Part 2: Fundamental Analysis
In this article I will be doing a full fundamental analysis on Xtrabytes. I will be looking at the coin and team’s past, its use-case, how the developers got to where they are, what they aim to achieve in the near and distant future with XBY, and how they plan to get there.
A Scam ICO Turned Community Coin
Xtrabytes was originally conceived as the Bitmox ICO scam that happened in early 2017. Two of the people affected by this scam were motivated to start a community, fix the source code, and take over the ticker. One of them was Zoltan Szabo. With 25+ years of programming experience and 7 years in cryptography, Zoltan was perfect for the job of restoring the code and making something out of this dreadful scam that lost so many people their money. The second one, Dave (CCRevolution) was a marketer. He helped spread the good word that Bitmox had turned into Xtrabytes and it would be a real coin with true and tested code, that does not plan to run away with anyone’s money. Zoltan was Hungarian, so he did not know English very well. He was almost totally deaf, so he was never able to learn it properly. Dave was his mouth and ears in the early days, communicating everything that Zoltan was doing, all updates, bug fixes, deadlines and any delays.
Since then the community has grown further. Three developers are working alongside Zoltan on the core of the XBY blockchain. A separate small team is developing the X-CITE client — a front-end application giving access to the core features of the XBY blockchain. A separate team to that is working to ensure that the User interface and user experience work together in harmony. Other groups have developed the start of the modules that will function on the Xtrabytes platform. Among them is the X-VAULT, used for data storage, the X-CHAT, used for decentralized messaging, and X-CHANGE, a decentralized cryptocurrency exchanged. Other functionality that is still private is also in the works.
The broader community consists of many writers, marketers, graphic designers, chatroom admins and managers. As many as 90 people have been paid in X-FUEL for their hard work helping XBY gain traction. At the time of writing there are nearly 6,000 Discord members, over 9,000 Twitter followers, 3,300 Telegram members, and over 5,400 Reddit subscribers. This is by no means a huge community, however comparatively to other projects, it stands out. Not only that, but it is growing on the daily.
Xtrabytes’ Potential in a Nutshell
Xtrabytes Proof of Signature (PoSIGN)/ Xtrabytes Website
It is built upon STATIC (Services Transactions and Trusted in Control) nodes that provide these better features. It is important to note that Xtrabytes is a licensed Limited Company registered in the Seychelles (in East Africa). This means they are a for-profit entity, as opposed to a charity/foundation like many other decentralized teams.
Currently, they are writing up a patent to secure their core technology. That has not been finalized or patented yet — if or when it does, confidence is said to come back to the team and price would probably follow. They aim to introduce this technology to several key industries including healthcare, logistics, property, banking, and most strongly — gaming. They expect the gaming to be one of their biggest growth areas. With the global gaming industry valued at almost $100 Billion US dollars, this is quite a large market Xtrabytes is trying to tap into. Even just 1% of that market share would net them a billion dollars, but even just 10% of that is $100 Million and that’s just one market they’re aiming for.
Xtrabytes market cap is currently valued at $70M and there is massive potential for growth. Coupling that with the fact that the team wants to secure the full set of STATIC nodes and bring down circulating supply to 100M coins in turn bringing down the market cap to around $17M and one can see why so many are excited about this coin’s potential.
Currently, XBY has several projects — called modules — in the works. Here, we explore the publicly known ones to get a better idea of what sort of expectations we can set for ourselves in terms of progress.
Most prominently, the team is developing the X-CHANGE — a decentralized cryptocurrency exchange that cuts out the middleman and lets traders transact straight with each other without a central authority.
CHANGE — One of Xtrabytes modules / Xtrabytes Website
They provide liquidity to the exchange through their STATIC network discussed earlier. This eliminates the single point of failure that persists in centralized systems, and it enhances the security of traders’ funds. Xtrabytes can support smart contract technology, much like Ethereum. Therefore, coins started on the XBY network will be able to be traded on the X-CHANGE after proper community vetting. In a similar way that NEO has GAS that is rewarded to network supporters, X-FUEL is an internal development token for the XTRABYTES platform. It provides a financial incentive for community members to help further the XTRABYTES project and can be exchanged for XTRABYTES.
