Bennie, Tony Van Marken, Michael Tang etc.
  • Right, onto the project itself: Aion. The company views this as the next step in the blockchain evolution and calls it the third generation.
    • According to the CEO, the first generation was cryptocurrencies like Bitcoin, which had one specific purpose; while the second generation was a more generic platform such as Ethereum, which had smart contracts built into it. The third generation is the inter-communication of these various platforms and blockchains to allow for seamless transfer of value.
    • The idea is to build something akin to the router in traditional networks — the Aion Network would allow for various blockchains, whether private or public, and speak a common language.
    • A couple of examples illustrate how this would be useful in the real world. Someone might be interested in triggering a smart contract that resides on the Ethereum blockchain when something happens on say, the Bitcoin blockchain. This is not possible with today’s technology, since one does not have any relationship with another. With Aion, you can link up these blockchains (think linking up various small networks to form today’s Internet) and Aion will allow that smart contract to get triggered automagically. Another example is interaction between private and public blockchains. Say, a private blockchain in the healthcare industry needs to communicate and refer to verification in the insurance industry, and further trigger a payment on another blockchain — all this can be performed in a seamless manner if each of these blockchains can communicate securely and allow for the smart contracts to get triggered without manual intervention. All of these are possible only when these various blockchains can communicate via a common language — which is what Nuco/Aion are trying to build.
    • Aion also does not want to be the only entity that is incharge of this, so a lot of thought is also being put into incentivizing “bridge builders” to run the Aion network and earn profits in the coming years. This, I think, is key to attracting companies like the cryptominers of today, which will allow Aion to scale and potentially give Aion-1 a higher monetary value.
  • Nuco also believes that the real growth will come when there is mass adoption (just like anything else in the space), but is especially targeting the enterprise space. This is where their seat on the EEA will come into play and I think Nuco is well positioned to leverage the relationships.
As you can see, the business case is sound and the management is definitely in a spot to succeed. The execution will be key and I will be watching the development closely over the coming months/years.
There are a couple of aspects of the overall architecture that I do not agree with, but I can see why the designers chose the option. Overall, I am excited with the solution and if the team succeeds, this could be fantastic for the value creation in the blockchain space.
I have barely scratched the surface with this post. If you are interested to learn more about this project, be sure to check out Episode 14 on Blockchain Innovation, where the interview with the CEO sheds light on how the project is being conceived and evolving as the industry changes day-to-day.
What do you think about this purchase? Be sure to leave a comment below.

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