Hi everyone!The purpose of this post is to present the crypto community with a compelling vision of the potential growth curve of one cryptocurrency-based project: Opacity (for a basic overview of the project, click the YouTube link). I'll put the token supply into context relative to potential future growth, and outline a possible timeline for developments in token usage and value.For those who are unfamiliar with the project, the basic concept is that it will be the first zero-knowledge, totally anonymous and unhackable (based on client-side encryption and chunking of files) cloud data storage provider. Each OPQ token buys 64GB of data for 1 year; with initial plans being offered at 128GB (2 OPQ).The project is going to enter beta testing this coming week. The general release should occur within a month, if all goes well.*Before going further, a disclaimer: while not an Opacity team member, I'm a significant holder of the token, an active community member and upcoming beta tester. I'd also like to say that all projections and assumptions below are my own.Phase 1 (Initial Adoption, Months 1 - 4, zero - 10,000 users):In the first period, the project will focus on building awareness and onboarding early adopters. In this time, the project will be operating at a loss as the price (5 cents at the time of writing) catches up with the cost of storage to the project (something on the range of $1/OPQ, depending on average capacity usage rates), and the earliest users effectively get a subsidy for joining. That's totally expected, and not unusual for many startups as they're getting adoption.My understanding is that the early goal will be to get something like 10,000 users within the first few months. That would be amazing. Generally, from what I've seen, a month-over-month rate of increase for an app-based startup of greater than 50% gets people excited, so if we start with a community plus first adopters of at least 1000 by end of June (Month 1), getting to 10k by end of summer would represent VERY solid growth. Personally, I'd be very satisfied with half that many users by then.During this phase, the expectation is that the working product and increasing user base will drive new attention and value to the project, so while the dev team would be paying for storage at a loss, the increase in value to the dev fund would more than make up for it: currently, a ~5% increase in token value would pay for 10k user accounts. The actual token expenditure of 20k OPQ would not significantly impact the token price, but a healthy growth in the user base will bring outside money into the project as people see the potential for further growth and utility.Phase 2 (Product Maturation, Months 5 - 12, 10,000 - 100,000 users):In the second phase of the project, we'd witness price rising consistently, both to catch up with market rates for cloud storage and in response to improvements over time in the product. As price rises, the team would be increasingly able to offer larger plans based on diminishing losses per OPQ and having a dev fund increasing rapidly in value. Individual users like myself will regularly seek out 1TB plans, and some will want 10TB+.If the average is 1TB (early polls suggest that this is reasonable) and user acquisition keeps up at a pace of 50%/month through the first year, then by summer 2020 we'd end up with over 1M OPQ being spent per year through users of the platform, based on about 100k users spending over 10 OPQ each. That's already enough to prop up the price as some major holders exit the project and other new ones join, attracted by seeing a growing product with rapidly diminishing risk.Phase 3 (Market Stability, Months 13-24, 100,000 - 1M users):In the third phase, the product would be nearing full maturation in terms of features and market acceptance. The addition of business accounts and continued growth in individual users would presumably change the market dynamics significantly. The way OPQ works, the tokens that are paid for storage are effectively going to be locked for up to 1 year as the contract for storage pays out. On average, we'll estimate that they're locked for 6 months. That means that, with the current peg, a population of 1M users globally (which even with a drop in growth rate to 20% after the first 12 months should be achievable by summer 2021), combined with equivalent potential usage from businesses, would need to spend over 20 million OPQ, or about 10% of the {circulating supply times two for the rate at which the token gets recirculated into the market}.If 10% of the supply is getting actively spent on storage, then it is to be assumed that the token value is being driven primarily at that point by the stable market rate for the services offered. For reference, Mega, one of Opacity's nearest competitors, offers a 4TB plan for $30/month; such storage prices amount to about $5.76 per OPQ.Phase 4 (Full Maturity, Months 25 onward, 1M+ users):Once we get to 10's of millions of OPQ being spent on storage, we'd be looking at needing to decentralize and set a floating peg to allow for enough storage to enter the Opacity market to keep up with demand. The concept is that the peg would rise as demand continues to increase, until the potential market is satisfied. If we assume that the potential market is as much as 1% of all cloud storage, that would represent over 10 million individual accounts and in the range of 500 million TB of stored data by_2022 (based on 175 zettabytes of total data by 2025). To supply even 100 million TB of storage, the peg would have to be increased to at least 100e9/(2*130e6) = 384 GB, and more likely something closer to 1TB, representing x15 growth in the peg, and presumably similar growth in token value.Meanwhile, it seems very likely that there would be a role for token staking in the future decentralized system, as an increasing peg over time and unused paid-for storage capacity would lead to potentially significant amounts of OPQ coming in to the system that don't get paid out to storage providers. This would both present an additional ongoing revenue stream for long-term token holders and would further restrict token supply, pushing up the peg and the token value even more.BOTTOM LINE: I'm speaking as an individual token holder, but to me the timeline laid out above represents a fairly compelling vision for how OPQ might grow and eventually build value over time. The numbers above, which would culminate with Opacity having something upwards of 1 million global users consuming 2 million TB of Opacity storage by 2022, are ambitious but not entirely unrealistic, and they represent potential goals, not hard and fast necessary targets.Putting usage numbers into context, Mega currently has ~100 million accounts. Dropbox has about 500 million. A wildly successful vision of the future might involve 10 million+ global users within a few years, rather than 1 million. I've played a little bit in the startup game, and from what I've experienced, this is how many startups are expected to approach the future when they're about to release a new product and they're speaking to potential VCs who are looking to get involved at valuations of $5 million+. Massive adoption is far from guaranteed, but with a success case of x100+ increase in token value (x1000 is very possible if the peg increases significantly as described above), the rewards are worth the risks. The long-term vision for the project's potential is there; the rest just comes down to delivery and the market.Thanks for reading this far; best of luck to all of you in the coming bull market!
Submitted May 19, 2019 at 08:26AM
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