This is the smart contract system that will run on the Xtrabytes platform. Like with Ethereum, developers can make Dapps and fund their projects through smart contracts on the XBY network. However, unlike Ethereum, XBY supports ALL kinds of programming languages. In addition, the XBY coin is going to be able to handle 10,000+ transactions per second, which scales much better than the current 20 per second for Ethereum.
As mentioned before, X-VAULT will be a decentralized cloud storage platform. It is in fact the backbone to all the other modules of the Xtrabytes platform.
X-VAULT — One of Xtrabytes modules / Xtrabytes Website
X-PAY which is a payment system the team is working on can have its transaction history stored in X-VAULT. The smart contract system (X-DEAL) will be encrypted on this module as well. X-CHANGE will have its data and transaction history stored here too. After all, a decentralized super computer like Xtrabytes aims to be cannot function without an equally powerful hard-drive like the X-VAULT.
More to Come
These are the main modules that are in development right now. More are sure to come, but the team do not want to get overwhelmed with too many projects at once, so these are their focus for now.
The Xtrabytes Roadmap/ Xtrabytes Website
Looking at things as they are right now — the XBY community and company have a big challenge ahead of them to patent their existing technology and future development. They are currently in contact with several experienced lawyers well versed in the technical field. This is a major potential milestone for the team. A spokesperson for XBY said that the completion of these patents is achievable “within a few months”. From gauging the community, it is apparent that this is a major point of discussion, and a hot topic amongst investors and XBY supporters. Once these patents are finalized then the team will be able to focus more on further developing the technology. That is not to say they are not working on it already, but it will be one less (major) thing to worry about.
Another challenge is getting the XBY coin on more exchanges. One obstacle is that the XBY platform will host an exchange of its own, and it’ll be viewed as competition by existing centralized exchanges. Therefore, they may not want to work with the team in integrating their coin into the exchange. Another issue is that the coin has a proprietary blockchain. It’s not an easy plug’n’trade like the ERC20 tokens on the Ethereum blockchain. It would require more work and communication from the teams of both the exchange and the XBY network.
Why Xtrabytes? / Xtrabytes Website
Current fundamental analysis points to XBY receiving a 4/5 Star review. The four stars are absolutely deserved for several key reasons:
⚬ There is active development on projects with real and huge use cases like X-VAULT, X-CHANGE and X-DEAL;
⚬ The community is positive, active in helping spread the word for XBY, and active in helping the development of the network;
⚬ It has STATIC nodes acting as masternodes that will attract rich passive income seeking investors. That in turn will reduce available supply further increasing the price per coin. In fact, in the XBY whitepaper it is stated that the company aims to reduce the circulating supply to about 100 Million after all the STATIC nodes are locked in. This would give it a current real valuation of $17M market cap which, for a project like Xtrabytes, is extremely undervalued;
⚬ It is a registered Limited Company with shareholders that will strive to make XBY a success. In addition, it will allow them to protect their technology through patents, making it nearly impossible for anybody to illegally copy their code and use it for themselves;
⚬ It has a proprietary blockchain technology and is an entire platform on which many modules can be built. It is not an ICO nor is it simply a fork of another chain with some quirks and clever marketing. This helps XBY offer immense improvement to the blockchain ecosystem including increased scalability, security, and transaction speed.
There are two main challenges that, once solved, will bring this rating to a 5-star:
⚬ The patents have not been finalized yet. Although the core team is working on this, it will take several months before all the documentation is in effect. This currently is the biggest focus for the team, and the biggest worry for investors. Once this is cleared out, the skies will be much clearer for XBY;
⚬ The XBY coin is only on Cryptopia and a few other small exchanges. If it ever hopes to get major traction, it should be traded on one of the big exchanges like Binance, Kucoin, Bittrex and the like. This is a harder challenge in my opinion to the patent one for the reasons I mentioned above.
Both take away half a star. However, as I said, they are temporary, albeit big, challenges and I personally have faith in the team that they will overcome them and move on to bigger and better challenges in the future. I have a big portion of my portfolio in Xtrabytes and I will keep it that way for a few years to come. This is not your regular altcoin. This is a serious team of people aiming to be top 10 and stay there — not based on fluff marketing, but on real use cases and high quality developed products.