Lisk (LSK) is attracting a lot of attention because it is a cryptocurrency based upon sidechains.
To explain, Lisk’s blockchain ecosystem gives anybody easy access to sidechains. A sidechain is a less encrypted digital shortcut that allows fast access between blockchains and other software. For example, sidechains are often used to deposit cryptocurrency in bank accounts.
Sidechains are popular because they offer a solution to the great blockchain scalability problem. In detail, existing blockchain solutions like Ethereum (ETH) and Bitcoin (BTC) have a very limited capacity for transmitting data.
Has Lisk (LSK) Solved the Blockchain Scalability Problem?
That makes them slow and incapable of handling large volumes of transactions. For instance, Bitcoin will only process five to 10 transactions a second. Additionally, Ethereum only processes 15 to 20 transactions a second.
Under those circumstances, an Ethereum-based gaming platform will crash if over 20 people try to play a game at once. Therefore, large Ethereum is useless for large volume commercial purposes.
Notably, Ethereum-platforms are incapable of handling credit card processing or e-commerce. However, cryptocurrencies like Ripple (XRP) and Lisk (LSK) get around the scalability problem with sidechains.
Ripple, in particular, uses the RippleNet sidechain to handle up to 1,500 transactions a second, HowMuch claims. Several companies and financial institutions are using RippleNet to send remittances between countries. Significantly, Banco Santander (NYSE: SAN) is allowing individuals to make cross-border payments using Ripple.
How Lisk (LSK) could cash in on Sidechains
Under these circumstances, the most feature valuable offered by Lisk (LSK) is Lisk Commander.
The Lisk Commander generates cryptographically-secure genesis block and bundle vital sidechain components. Significantly, Lisk Commander lets you generate sidecahins that include Lisk Core essentials. Lisk Core provides a direct connection to Lisk’s blockchain main network.
Importantly, that lets you offer Lisk tools such peer to peer (P2P) Websocket layers, and a standardized account ledger system. In addition it allows users to conduct Lisk (LSK) transactions through a sidechain via an application program interface (API).
Moreover it is possible to customize sidechains using Lisk Commander. Lisk makes building sidechains easy with a Lisk Sidechain Development Kit (SDK). The SDK includes Lisk Elements a library of solutions made by the Lisk Foundation.
The Big Opportunity at Lisk (LSK)
The big opportunity Lisk Commander offers is the ability to create sidechains for specific business purposes. For instance; a Lisk (LSK) payment solution built into a gaming platform.
The ultimate goal at Lisk is apps built directly in sidechains. In particular, sidechains could be delivery channels for videos, decentralized apps (Dapps), games, remittances, securities, and micropayments.
The drawback to Lisk Commander is there is no evidence anybody is using it in the real world. I will be skeptical of Lisk, until the Lisk Foundation unveils a platform processing LSK payments on a sidechain.
The drawback is sidechains are less encrypted than the blockchain. A sidechain’s capacity is greater because there is less encryption.
What is Lisk (LSK)
The Lisk (LSK) ecosystem comprises the mainchain and sidechains. The mainchain will serve as a blockchain hub for the sidechains.
The Lisk Foundation offers a variety of tools for the creation of sidechain decentralized applications (DApps). Those tools include:
- The Lisk Hub is an all-in-one solution that will allow you to manage LSK tokens. Interestingly, the Lisk Hub will feature its own decentralized exchange (DEX) for cryptocurrency. The DEX will allow you convert currencies through Lisk Hub.
- The Lisk Core gives advanced technical users access to Lisk’s main network blockchain data. That lets developers create commercial applications for Lisk.
- The Lisk Mobile is a smartphone wallet with features like Face ID and Touch ID. Lisk Mobile is available for Android and Apple in Google Play and the App Store.
- Lisk Elements is an open source collection of libraries that contain the building blocks of the Lisk system.
- If you want you can also access Lisk Nano, the old Lisk Wallet from Lisk.
Is Lisk (LSK) a Good speculative Cryptocurrency?
There has been interest in Lisk (LSK) lately because it was the 29th most popular cryptocurrency on 22 October 2018 according to CoinMarketCap.
Lisk (LSK) offered an impressive Coin Price of $2.74 on 2 November 2018. Moreover, there was a Market Capitalization of $306.057 million and a 24-Hour Market Volume of $4.72 million on the same day. In addition, there was a Total Supply of 126.816 million LSK and a Circulating Supply of 111.800 million LSK on 2 November 2018.
There are a few drawbacks to Lisk as a cryptocurrency. For instance, it is not Ethereum-compatible. Thus, ERC20 tokens; the most cryptocurrency design, cannot be used on the Lisk sidechains. I believe lack of Ethereum-compatibility will severely limit Lisk’s market.
Why Speculators should stay Away from Lisk (LSK)
Moreover, there are no ecommerce, banking or other real worldwide uses for Lisk listed at its website. That makes me suspect Lisk’s sidechains are not working as advertising.
I think Mr. Market overprices Lisk at $2.74 because there is no evidence the Lisk Foundation is delivering on any of its promises. Lisk is a great idea for a blockchain solution that is unproven.
Therefore, Lisk is a classic example of a cryptocurrency that is all talk and no action. Investors and speculators alike should stay far away from Lisk, until the Lisk Foundation delivers on its promises.