What is Lisk (LSK) and is it a Good Investment? -BTCMANAGER-

 

Due to the open-source nature of Bitcoin and blockchain technologies, new cryptocurrencies enter the market on a regular basis offering different features than its pioneering predecessor bitcoin. One of these new  cryptocurrencies is Lisk with the ticker LSK.

What is Lisk?

Lisk  is a decentralized network with its own blockchain that has been  launched to create a blockchain that enables developers to build a wide  range of apps on the Lisk network by developing custom side chains.In  that sense, it has similarities to the Ethereum network. However, the  lisk blockchain has not been built with the intention to create smart  contracts, but instead to develop different apps and functionalities  using the Lisk App SDK framework.

With  the Lisk App SDK, developers are able to develop the backend of your  application but also the front end. In other words, they can build  functionalities for their app and the user interface using the Lisk App  SDK. This enables developers to create blockchain applications in a  conveniently downloadable package.The front end (user interface)  of applications can also be accessed in a decentralized way, a unique  feature within the blockchain industry at present. 

Also, it is an open  source software allowing a clear overview of what other developers are  doing and thereby improving new apps and functionalities built on the  Lisk network.Lisk is also a cryptocurrency and has the ticker  LSK. Similarly, though Ethereum’s ether is not a cryptocurrency that is  supposed to be used as a digital currency. Instead, it is the token that  fuels the Lisk network and developers require them to build on the Lisk  network. Lisk had its ICO (initial coin offering) earlier this year,  where 100,000,000 LSK were created and distributed among early  supporters, the Lisk core team, partners, advisors and ICO participants  raising $5.7 million, the fourth highest crowdfund for a cryptocurrency  in history.

Claiming to be the world’s first modular cryptocurrency, meaning that various applications will be run on top of  the Lisk core and all dApps run their own ‘sidechains’. In this way, the Lisk team hopes to keep the ‘mainchain’ agile and Lisk itself will remain efficient.Whereas,  a problem with Bitcoin is that test or fake transactions can fill up  the blocks and slow the network down ‘sidechains’ offers a way to  process high volume transactions without slowing down the main  blockchain. Consequently, the speed of the Lisk network should continue  to grow faster over time.

Where can you purchase Lisk?

At  the time of writing this article, the value of LSK-BTC on the Poloniex  exchange stands at 0.00039, near all-time lows. From a contrarian  perspective, this makes Lisk an attractive buy as the relatively low  price at this moment in time suggests there is less resistance to the  market moving to the upside rather than the downside.Since LSK hit the exchanges on May 24th the price saw an initial jump against BTC and then steadily declined since mid-June. Recently, LSK received more investor demand and it’s price surged against BTC.  

This is shown above with the uptick in volumes at the beginning of  August. Currently, you can purchase LSK on a range of cryptocurrency  exchanges including Poloniex, YoBit, Bloombit, Bit and Bitrex using  bitcoin, ether and other cryptocurrencies.

Is Lisk (LSK) a good investment?

The  future price performance of LSK depends solely on the success of the  Lisk network and the adoption of its technology by developers,  programmers, and start-ups. Lisk is not a digital currency that can be  used to buy and sell goods and services. Hence, unlike bitcoin, no  merchants will likely ever adopt the cryptocurrency as a means of  payment. Therefore, the key drivers will be technology adoption and  investor interest, with the two tending to go hand in hand in the  cryptocurrency market as ether (ETH) has shown.

If you are not  averse to risky speculative investments and are familiar with the  cryptocurrency markets, putting a small amount of money into LSK could  potentially turn out to be a very lucrative investment. Given that Lisk  uses JavaScript as a programming language, which is popular among tech  giants such as Microsoft and Google, the likelihood of its developer  base increasing and adopting Lisk as a network to build applications on  is quite high.

Furthermore, Lisk has entered into a partnership with Microsoft Azure,  which means that developers worldwide can develop, test, and deploy  Lisk blockchain applications using Microsoft’s Azure cloud computing  platform and infrastructure. However, there is a risk that more superior  blockchains that offer similar functionalities will emerge then the  price of LSK will likely drop sharply.I would say LSK is a  riskier investment than Ethereum’s ether as the demand for the  development of smart contracts, especially from the financial industry,  is huge. Also, a background in programming in necessary to fully  understand the Lisk system and may be a barrier preventing some  investors from getting on board.

Moreover, while Lisk performs  well in terms of developer participation, it is lacking in liquidity,  with low trading volumes on exchanges, and needs to build a larger  community around itself to generate more discussion on social media  relative to more successful cryptocurrencies like bitcoin or ether.

Nevertheless,  the potential reward for investing now is also large; the main  advantage over Ethereum is that all Lisk applications run on their own  blockchains, i.e. the ‘sidechains’, which could provide an advantage in  scaling to a mainstream audience.LSK as an investment will only  perform well in the long run if the Lisk network becomes a leading  blockchain technology for start-ups to build new apps over the next year  or so, which up until now looking very promising.

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