Random Coin Talks #2 - LoMoCoin

It’s been a while, but here is the second post in the category #RandomCoinTalks, in which I discuss a cryptocurrency that is randomly selected out of the top-200 coins based on market capitalization. This time I will inform you about and give my personal opinion on LoMoCoin. What are the unique features? What has future in store for this coin: moon, scam, or somewhere in between?

Besides, here you can read my first random coin talk starring Leocoin.

General information

LoMoCoin has Chinese roots and the project started at the end of 2015. The project uses the blockchain technology with a PoW to PoS algorithm and is not mineable. Their goal is to build a new, global ecosystem around the geographic location and information of people. Key is their mobile app that provides offline to online marketing between businesses and users. Initially, the app was launched on April 18, 2016 in China and this first version was downloaded over 300,000 times. Next week, v2.0 of the app is launched on a global scale, although the release in China will be delayed due to the new regulations.

There is a limited number of exchanges that list LoMoCoin. Bittrex is the main exchange with over 99% of daily volume, while the volumes on Allcoin and CoinExchange are significantly smaller. The currency is delisted from Yuanbao a short time ago. The organization is a little vague about the maximum number of LoMoCoin available. They started with a maximum of 1 billion LMC, but realized they did not need that much and decided to ‘burn most of the undelivered coins’. As a result the total number reduced to 280 million LMC and after integrating a PoS mechanism this number is continuously increasing. It is unclear when and if a maximum is reached, but they are very open and detailed about the distribution, including blockchain addresses.

Stats

(September 23, 13:30 CET)

• Rank: 188
• Market Capitalization: $ 10.99 million
• Price: $ 0.050929
• Maximum price: $ 0.102427 (August 15, 2017)
• Total supply: 300.9 million LMC
• Circulating supply: 215.9 million LMC
• First launch: April 18, 2016

Features

But what does LMC add to the broad range of cryptocurrencies? LoMoCoin is all about geolocation and they use it to connect customers and shops, which is the future of retail marketing according to Michael Jones on Forbes. The team strongly beliefs in the blockchain technology and want to use it to make a connection with internet applications and the real economy. The mobile application is the first with Location-Based Services based on blockchain technology. Given a user's location, the app shows businesses in the neighborhood that are linked to LoMoCoin. Retailers on the other hand, can attract LMC users with special deals and, as a byproduct, also improve offline sales.

The services and products of LoMoCoin are quite marginal, but there are many ideas for future developments as Xiong Lijian, CEO, explains in an interview:

For the future of LoMoCoin (LMC) we are working on many things. These include some new application models, such as a social economy based on the location of users and mini Asset Backed Securities (ABS) (i.e. payments derived from and collateralized by a pool of underlying assets), based on the geographic location and intelligent contracts between users. Furthermore, we are also focusing on forming many new and innovative architectural design, for instance, by combining blockchain solutions based on user’s geographic location and information and connecting it with the Internet of Things (IoT). This will form a whole new branch within blockchain technology and will be a major upgrade for what is currently being provided within the industry. We are, nevertheless, currently still at the experimental stage of many of these new solutions and more updates about this will come later on.

Why also a coin?

The app based on blockchain technology looks like a nice idea, but what is the role of the cryptocurrency? Basically, the coin is used for pricing of assets and for transferring of funds. You can use LMC for products and services, which is similar to, for example, Facebook Credits. Besides, you can earn LMC by visiting places. The team does not explain why they specifically need their own coin for this. I can imagine they want a currency that is not restricted by borders, but why not Bitcoin?

Opinion

I am positive about this coin as I believe in the idea. The design of the app and everything else is superb. The idea of spots on a map looks similar to Pokemon Go, although the purpose is totally different. But we have to see how their global ambition will develop, at least the first experience in China was promising. The information flow has significantly improved over the last weeks (communication inside China went through other channels), which is necessary if you want to gain and retain trust from investors.

From an investor perspective, there is still time to step in. In week 4 of September, v2.0 will be launched, which will probably cause the price to rise as we have seen with a lot of cryptocurrencies. The coin is fairly cheap as it’s only ranked 188th and it is hard to say where it can go. Doing the math, the price has to triple to enter the top-100, while a top-10 spot (you never know) corresponds to a price of almost $5.