A cryptocurrency needs to be differentiated. Why would anyone use a coin that is hard to even spell and doesn’t exist on exchanges when there are numerous cryptos like bitcoin?
So electroneum targeted becoming the currency between remote freelancers and buyers of their services. To enable this, they:
- built anyTask which is a freelance services marketplace like Fiverr
- enabled users to freely earn electroneum by installing the app. This provides an incentive for low income individuals to earn money by downloading an app.
Since these are their primary differentiating factors, we deep dive into these:
anyTask is a generalist freelance services marketplace with a limited scale
There are numerous generalist freelance marketplaces and an easy metric to rank them is their monthly traffic. Below, you can see how anyTask compares to others as of Jan/2021:
- Fiverr: 59.1M/month
- Upwork: 37.10M/month
- anyTask: 0.18M/month
As with most web based marketplaces, freelance marketplaces are a winner-take market. So we don’t see anyTask gaining a sizable portion of this market.
As of early 2021, it does not seem to be on a consistent growth trajectory. However, it appears to have grown significantly since August.
To boost its growth, AnyTask launched TV ads in the US. It may be a morale boost for investors in electroneum but a 2 sided marketplace with barely a few hundred thousand users should focus on digital marketing rather than expensive TV ads. We do not recall any tech company launching TV ads so early in their traction ever since the dotcom bubble.
electroneum team is launching projects to promote their platform
They have launched these projects to boost the marketplace
- announced the plans to launch TaskSchool to support anyTask. Given that we don’t see anyTask becoming a significant success, we see these as futile efforts.
- M1 phone is a low end smart phone. It sounds like a good initiative and would also boost their app not just the freelance services marketplace
Though these could be good initiatives, it is too many things to do for a company of ±50 employees. Any startup builds subpar or at best mediocre products without focus. This seems to be the case with electroneum with their app getting 2.5 stars on Google Play. You have to do badly for people to rate an app giving away free money with 1 star. We noticed many user problems with customer service. They could invest in better customer support rather than these new initiatives.
From a technical perspective, Electroneum is not innovative
Since this is a cryptocurrency project, it is worth looking into the technical aspects:
- They had a bug in their blockchain which their tech team overlooked even after they were publicly warned about it.
- As explained in their updated whitepaper, they have a blockchain that is validated by permissioned parties authorized by them. This introduces a permanent middle man in the system (ETN team) and defeats one of the important purposes of using cryptocurrencies (decentralization of trust).
Is electroneum a good long term investment?
We don’t think so. In the long term,
- We wouldn’t invest in a 2 sided online marketplace with limited traction in a market with giant companies so the anyTask part of electroneum is not valuable in our perspective
- Electroneum is one cryptocoin among numerous and we similarly wouldn’t invest in it.
Could you make money with electroneum?
Using the electroneum app
In the past, ETN team was giving away rewards of ±$3/month to incentivize users to download the app and join the network. However, they have stopped this in 2020.
Investing in electroneum
Some already made money as you can see from the price of electroneum below. Investors buying in February 2020 and selling after a year would have quadrupled their investments:
Many assets with limited intrinsic value such as gold, silver or bitcoin are valued highly by investors. However, this is due to the significant market acceptance over history. Even wide market acceptance is not necessary though. Assets with no intrinsic value and limited market acceptance like Dogecoin have created billionaires.
So you could speculate, buy now and sell at the right time and make money with luck. Or it could end up as a dud where you lose all your money. We are not in the game of speculating on assets without intrinsic value but it is definitely a popular pastime these days.
If you want to read about electroneum clones which also introduced referral marketing into the concept, feel free to check out Pi Network or Bee Network. We are more skeptical about these projects since their currencies are not even tradable but they have accumulated passionate followers. And if you want to do something more productive, we have advice on how to lead a more productive life.
Cem has been the principal analyst at AIMultiple since 2017. AIMultiple informs hundreds of thousands of businesses (as per similarWeb) including 60% of Fortune 500 every month.
Cem's work has been cited by leading global publications including Business Insider, Forbes, Washington Post, global firms like Deloitte, HPE, NGOs like World Economic Forum and supranational organizations like European Commission. You can see more reputable companies and media that referenced AIMultiple.
Throughout his career, Cem served as a tech consultant, tech buyer and tech entrepreneur. He advised businesses on their enterprise software, automation, cloud, AI / ML and other technology related decisions at McKinsey & Company and Altman Solon for more than a decade. He also published a McKinsey report on digitalization.
He led technology strategy and procurement of a telco while reporting to the CEO. He has also led commercial growth of deep tech company Hypatos that reached a 7 digit annual recurring revenue and a 9 digit valuation from 0 within 2 years. Cem's work in Hypatos was covered by leading technology publications like TechCrunch and Business Insider.
Cem regularly speaks at international technology conferences. He graduated from Bogazici University as a computer engineer and holds an MBA from Columbia Business School.
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