In this post, we are going to take a detailed look into ICON and its business model by performing a SWOT review.
A SWOT review is a standard business practice, where you look at the strengths, weaknesses, opportunities, and threats of a particular business model.
Now although this is a standard business practice, it is still performed based on my experience and interpretation.
What is ICON (ICX)?
Ok so first up, what is ICON?
ICON is a new, permissionless blockchain protocol that has been in development for two years. Coming out of South Korea, ICON aims to build a decentralised network that allows independent blockchains with different governance models to transact with one another, without intermediaries.
It does this through something called the ICON nexus, where other blockchains can connect and communicate with one another using something ICON calls BTP, or Blockchain Transmission Protocol.
ICON’s vision is to ‘hyperconnect’ the world by designing its protocol to maximise autonomous governance with a particular focus on community.
This is achieved by using community nodes (or C-Nodes), Community Representatives (or C-Reps), Citizen Nodes and the ICON republic. Basically a combination of different voting, decision making, and participation rights depending on different node parameters, policies and network contribution.
The ICON protocol doesn’t use proof of work consensus such as what Bitcoin or Ethereum use, nor does it use Proof of Stake consensus, like what Dash or NEO use, but rather a new consensus algorithm called LFT.
LFT stands for ‘loop fault tolerance’ and is a proprietary, high-performance consensus algorithm that supports something called Byzantine Fault Tolerance, or BFT. In laymen’s terms, its basically an improved consensus algorithm that is said to result in a highly secure, highly scalable and high-performance method of consensus.
LFT operates on ICONs blockchain, and is called a Loopchain. The main compenents of Loopchains consist of the LFT consensus algorithm, the SCORE smart contract platform, a tiered system allowing for different access rights, and modular architecture for additional customisation.
So that’s a quick rundown of what ICON what what it aims to achieve. So nowlet’sts move on to examining the strengths, weaknesses, opportunities and threats in our ICON SWOT coin review.
- The first major strength of ICON, is its blockchain protocol Loopchain is open source, with its code stored on Github and available to the public.
- ICON is also a blockchain protocol, meaning with its success over time, the strength of the ecosystem grows. Blockchain protocols are also impartial to any particular industry, meaning the market demographic is very broad and wide reaching.
- They have a working prototype, with their Mainnet 1.0 being launched and the genesis block created on January the 24th, 2018. DApps can now be created on the ICON network.
- They are close to launching their own ICON wallet called ICONex. This wallet will have a unique functionality called ‘ICONick’, which allows users to register the wallet using whatever name you choose, rather than a string of random numbers and letters.
- Six DApps are already in development on the ICON platform, which are TINK, Uppsala, Smilegate, Bluewhale, Silkroad and Ad4th.
- ICON will host annual summits for investors, developers and stakeholders to review roadmaps and main net development, with their first Genesis Summit taking place in South Korea on the 31st January 2018.
- A number of significant achievements have been accomplished, such as partnerships with banks, pilot projects launched with 2 universities, and alliances formed with AION and Wanchain.
- Very strong community of 75K Twitter followers, 15K Reddit followers, 3.7k Medium subscribers and 5.7k followers on Facebook.
- ICON will have a decentralised exchange, which will enable transactions between different cryptocurrencies by determining the rate through a Reserve Balance, which is based on the Bancor Protocol.
- Loopchain has already established connections within various industries over the past 2 years, with securities firms, insurance companies, banks, universities, and hospitals participating in various projects and services.
- Firstly, it is a competing blockchain protocol for building decentralised applications, meaning it will be competing with well-established protocols such as Ethereum, NEO, Cardano, Lisk, and other smart contract protocols. One of the value propositions that ICON does offer though is interoperability, however, this is also a feature that NEO offers, as will Cardano
- ICON is also a very new blockchain protocol, meaning it does not have the same awareness and market penetration that other protocols such as NEO or Ethereum have.
- Investors into ICON that hold the current ICX tokens are actually holding Ethereum based ERC20 compliant tokens.
- These tokens will need to be manually swapped through a process with the ICONex wallet once its released, and there is even a note saying it will be open ‘for a few months’, eluding to a close of opportunity to swap tokens after a period of time.
- Considering there are 38,138 Ethereum wallet addresses with ICON tokens, this will surely not be a simple process.
- When we take a look at ICON’s Github account for developer activity, it is currently ranked 269 on the list of most active Github accounts. To put this into perspective, a cryptocurrency called ‘CREAM’ is ranked 268, and a token called ‘Guncoin’ is ranked 272.
- Lastly, because ICON is such a new protocol with a new consensus algorithm, investors need to make assumptions that the technology will prove to be resilient, secure, and scalable in the years to come as more DApps are built on it.
- Well, given ICON is a blockchain protocol, it has the opportunity to be a contender with the likes of Ethereum, NEO, Cardano, Lisk, and the other protocols ecosystems.
- ICON also has the opportunity to prove its LFT consensus algorithm is as secure as resilient as the more traditional and proven Proof of Work algorithms.
- Although it seems ICON is mostly focused on the Korean/Asian markets, it has the opportunity to branch out and market itself into the Western markets.
- Lastly, ICON has the opportunity to set the standard for blockchain architecture through its implementation of loopchain.
- Well, there is the threat that ICON fails to compete with existing blockchain protocols, such as those previously mentioned.
- Given how new this protocol and consensus algorithm is, there is also the threat that there could be a major system failure or hack down the track, leading to reputational damages and potential losses for investors.
- There is the threat that not all early investors who hold the ERC20 tokens will either have the capacity or technical capability to swap their tokens for the native token, again leading to potential reputational damages.
- There is the threat that the platform becomes overvalued from enthusiastic speculators, driving up the price before the platform is functional and the token has actual utility.
Be sure to check out our other coin reviews to learn all about projects like Cardano and Verge, to name a few.
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Beau is the Founder & Chief Editor at Cryptocurrency Australia Media, an educational platform designed to help anyone learn about cryptocurrency investment and blockchain technology. Beau is also the Founder & Principal Consultant of Blockchain Management Solutions, a specialist technical and project management consultancy, is an advisor with Masternode Ventures, a blockchain incubator, and is an advisor with THORChain, a new decentralized exchange protocol.