There are several attributes that make Einsteinium (EMC2) a potentially disruptive cryptocurrency.
Strangely, observers usually ignore Einsteinium’s most valuable and disruptive feature. Interestingly, that feature is the capability to collect “taxes” through cryptocurrency.
To explain, the Einsteinium Foundation collects a 2.5% tax every time they mine an EMC2 token. In detail, the Foundation donates most of the donation (2%) to science projects. In addition, the Foundation uses the 0.5% tax to cover operating costs.
The Foundation collects the tax by building an algorithm that automatically pays the tax into Einsteinium. Hence, the Foundation is creating a tax that collects itself.
Is Einsteinium (EMC2) a template for government cryptocurrencies?
Obviously, the greatest value here is to governments which could use Einsteinium as a template for a national cryptocurrency. For example, the U.S. Federal Reserve could a United States cryptocurrency, or FedCoin, and collect a tax on every coin minted.
Thus, the Federal Reserve could collect a tax every time an individual, a business, or a financial institution buys or uses FedCoin. Hence, FedCoin could fund the Fed’s operations and the government.
Moreover, they created Einsteinium (EMC2) without an initial cryptocurrency offering (ICO). Instead, the foundation released the coin in 2014. Therefore, Einsteinium’s release is a blueprint for a government cryptocurrency.
To clarify, there will be no ICO, instead, the central bank will make the national cryptocurrency available to anybody who wants to mine or use it. The government will profit because it will build a tax algorithm built into every FedCoin.
Is a Self-Taxing Cryptocurrency a Good Idea?
Obviously, there will be an incredible amount of opposition to a self-taxing altcoin. For instance, all the people who make money off tax preparation; accounts, tax attorneys, H&R Block, politicians etc., will oppose it.
Additionally, there will be concerns about privacy and surveillance. Do we want to give tax collectors, intelligence agencies, and law enforcement the ability to track every transaction?
However, there are advantages to a self-collecting tax. For instance, taxes are a major cause of political corruption. Specifically, corporations and high-income individuals have a strong incentive to bribe politicians to rewrite tax laws in their favor.
Plus, there will be less bureaucracy and fewer opportunities for corrupt individuals to evade taxes. Interestingly, the tax system in the United States looks like a national tax-evasion infrastructure in which bureaucrats, attorneys, accountants, politicians, and others conspire to help the rich avoid taxation.
Under these circumstances, a tax-collecting cryptocurrency will have a lot of value. On the other hand, implementing one will trigger a massive political battle once people realize they will have to pay taxes. Moreover, a lot of ruthless people stand to lose a lot of money if they replace the present tax system.
What makes Einsteinium (EMC2) a potentially disruptive cryptocurrency?
Thus taxation could be Einsteinium’s killer app but the altcoin has other interesting features.
For instance, EMC2 is compatible with the Lightning Network, via the SegWit upgrade. In detail, the Lightning Network is a super-fast sidechain that adds a second protocol layer to the blockchains they build Bitcoin (BTC) and Einsteinium from.
The protocol layer uses smaller blocks to move payments at a high speed than the conventional blockchain. Einsteinium will need such a protocol because the Bitcoin blockchain is notoriously slow.
In fact, Bitcoin was processing only 3.883 transactions per second (TPS) on 30 January 2019, Blockchain Luxemburg estimates. Hence, a Bitcoin-based payment feature could crash if four people try to pay at once. Therefore, most retailers cannot use Bitcoin-based altcoins like Einsteinium (EM2) as payment solutions.
Will Lighting increase Einsteinium’s Value?
This threatens Einsteinium’s existence because Einsteinium is a payment solution. If large numbers of people cannot pay with it, Einsteinium (EM2) will be worthless. In a nutshell, this is the notorious blockchain scalability problem.
I think Lightning will increase Einsteinium’s value by giving it the potential to become a viable payment technology. Under those circumstances, the Einsteinium Foundation’s payment technology be more valuable than EMC2 itself.
For instance, Einsteinium claims to have working wallets for Windows, MacOS, Android, iOS, and Wee Cash. Thus, the latest EMC2 wallet 0.13.5 Lightsaber could be a valuable feature.
Moreover, the Einsteinium Foundation plans a beta test of its emc2me crowdfunding platform on 31 January 2019. The purpose of the platform is to raise funds for science projects. A successful launch of the emc2me could increase Einsteinium’s value.
A Major Flaw in Einsteinium (EMC2)
In the final analysis, there is a major flaw in Einsteinium that could limit its utility and value.
Specifically, users cannot easily convert EMC2 into ERC20 (Ethereum Request for Comment) or EOS based cryptocurrencies. This could be a major limitation because Coinmarketcap listed Ethereum (ETH) and EOS (EOS) as the third and fourth most valuable altcoins on 1 February 2019.
In fact, Ether (ETH) had a Market Capitalization of $11.76 billion and EOS a Market Cap of $2.12 billion on 1 February 2019. Hence, Einsteinium could miss out on a lot of business by not being convertible to those cryptocurrencies.
Plus, many Ethereum blockchain e-commerce and social media platforms are existence. For instance, CCN estimated they built 94 of the top 100 blockchain platforms with Ethereum in November 2018. Conversely, there is a growing number of EOS platforms and decentralized applications (DApps) in existence.
Does Einsteinium (EMC2) have no liquidity?
For example, it cannot take part in Bancor’s liquidity network which makes conversion of ERC20 altcoins. Moreover, owners cannot readily convert EMC2 into dollar-linked stablecoins like the DAI (DAI).
Stablecoin conversion is vital because Stablecoins are mechanisms for storage of fiat currencies in cryptocurrency. In particular, the DAI is an ERC20 cryptocurrency which participates in the Bancor Liquidity Network.
Finally, Einsteinium cannot take advantage of BancorX. Importantly, BancorX is a protocol that makes the conversion of Ethereum to EOS based cryptocurrencies possible.
A major use for BancorX and Bancor is making sure altcoins are liquid. Importantly, when an altcoin is liquid it is spendable in and outside the blockchain. Obviously, a crowdfunding platform like emc2me is useless without liquidity. Nobody will use a crowdfunding platform that pays in money she cannot spend.
How valuable is Einsteinium (EMC2)?
The features make Einsteinium (EMC2) a potentially disruptive cryptocurrency but what value does it have?
Presently, Mr. Market places little value on Einsteinium. In fact, EMC2 had a Coin Price of 3.78¢ and a Market Capitalization of $8.194 million on 30 January 2018. Plus EMC2 had a 24-Hour Market Volume of $145,202 on the same day. Moreover, Einsteinium was CoinMarketCap’s 258Th most valuable altcoin on 30 January 2019.
It achieved these figures with a Circulating Supply of 218.003 EMC2 tokens. Notably, Einsteinium is vulnerable to inflation because it has no Total Supply or limit on the number of coins.
Is Einsteinium (EMC2) a good Cryptocurrency?
In fact, the Einsteinium Foundation has a strong incentive to mine unlimited amounts of EMC2 because it makes money off every new coin. To explain, the Foundation collects a 2.5% tax on every EMC2 token mined.
In the final analysis, Einsteinium’s features are apparently more valuable than the cryptocurrency itself. However, speculators should watch Einsteinium because its value could increase if they adopt EMC2 for commercial transactions.
Plus, Einsteinium shows us what a government-minted cryptocurrency could look like. Obviously, libertarians will hate this, but Einsteinium could be a template for a mass-adopted government-backed cryptocurrency.