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The eCash Opportunity

In this article, I’d like to share some of my reasoning for investing in eCash. I’m not talking about charts or price targets, just an honest assessment of the project from the perspective of a fellow investor. I will try my best to be as objective as possible, and I promise that everything I write will be what I truly believe.

And remember, this isn’t financial advice, do your own research, and only invest as much as you can afford to lose.

The Problem. If you think of eCash as a product, you must ask yourself what is the problem it’s trying to solve? Another way of looking at it would be to ask what is the overall size of the market that eCash is hoping to capture. For example, when investing in Apple you’d probably want to know what’s the size of the total smartphone market. For Facebook it would be the overall online advertising market. With eCash, we’re not just talking about capturing a piece of any market, it’s about being the market itself, the money that the market runs on, which happens to be the size of all the other markets combined. The way I see it, if a cryptocurrency project manages to capture any significant portion of the market for the world’s money, it will automatically be one of the most valuable projects in the world. But of course creating a new monetary system comes with its own unique set of challenges. This isn’t like creating a new smartphone or launching a new social network. Challenging state-backed currencies comes with risks such as government resistance, competition from central bank digital currencies, not to mention all the other cryptocurrencies that are also attempting to be the money of the future. Whether or not eCash has what it takes to survive and beat out the competition remains to be seen, but at least I know that the reward it is playing for is as big as they come.

The Plan. Of course when you are working on solving a problem as big as fixing money, what you need is to have a good plan. You wouldn’t set out to climb Mt. Everest without a proper plan, or a roadmap, would you? Luckily, eCash has what I believe to be one of the best roadmaps in all of crypto. The XEC strategy is to tackle both scaling and usability using the best methods available. In terms of scaling, the eCash protocol developers are building on the battle-tested UTXO model of Bitcoin, which is much easier to scale compared to using an account based system like Ethereum. As for usability, the upcoming integration of Avalanche will give eCash properties that no other Bitcoin fork can claim. Users will benefit from additional features such as 51% attack prevention and instant transaction finality. With that said, it’s all about the execution. I would be being dishonest if I didn’t acknowledge that the plan has taken longer than anticipated. But it’s also true that what’s being worked on has never been done before. They are iterating in real time to make sure nothing goes wrong, and getting it right is as important as getting it done before it’s too late.

The Team. The eCash project is led by a team of developers known as Bitcoin ABC. This is the same team that launched the first successful hardfork of Bitcoin when they created Bitcoin Cash in 2017. They served as the lead development team for BCH for three years and are some of the most experienced and knowledgeable Bitcoin developers in the world. Based on my observations, the members of Bitcoin ABC are like a team of founders with high integrity who I’m confident won’t give up easily. Over the past year I’ve also seen that the number of contributors has been growing slowly but surely. With that said, Bitcoin ABC is still a relatively small team, but they have grown over the past year and have added more people to work on the protocol, as well as critical infrastructure, business development and marketing. Though their organization is lean, it also means they can remain nimble and have no time to relax. They have to be hungry to succeed and have every incentive to do so as a result of the 26 billion XEC that they earn each year to continue developing the chain.

The Technology. I touched on this a little when discussing the eCash roadmap above, but I truly believe that the combination of Avalanche and Nakamoto consensus will be a revolutionary moment in Bitcoin’s history. The move to a hybrid Proof of Work/Proof of Stake system will open up all kinds of new opportunities not available to any other Bitcoin fork. Staking rewards has the potential to attract a whole new audience of crypto investors while also giving less coins to miners who must regularly sell their mined XEC to pay for electricity and hardware costs. Since staking doesn’t have the same energy requirements, the coins generated by validators will be less likely to be sold on exchanges. Less mining will also mean the eCash network will be much less harmful to the environment. I literally see no downside to the technology eCash is trying to build, and if successful, they will have created the best version of peer-to-peer electronic cash the world has ever known. The question is, will the rest of the world care about about economic freedom and censorship resistance, or are people only interested in NFTs and dog coins?

The Ecosystem. This is perhaps the area of eCash I believe has the most room for improvement. At present there are still several major exchanges that have yet to list XEC, including none of the major US exchanges. XEC is also not supported by service providers like Bitpay or Trust Wallet, and there are virtually no places that currently accept eCash as payment. What eCash does have going for it is a growing community of passionate holders from around the world. Another thing XEC has going for it is that because it’s a fork of Bitcoin, any company that already supports BTC or BCH will find it easy to enable XEC support. For a coin that officially launched less than 8 months ago, I think eCash has already come a long way, and the longer it lasts, the greater its chances of success. Objectively speaking, if I was someone looking for a new cryptocurrency project to invest in, I would see XEC as an opportunity to get in on something that is still flying under the radar but with a huge potential upside. As a wise man once told me, the way to make money is by seeing the value in something before everyone else does. When it becomes obvious to everybody, that means you’re too late.