EOS Token, what exactly is it? and should you invest in this token?

in #eos7 years ago (edited)

EOS

There are many other posts related to EOS token which discusses, what is EOS token and what exactly are you buying? Here, I am taking a simple investor approach to ask the same question. 

As an investor, what one looks for is Return on Investment. What return will I be getting from my initial investment? Is this investment going to benefit me in short term or long term?

Before we get into speculation part of whether this coin or the EOS platform will skyrocket or not, let us look at the terms and conditions of EOS token's purchase agreement. Here is the excerpt from this T&C.

"EOS TOKENS HAVE NO RIGHTS, USES OR ATTRIBUTES. The EOS Tokens do not have any rights, uses, purpose, attributes, functionalities or features, express or implied, including, without limitation, any uses, purpose, attributes, functionalities or features on the EOS Platform. Company does not guarantee and is not representing in any way to Buyer that the EOS Tokens have any rights, uses, purpose, attributes, functionalities or features."

As stated above by EOS, these tokens have no rights or use within EOS platform and are ERC20 Ethereum blockchain token which are bound by smart contract for this purchase agreement. These tokens does not represent the equal sum of new Cryptographic tokens and is further clarified by below point.

"NOT A PURCHASE OF EOS PLATFORM TOKENS. EOS Tokens purchased under this Agreement are not tokens on the EOS Platform. Buyer acknowledges, understands and agrees that Buyer should not expect and there is no guarantee or representation made by Company that Buyer will receive any other product, service, rights, attributes, functionalities, features or assets of any kind whatsoever, including, without limitation, any cryptographic tokens or digital assets now or in the future whether through receipt, exchange, conversion, redemption or otherwise."

This means that these tokens represent no value in its own and has no use cases in EOS platform. However, EOS does advises the buyer of these tokens to register their Ethereum address with EOS public key in order to be included in snapshot that will be created at the end of the token distribution. If a third party does launch EOS platform form this snapshot, a token holder of EOS tokens will also have token balance in new blockchain.

These new CRYPTOGRAPHIC TOKENS will have value as stated in EOS whitepaper by allowing token holder to use percentage of blockchain capacity, one can also allow it to be loaned to others for use. There are further points within EOS whitepaper that points out the uses cases of these tokens.

"Block producers publish their available capacity for bandwidth, computation, and state. The EOS.IO software allows each account to consume a percentage of the available capacity proportional to the amount of tokens held in a 3-day staking contract. For example, if a blockchain based on the EOS.IO software is launched and if an account holds 1% of the total tokens distributable pursuant to that blockchain, then that account has the potential to utilize 1% of the state storage capacity."

Going back to the question of, should you invest in this token?

  1. EOS Tokens are ERC20 Ethereum tokens on Ethereum blockchain.
  2. EOS Tokens do not have any use cases nor represents any value.
  3. 1,000,000,000  EOS tokens will be distributed and will become frozen (non transferable) at the end of this distribution on Ethereum blockchain.
  4. There is a possibility that if a new blockchain is created using EOS platform (and same snapshot), registered token holder of EOS tokens will also have new Cryptographic Tokens.

As it is, these tokens have no value and will become non-transferable at the end of the distribution forcing you to retain them forever. I do expect the price of these tokens to go higher closer to distribution closure (June 1, 2018 22:59:59 UTC).

There are two ways you can get your ROI from these tokens;

  1. Buy EOS Tokens now and sell them closer to distribution closure with the speculation the price of these tokens will be higher as one would want to purchase and have it registered for the new blockchain.
  2. Buy EOS Tokens now and sell/stake/loan in new blockchain.

That being said the roadmap puts the above point 2's timeline somewhere in Summer / Fall 2018, possibly even further in future as a third party still needs to launch the new blockchain.

There is a short term investment opportunity of 6 months from now for point 1, and there is a longterm investment opportunity of up to 2 years for point 2.

Personally, I did purchase these tokens and have sold 75% of my holdings to invest in Bitcoin and will be holding the remaining 25% of my holdings for longterm investment of point 2. 

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If you want to keep EOS tokens like office space for rent by awesome EOS dApp developers, you should hold onto 100% of your EOS tokens, and register them on https://eos.io/distribution (make sure you have the MetaMask Chrome plug-in installed to access your Ethereum wallet).

Sell your stake now for short-term gains or rent it out in a booming digital real estate market?

I think EOS will bring in a lot more rewards over time as a leasing mechanism than it would as a one-off sale.

I completely agree, EOS when is launched could really bring a new game to the blockchain technology and the leasing mechanism could really make you lot of money.

Hi
I bought EOS after reading your post and sold it yesterday with a good profit.
Thanks for your post.
Any other thing you think of looking at the current market?

You are welcome.

I am currently on holidays and haven’t had a chance to study any other coins.

Hope to reserch some other coins when I get some time.

Ohk.
Please let me know i hv another 5k to invest.
Tx

Buy nxt and ardor, sell it before 28th December.

I hv bought nxt today in dips n hoping to get some up ride

Should i still keep nxt or sell it?

Also anything else you would recommend?
How about XVG/Funfair or Sia. Or Cardano?

Right now the whole market is slow due to BTC correction.

NXT didn’t get enough pump as it would have if the market was ok. I say hold it and sell it on 27th at the price where you are making profit.

XVG/Funfair/Sia/Cardano had huge rise recently, not a good time to buy. In fact in current BTC correction, we won’t get any short time profit. Only buy the coins which you plan to hold it for long term.

Also i hear about something bitcoin fork is happenng tomorrow. Not sure if it is true or not but do you have any idea or any idea about the price range good to get in?

I wouldn’t worry about btc forks. Someone always forks BTC or creates a new coin on BTC Blockchain.

Most cases if you hold BTC you will get the forked coin as well.

If you are asking for entry buy for BTC, I think BTC will hit another correction soon. Lot of people are waiting on $20K price point to get out and that will cause another correction and I think price could hit $13 - $14K.