While bitcoin is soaring high and people are readying themselves for the upcoming November fork, some are turning their attention to a new currency that was unveiled at the Las Vegas Money 20/20 event a week ago. Its name is Metronome (MTN) and it is backed by Bloq CEO Jeff Garzik, a former core developer of bitcoin and a big (and controversial) name in the industry.
Not Just Another ICO
While Metronome will start with zero users as many before it had done, there are two main points that distinguish it from other token launches. The first is the nature of the cryptocurrency itself. Metronome is supposed to solve one of the biggest problems associated with cryptocurrencies, namely that each runs only on its respective blockchain. Metronome promises the flexibility of switching MTN assets from one blockchain to another. If successful, this would be an incredibly important step for the industry as a whole.
Currently, a significant risk in buying any given coin is that the blockchain it runs on will be compromised in some way. This could happen because demand for the services of that blockchain declines, or due to disagreements among the developers, which could lead to a fork, as has happened with both bitcoin and Ethereum.
As of right now, if one loses faith in the chain that underlines any of the coins held, the only option is to sell that coin and use the proceeds to buy another. The transaction costs of such an operation are high, and there is a risk of unpredictable value fluctuations occurring while the (often lengthy) transaction takes place. Metronome is supposed to solve this problem, by issuing a digital receipt upon leaving one blockchain which can be taken to another blockchain with zero cost and at a speed of 15 seconds.
The other distinguishing factor of this ICO is the way the tokens will be issued. Instead of using miners, Metronome will issue 8 million of the initial 10 million token supply in the form of a reverse auction in exchange for ether (ETH). This means the price per token will be set very high and will drop until it meets demand. This prevents larger investors of grabbing a big portion of tokens upfront and makes the whole process more accessible to all types of investors. After the initial auction, a smart contract will automatically auction off 2880 MTN every day, and it will do so for eternity. This should eventually balance inflation at 2% and provide a predictable supply over time.
This should be great news for a lot of investors that have remained sceptical of cryptocurrencies. The ability to jump across blockchains should make this currency a lot less volatile and enables people to retain the value of their assets even if a blockchain goes bust.
The predictable supply additionally removes concerns about its future value and according to its founders, every automated element of the system supporting this currency has been stress tested extensively. This means that the benefits of not relying on any third party should outweigh the risks of placing all faith in a series of automated smart contracts that cannot be overridden in any way.
Furthermore, the concept of the currency will be open-sourced to allow developers to tailor their projects to this system and for the public to review it in its entirety. The Metronome founder company, Bloq, is also working on mass-payment systems and other innovative applications that are intended to push the concept of cryptocurrencies into the mainstream markets. Perks will include the ability to send multiple payments at once, among many others.
Some claim that MTN is just a more complex and incomprehensible scheme to profit off the concept of the ICO, while enhancing divisions among developers of bitcoin and other currencies. MTN founders have ensured the public that none of the proceeds from the auctions will be kept by the company. Instead, 100% of the ether that is raised through the ICO gets locked up in a smart contract to provide liquidity for coin and power the economy it creates.
This promise should reduce concerns about the legitimacy of the project, but of course, it does simply remain a promise. The same applies to the promise that after its launch on Ethereum, the ability to transfer it to other blockchains will in fact ensue. If someone buys MTN on the day of the ICO (the exact date in December hasn’t been announced yet) they are essentially placing all their faith into the claim that the concept will ultimately work.
The concept behind Metronome promises a much anticipated innovative step in the industry. If successful, it won’t only serve to make early investors a lot of money, but it will also propel the industry forward in a way that has the potential to truly revolutionise the way society makes payments.
This is because it could effectively remove concerns about volatility and credibility associated with cryptocurrencies, and could be an important step in pushing the concept into mainstream retail. That being said, a lot of open questions remain. It is unclear whether the blockchain jumping phenomenon will even work, and how many chains will be a part of the system. Furthermore, MTN faces the challenge of starting out with zero users and establishing itself as a trusted coin in the market.