Hot crypto of 2018? The Raiden Network

In a rising-tide market, always be looking into the FUTURE, not the past. 2018 isn't 2017, and the cryptos which do well in 2018 won't be the ones you know and love. How do we know this? We are students of history. The most recent example is the dotcom bubble. Most is forgotten about that bubble, in fact, our collective memories have centered on "FANG" from that era, and what's slowly fading from memory banks is all the stuff which rose hundreds of percent in mere months, days, hours during the crazy time between Fall 1998 when eBay went public, and early Spring 2000 when low quality dotcom stocks were already beginning to go bankrupt and all attention was on the newest players. "B2B" was one of the last themes of the dotcom bubble, and frankly not much came of it if you gauge by the hundreds of billions of market caps of those sector-within-a-sector stocks in December 1999. And FANG? Amazon bottomed in 2001, google wasn't a stock until 2004 but it's search predecessor Yahoo bottomed in 2001-2002, Netflix was still pushing DVD mailers, and Facebook wasn't a glint in Daddy's eye. Even FANG's history of greatness, back then, was in the future. So how do we inform ourselves in 2018? How do we find the FANG cryptos of 2030 instead of dying on the vine in modern equivalent of Pets.com? Answer: Follow the herd as it moves and reacts by GETTING IN the herd, seeing the problems first-hand, and then anticipating the solutions! What were the problems of 2017?

#1 Frozen funds in exchanges
#2 Cumbersome mining-fees
#3 A slight lack of privacy, in a sector boasting its privacy features!
#4 Many promises, but lack of products-- namely Apps-- namely KILLER Apps.

2017 was about crypto for cryptocurrency's sake. But as Bruce Springsteen would parrot... "What is it GOOD for?"

We won't attempt to answer ALL of the problems listed above, but will let the questions and problems of 2017 guide our research. Today, it leads us to want to know more about the recently hot RaidenNetwork, whose ERC-20 token is called RDN (awful name). 100 million will be created ultimately, with 50% auctioned-off to the public via an auction (finished Nov 1, 2017) which finished at a current price in dollars of $2.70 (RDN trades today around $7.00), and 16% used for development, and 34% retained by the Raiden project lead(ers). Ok, so RaidenNetwork is already worth $700 million in total, but what IS it? Well, actually IT... isn't... anything... YET-- but will be? The proper question is: What WILL it be?

Problem: Imagine you want to spend some bitcoin buying a pair of used jeans online. The proprietor accepts bitcoin, and the item costs about $10 in bitcoin. The problem is, the MINING FEES charged by bitcoin miners for processing this transaction are bordering on ludicrous, like $10-50 per transaction depending on the day. So what if the buyer had to put up $60 in bitcoin to buy a $10 pair of jeans? Insane. Not going to happen. Bitcoin should solve this problem, yes? No. Bitcoin is run by a committee of voters, and MOST of those voters are large miners who like their fees bc it covers the cost of mining new bitcoins which is very electricity-cost expensive. So the solution will likely need to come from "off chain" or outside the rules of the bitcoin blockchain. Since Ether's price rise is causing some of the same problems as bitcoin is having, the Raiden Network proposes to move TRANSACTIONS of ETC-20 tokens OFF the blockchain, thus are not subject to the mining fees. In fact, you could create an entire EXCHANGE on this concept. Have you ever had your exchange tell you they are down, can't trade, can't move your money in/out? Of course you have, these problems can arise for many reasons (some reasons could be very DARK reasons!) but the #1 cause is high mining fees vs low transaction amounts. The bitcoin system moves smaller transactions paying small mining fees to the back of the processing que, and sometimes it takes on the order of weeks not seconds to process a simple transaction. Is moving off-chain safe, isn't crypto's claim to fame fast secure transactions. YES! Yes it makes no sense the Raiden Network would even need to exist, but yet it now DOES need to exist bc the nature of cryptocurrencies is they are VERY hard to change their nature once they are set into motion. Bitcoin was set into motion in 2009, well before most of these problems were considered. When Satoshi Nakamoto released his bitcoin and it was effectively trading for about a dime ($0.10) per bitcoin, it MIGHT have been hard for early bitcoiners to imagine a $15,000 bitcoin price and what problems that might bring.

