(No author reward for this post.) There is a massive sell off underway of the cryptocurrency Verge (XVG) as I write this article. The much hyped partner announcement and crowdfunding was what seems to be a disappointment for most. If you haven't already seen the news the partner is Pornhub, one of the largest adult entertainment networks on the planet is the mystery partner. Stupid hype right? No!

Verge (XVG) Sell Off 

The fact that there was a crazy sell off of Verge (XVG)after the announcement shows that education from the general public and many investors is seriously lacking. This is important to keep in mind over the next 18 months as cryptocurrency becomes mainstream and draws in even more uneducated investors. These investors do not understand what utility and use cases will effect the price, instead base their speculations on technical analysis and whatever articles they can Google, which are generally heavily biased. We will see a massive rise in cryptocurrency market as a whole in the next 12 to 18 months. Most likely that rise will be an enormous bubble, which will see many things go parabolic, with extreme overpricing. It will be fueled by lack of education or understanding by both the media and the investors. It will come crashing down beyond what we have seen in the past few months. After that crash both the media and public will become more educated about the use cases and technology before the prices begin to recover. 

Wrong focus - Verge (XVG) partner

As the sell off and social media comments show the focus is on who the partner is, which is in my opinion stupid. I am not sure if people legitimately bought into the speculation of a company like Amazon being the partner, but clearly the expectation by many was unrealistic. Keep in mind that there are very few deployments of cryptocurrency where it is actively used in a way that could fuel adoption to attain critical mass. There is also very little stickiness in the cryptocurrency world as many projects are not at a stage where large masses of people find it beneficial to utilize a specific cryptocurrency over another one. For example, Bosch recently announced that they were heavily vested in IOTA and see the future of using their technology for great things. This kind of news is great, but what specifically is it being used for in the near future? What is forcing the public or some other group to purchase and utilize IOTA? Nothing for the near future that I am aware of. Partnerships with Microsoft or other well known giants exist, but I still do not see anything with those announcements which would fuel adoption. 

Correct focus - Mass adoption of Verge (XVG)

Is there a problem that the use case is solving? How big is the problem being solved? Do they have a plan or technology ready to solve the problem? What is the threat of competitors coming into the space? Etc. 

The same questions an normal Silicon Valley angel might ask a tech startup would be sufficient. Even with little understanding of cryptocurrency the answers to these questions would be a much stronger indicator than merely the name of who the partner is. 

What problem does the use of Verge (XVG) solve for PornHub? 

Generally, speaking anything sex related is not something that people want publicly broadcasted. For example, a person gets a phone call from Chase fraud prevention with the Chase representative asking "Sir, did you make a $9.99 purchase today for PornHub?" A spouse hiding the transaction from their significant other, a college kid who lives with his parents, and the list goes on and on. 

Does Verge (XVG) have a solution or working product that solves the problem? 

Yes, their current product which is already in use easily solves the problem. It is just integration, marketing, and reducing friction for purchasing and storing Verge (XVG) that will be needed. 

How big is the problem that Verge (XVG) is solving or what is the size of the market?

 I do not know the value of PornHub as a company, but it is certainly in the billions. It is also international with a very large user base. There is also a very large portion of the user base which is monetized through advertisements who do not pay. I think the problem being solved is an enormous one that spans almost all cultures. Stop and think about that for a moment. 

What is the threat of other competitors coming into the space?

Now this is a legitimate concern and problem that will need to be addressed. Pornhub has not said this is exclusive or Verge (XVG) is the only cryptocurrency that will be accepted. Only that its being added as an option. It does leave the door open for PornHub creating their own cryptocurrency down the road or adding other coins such as Monero, ZCash, BTCP, etc. 

Potential for future Verge (XVG) adoption

The potential for future Verge (XVG) adoption is immense. They have significantly reduced their customer acquisition cost without a doubt. The power to scale and obtain significant market share is clearly there. I don't think there is honestly an easy way to even measure this beyond a scientific wild ass guess. Most people don't seem to comprehend how uncharted the announcement is. It could potentially be a historic one that is referenced as the catalyst that started to bring cryptocurrency into the mainstream. 

What if Verge (XVG) manages to capitalize and work out a deal so that you don't need an email address in the future to register for a PornHub account? Instead they can have all communications occur through the secure messenger. Secure messaging is something that just about every cryptocurrency can do also. 

What if Verge (XVG) manages to integrate single sign on (SSO) capability so that passwords are not needed? This is possible with any cryptocurrency, but I have yet to see a deployment of it. 

What if Verge (XVG) manages to eliminate the need for usernames or store preferences or metadata securely on the blockchain? Another solution which any cryptocurrency can solve, but doesn't really exist on a wide scale. Why is this important? Think about how consumers behave. They will buy something from you, leave then come back. When they come back they will want you to know every piece of data about them, but the moment the friction is introduced of them having to redo something they previously did decreases your ability to convert them back into a customer significantly. If someone pays for 1 month of access to the site, then leaves. A few months later they consider coming back to the website, but now have to start over, creating new favorites, etc. If all that was needed is a signature for PornHub to produce a new account from small snippits of data being stored on the blockchain about the user, it would easily be able to bring the account back to life instantly. This use case is not limited to the adult industry, but is a very real world problem companies face everyday. 

All of the above use cases are not unique to Verge (VXG), but they would be the first to market using cryptocurrency and thus giving them the power to build on their use case. What other cryptocurrency has a partnership with potential for such large scale adoption? None that I can name. Porn may not be the thing that everyone in the crypto community wanted launching the technology to the world, but it might be the most promising option. 

For example, if a company announced a partnership with Microsoft or another large company like Bosch. Would that partnership be more valuable than a partner like PornHub which can be launched immediately? In my opinion this is a lot bigger than most people realize. 

That being said, Verge (XVG) may have the disadvantage of being first to market with solutions that other cryptocurrencies possess. They could end up as the cryptocurrency that breaks the wall down, but gets passed up by the vast amount of other privacy coins out there. Verge (XVG) has a lot of work to do and if they accomplish everything they want they will have a lot of fending off to do. The project will not have a moment to rest if they obtain wide scale adoption. They will have to pump out innovation in their sleep to fend off other privacy coins. 

Partnering with a company that is ranked as the 32nd most visited website in the world is not to be taken lightly. While this is not a guaranty for the success of Verge (XVG), it is a major win for the cryptocurrency community as a whole in achieving wide scale adoption. Without a doubt Verge has done something great, but we will have to see if they can capitalize on it. 

Disclaimer: This is not meant to be investment advise and you should consult a professional before investing. I also have holdings in cryptocurrencies including Verge (XVG). 

SHARE THIS ARTICLE: https://bit.ly/2J60mAd

Share on Facebook

Share on Twitter 

Share on Google+

Share on LinkedIn

Wired Article: https://www.wired.com/story/pornhub-verge-cryptocurrency/

I know it has been a while since my last post, but I have been very busy with work. Should be back on a regular basis in a month or so. Until then the posts will be sporadic.