Lisk | Detailed platform review with SWOT analysis

What is Lisk?

Lisk is a unique blockchain ecosystem for decentralised applications that has been in development since May 2016. Lisk uses Javascript as its programming language, with each DApp having its own ‘side chain’ linked to the main Blockchain, allowing scalability and flexibilty. Much like Ethereum, this will allow DApps to create their own cryptocurrencies, analogous to ERC20 tokens.

Lisk will operate on a public blockchain, much like Bitcoin, Ethereum, Litecoin and others, with block explorers allowing anyone to view transactions and other information occurring on the network.

Lisk will use delegated proof of stake as its consensus mechanism, essentially allowing holders of the tokens to become active delegates, who are rewarded in the Lisk token for confirming blocks.

The Lisk token can be classed as a utility or functional token. Its primary purpose is not to be used as a cryptocurrency, but as a mechanism or access token for developers to access and use the Lisk ecosystem.

By using the Javascript programming language rather than developing their own, this opens up Lisk to the millions of Java developers around the world.

Strengths;

• Lisk is an ecosystem, where the strength of the platform will grow over time as more DApps are built on it
• Lisks unique blockchain architecture allows developers to fully customize their own blockchains or ‘sidechains’, unlike Ethereum where DApps must use Ethereum
• This unique architecture will allow Lisk to be scalable in the future as more DApps are built on it.
• The platform has been in development for nearly 2 years, which is a long time in cryptocurrencies
• By using Javascript as its programming language, this allows millions of experienced Javascript developers around the world to quickly work and use the Lisk Software development kit.
• Lisks Delegated Proof of Stake consensus mechanism, which is a low energy and low resource method of confirming transactions, unlike the more traditional Proof of Work that Bitcoin and Ethereum use.
• Lisk uses a Schnorr signature-based scheme, which is said to allow faster, more secure transactions, potentially allowing up to hundreds of thousands of transactions per second.
• The Lisk Nano wallet is simple, clean and easy to use. When transferring LSK, it took approximately 1-2 minutes to arrive, which is very fast.
• Lisk runs on a permissionless public blockchain, allowing anyone in the world to view transactions on the Lisk network at any time.
• Lisk has a strong team of 28 staff, many of which are developers, engineers and strategists. The team has country ambassadors ready to help promote Lisk in foreign countries, another big positive.
• The lisk team have been transparent with issues encountered during the beta stage, with blog posts fully communicating issues
• Extremely strong community of 177K Twitter followers and 23K on Reddit, with the general sentiment being very positive
• The Lisk tokens are currently 115.6M, which is low for compared with other DApp ecosystems. The supply of tokens will increase over time via block rewards following a linearly decreasing scale over the lifetime of the network, providing an economic incentive for participants to operate a node.
• The block reward is 5 LSK, and will decrease by 1 LSK every 3 million blocks, which is about 1 year, and equates to around a 15.7% inflation rate for the first year. Node operators will also get a share of the transaction fees.
• Lisk is open source, meaning anyone in the world can view the source code, critique it and suggest development improvements
• Lisk has had a Github account since February 2016, with regular commits from a number of developers
• The tokens are also a requirement to be used by developers wishing to build DApps on the platform and for transaction fees, giving a reasonable expectation of token appreciation over time as the Lisk ecosystem grows
• The team has been focused on developing the platform before starting major marketing, with a major re-brand scheduled for the 20th of February.

Weaknesses;

• Slower to the market with a working product when compared to other DApp ecosystems like Ethereum or NEO
• After 2 years of development, a software development kit is still not available, so third party DApps cannot be built yet
• There has been some community and investor issues with the release of the SDK being pushed out several times, as it was due for release in 2017.
• The fees when sending LSK seem to be fixed at 0.1 LSK. At current market rates, this is around $2.60, which isn’t all that cheap.

Opportunities;

• Lisk has the opportunity to penetrate the DApp ecosystem market by leveraging its Javascript programming language, and the side chain feature, in addition to the delegated proof of stake consensus mechamism
• Lisk has the opportunity to become of the top tier DApp ecosystems, giving a high probability for token appreciation to investors over time

Threats

• Given an SDK isn’t yet available, there is the threat that investor and community confidence may fall if deliverables are pushed back further
• DApp ecosystems like NEO, which also offer application development in Java, outcompete Lisk as an ecosystem
• Given Lisk is a newer blockchain model using unique side chain technology, there is the threat a system error may occur, potentially disrupting the network
• The combination of NEO, Ethereum, EOS, Cardano and IOTA outcompete Lisk for market share.

Links to all sources;

https://www.eventbrite.com/e/lisk-relaunch-registration-41656803621
https://www.reddit.com/r/Lisk/
https://coinmarketcap.com/currencies/lisk/#social
https://twitter.com/LiskHQ
https://www.reddit.com/r/Lisk/comments/709o0b/welcome_to_lisk_a_guide_to_get_started/
https://www.reddit.com/r/Lisk/comments/78m246/why_should_people_invest_in_lisk/
https://blog.lisk.io/being-open-source-eabf1e89d7af
https://github.com/LiskHQ/lisk/commits/development
https://www.reddit.com/r/Lisk/comments/6jrkm1/did_you_know_that_lisk_uses_schnorr/
https://docs.lisk.io/docs/the-lisk-protocol-transactions
https://docs.lisk.io/docs
https://docs.lisk.io/docs/the-lisk-protocol-appendix
https://blog.lisk.io/why-the-blockchain-halted-on-may-29th-72da7c4f7d69
https://blog.lisk.io/explaining-lisk-forging-rewards-53d295066be2
https://factschronicle.com/lisk-what-is-its-future-how-safe-this-cryptocurrency-is-7431.html
https://www.reddit.com/r/Lisk/comments/7iebfe/lisk_core_10_lisky_10_lisk_js_10_till_31122017/dqyb2xs/
https://docs.lisk.io/v1.4/docs/the-lisk-protocol-network-rewards
https://github.com/LiskHQ/lisk/projects/32

Hope you enjoyed the review.

Beau