So what is the Raiden Network building?
A system which can process hundreds of thousands of transactions per second, instead of the TEN transactions per minute Ethereum is good/fast at processing. They wish to make transactions of crypto faster and with lower fees. So how do they want to do it? Raiden team plans on building a network which combines multiple payments into a NET CHANGE, and ONLY booking the NET CHANGE on that crypto's (so Ether for example) blockchain ledger (remember, blockchain is a system of accounts, keeping track of who owns what tokens/coins). Is this safe? Hmmmm, probably not. But obviously Raiden Team will want to claim it's just as safe, and therefore will need to build their system into an algo which does the processing "off-chain" in a de-centralized manner which cannot be tampered.

While we may think their solution has risks of security danger, we're not expert enough to say what the flaws might be. If it works, people WILL adopt is, exchanges will adopt it, namely to save customers from the massive mining fees and/or wait times currently associated with crypto-transactions (Come'on, you KNOW you've been frustrated if you've ever tried to move this stuff around, between wallets, exchanges, etc...).

Is it a bit early for Raiden's RDN to be trading for a valuation of $700mm if it hasn't even released a product yet? WELCOME TO CRYPTOCURRENCIES! This method of releasing a crowd-funded ICO token before the product is built, is now INDUSTRY STANDARD. Don't like it? Don't participate.

Raiden Network lists use-cases, but they are pretty much EVERYTHING.
Retail: buy some old jeans? use RDNs instead of Ethereum or bitcoin
Wagers: pay off a buddy for a football bet? use RDNs
Pay to read an article on Steemit someday when they add subscriptions? use RDNs
Trade Ether for Gnosis? use RDNs

Will this new off-blockchain system work? how would anyone know that, there's no product yet!

If it works will it solve the problem? You betcha, say goodbye to two-week wait times to see if your sale of bitcoin for US dollars worked out as planned, and get access to those dollars. Say hello to being able to pay for something in person at a checkout register (if you pay in bitcoin at your local coffee shop, you could wait a week before the transaction is confirmed-- a week makes for some cold coffee).

Do we recommend getting involved? That's a trick question. In the current go-go times, anything that SOUNDS like a good solution (TRON) is VIEWED as a good solution and valued as such-- no proof required. Ironic isn't it? Because the crypto-transactions require PROOF every time. So what are the possibilities with Raiden Network now that everone is firmly asleep reading this?

How HIGH can RDNs go? Know who else would like to solve 2017's crypto-problems? 0x. They trade for $2 billion right now. Know who else thinks he has a handle on solving all the transactional problems with crypto? Charles Lee of Litecoin-- the Litecoin which is now at a market cap of $13 billion. RDNs trade for $7 and to reach Litecoin's status they'd need to trade for $130 per RDN, or 1,700% higher!

How LOW can RDNs go? Let's not answer that long term, as RDNs don't advertise paying a dividend or paying out Raiden Network transaction fees as interest to RDN owners. RDNs seem to promise ONLY that use of RDNs MIGHT make the price of RDNs go up since there's a limited supply, and if everyone adopts Raiden Network in the future there'd be quite a shortage of them unless the price goes up. We get dizzy thinking about this long term, but the answer is that RDNs could easily go to zero if the system isn't adopted, and the system doesn't exist right now, so....
Perhaps a better question is, where can RDNs go in the SHORT TERM, assuming cryptocurrency valuations stay roughly where they are now? Again, we must look for comparisons. How about Dogecoin, wasn't that always set up to elicit zero fees and trade like water? Sure, yeah (it was really set up as a learning experience in crypto, but whatever), Dogecoin trades for about $2 BILLION recently, and is now down to about $1.3 billion. Wait, so if RDN's risk is $1.3 billion, doesn't that mean it should go UP, so how can that be a risk? Eh hem, welcome to cryptocurrencies! Ok, but seriously, you know what ELSE will likely have low transaction fees bc it was set up on the much cheaper Proof-of-Stake system which doesn't require lots of electricity to mine? Peercoin! Peercoin is like your grandma's crypto, it's been around the block a few times. Like Litecoin, it's one of the earliest cryptos, call it "wave 2" crypto if we're currently in 'wave 3' crypto (like Ether) or maybe even 'wave 4' crypto (like RDNs). Peercoin currently trades for the low low prices of just $140 MILLION. Peercoin is pretty much considered "old hat" by this point; ie, no longer exciting. If RDN becomes like peercoin in a year or two, it would drop to Peercoin's valuation, or $1.40 per token. Bummer, that would be an 80% loss from today. We won't even bum everyone out with what happens to RDN if Peercoin itself trades lower.

CONCLUSION: RDNs might be the savior of all the problems with transacting Ethereum in the future, especially if they can get their system built quickly to be the first to take advantage of the problem. Since that's a rather large unknown, we'll just safely say Raiden Network is an altcoin not a poopcoin. For us, altcoin means RDN could go up very significantly in price if it catches the right wave of hype and news-play. It's certainly on the right track attacking the problems at hand. Whenever you see the new 2018 buzzword "Atomic Trades" Raiden Network will be there to catch some of those headline vapors, and frankly, that's sorta what you want in a crypto-speculation.

By the way, what does the founder of Ethereum think about Raiden Network fixing his transaction problems?
Ethereum's Vitalik Buterin doesn't like RDN. Instead of giving this "solution" a stamp of approval, he's instead chosen to forsake it and attempt to FIX his Ethereum via what he calls "2nd layer infrastructure". Sounds to us like ol' Vitaly is SOUR GRAPES. Why? Well, he doesn't like that the founders of RDN token are taking that 36% stake, he thinks everyone should help make Ethereum better for free, or something like that. That's nice Vitaly, but we remember a certain parable of the rich man a certain old Sea of Galille Shaman liked to tell his followers, which involved the "Rich Man" gaining the gates of heaven via giving up all his earthly belongings. Has Buterin done this, given away all his Ethereum and/or development money? This is hard to answer, but Buterin SEEMS to be trying to tell us this. Whether Buterin is a saint or not, is out of the realm of this analysis, but what IS in the realm of our analysis is that changes to already-established cryptocurrencies are HARD TO COME-BY. Why? Because it requires votes, and votes are hard to come by in a cryptomining world. Buterin hopes to get around this by raising a private fund, and just "tack-on" the solution to Ethereum's problems. Also easier said than done, not everyone has Sillycon Valley money tucked away somewhere for a rainy day. What about Charles Lee, hasn't he chimed in? Of course he has, he hates Raiden Network too, same reason as Buterin. We simply cringe when at-large personalities declare themselves benevolent and in zero need for profit or salary in public. People frequently advertise the opposite of what they really are, and how about a full accounting of how much crypto-assets Mr Lee and Mr Buterin own? THEN we can have those conversations confidently, no? In any case, if Mr Lee and Mr Buterin profited from CREATING Litecoin and Ether, why can't someone else profit from FIXING THE MISTAKES of these two? We don't know, after all we Harpooners are just pissants.

WHO is Raiden Network?
Ya don't say! Seriously, THEY DON'T SAY! brainbot technologies out of Mainz, Germany, they USED to specialize in machine learning for 15 years. so, some guys (and gals)! Feel better now?

We hope you disagree mightily in the comments, much is to be learned from open discourse, and we don't hate our detractors, we embrace them-- FIRE AWAY! We hope, no matter your bent, you learned something or became more curious and analytical. If we've made you think, we've done our job.

Happy Trading Steemers!

Special Thanks to btcmanager.com's Joseph Young for providing some of the Vitalik Buterin and Charles Lee reactionary stuff to Raiden Network's ICO. His article unrelated to ours, is here...
https://btcmanager.com/vitalik-buterin-speaks-out-against-raiden-ico-donates-advisor-proceeds-to-charity/
... if you wish to read more on Raiden Network.