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Project Spotlight: Particl

Project Spotlight: Particl

In the coming weeks I am going to run through a series of projects that have either launched or are shortly releasing products including OmiseGo, AirSwap, Zilliqa, Request Network and MakerDao.

What is it?

In this article I will focus on Particl, an idea that has been in the works in one guise or another for over three years. The successor to the 2014 startup Shadow Project, Particl was launched in July 2017 and is an oft either misunderstood or unknown entity.

Unlike many of the projects covered, Particl is a Proof of Stake (PoS) cryptoasset based on the Bitcoin codebase, something of an anomaly these days.  It has two core ambitions at its heart:

  1. Provide a platform which can host a variety of DApps such as messaging and marketplaces
  2. Facilitate privacy and anonymity (for those unfamiliar with the term, a ‘privacy coin’ aims to make all transactions anonymous so that payments can’t be tracked in the manner Bitcoin transactions are susceptible to)

It counts 21 team members in its rank and Charlie Shrem, a rather notorious figure and founding board member of the Bitcoin Foundation, as an advisor.

Why should I care?

The team have recently rebranded and in doing so have chosen to emphasise the platform nature of the project, allowing it to host a whole manner of DApps. However, its decentralised anonymous marketplace remains central to Particl. This aims to be the foremost crypto marketplace (and the competition is fairly thin given the potential riches of the idea). This marketplace is then combined with the privacy centric approach of Particl to enable both private and public transactions. This means that not only are transactions untraceable but also that listings can be made private and only accessible if a password (the private key) is known. 

We believe a trustless, private economy can be built without middlemen
— Particl

A decentralised and crypto led marketplace is inevitable at some stage for a number of reasons, not least that most countries will not tax for purchases but will for profits withdrawn from investing. The marketplace itself will have a number of advantages, not withstanding the use to pay in cryptoassets of the customers choice. The fees will be far lower than those charged on marketplaces such as eBay and Amazon, whilst the ability to list anything outside of the purview of the site administrators will also be attractive. There is also no trace of any purchase. This is not just of potential interest for illicit purchases, but may be of use to people for legitimate but potentially embarrassing acquisitions too.

Whilst cryptoassets are widely used on darknet marketplaces for illicit purchases, there is no such popular alternative for legitimate uses nor a decentralised marketplace built on the blockchain – a natural progression which will allow people to spend their cryptoassets easily and which will reduce the onus away from regular websites and operations accepting them. A successful marketplace such as this would be a positive for all of crypto, not just Particl.

 A demo of the Particl marketplace

A demo of the Particl marketplace

What else should I know?                

Some of the more important Particl features include:

  • Atomic swaps: Particl accepts most cryptoassets to be used on its platform which are exchanged into Particl (PART) at time of usage. Services such as ShapeShift or Changelly can be integrated into the Particl wallet to facilitate this
  • Protocol agnostic: Particl is built with the expectation that the protocol Particl is built on top of may need to change and as such can be expanded and moved over to a different platform if required
  • Proof of stake: As mentioned, Particl utilises a PoS protocol called Particl Proof of Stake (an explanation of what PoS is can be found here). It rewards stakers with 5% per year for securing the network at launch, although this is scheduled to eventually drop to 2%. The Particl POS also allows users to stake offline coins, meaning that users don't have to run a node 24/7 as with other projects and the team also claim quantum resistance
  • Decentralised voting: In order to allow the platform to be self governing, users have a proportional vote equal to the number of PART held to vote on community decisions
  • Escrow: In order to facilitate marketplace transactions between two parties who do not know each other, Particl uses a Mutually Assured Destruction (MAD) escrow to lock funds in an untouchable address until both buyer and seller approve the transaction has been completed satisfactorily

How viable is the project?

The following should be prefaced with the admission that Particl has missed a number of deadlines, including the release of the marketplace which was scheduled for Q1 ’18. Although this is far from ideal, many startups – particularly small ones trying to achieve a lot – will do the same.

However, both the idea and the implementation of Particl are both realistic and attractive. A decentralised marketplace is a logical progression; cryptoassets make for perfect currencies for transacting with and Bitcoin’s main achievement is guaranteeing trust between two parties where none exists, without the need for a middleman. The team have been working on it for years and a release is close. The ability to use any cryptoasset is a further boon to the likelihood of adoption.

How is the token used?

The PART token is used in four ways:

  1. Stakers receive transaction fees from transactions on the network (including marketplace purchases)
  2. Stakers can vote on community decisions with proportional weighting to their holdings
  3. Purchasing items on the marketplace (as even if another currency is used, it is always converted to PART for the transaction)
  4. To make anonymous transactions (RingCT or CT)

What issues does the project face?

Particl has a number of issues by no means unique to the project. Firstly, it may struggle to gain true adoption in a crowded environment with hundreds of ideas competing for attention. However, most of its foremost competition share this issue – there is no 800lbs gorilla in this arena at present. That said, the Particl community (usually the first adopters of any product) is small and because it is an older project it may struggle to achieve the awareness that many of the new ICOs which get the benefit of a month or more advertising campaign whilst conducting the ICO itself receive. 

A more pressing concern is the lack of exchanges it is present on. Whilst it is listed on Bittrex, there are frequently issues with the wallet which prevents depositing/withdrawing from the exchange and the exchange is currently not accepting new users. None of the other exchanges have any real volume.

The marketplace itself will face a couple of issues that will inevitably arise including what goods are and aren’t acceptable to be listed. As Ryno Mathee, lead developer, explained, the team “aren’t actually comfortable with things that get sold on the black market”. The solution Particl have proposed is to allow the community to vote on what is and isn’t allowed.

Although there will be a temptation for many to corner the illegal market, the legitimate market is many multiples bigger and should be seen as the real goal for the project. If Particl is to get true long term mass adoption, there needs to be a clear idea as to what it is and who it caters for. Most people will not use a marketplace listing drugs if all they want to buy is a watch or car.

Financials

Particl currently sits at $10 and c. 75% off its ATH, sitting at a market cap of $92m which sees it placing just outside the top 100. Like most projects, the price is back to its early December price. Given that an alpha release is imminent, there is a reasonable expectation that the price will run up shortly. 

Conclusion

I like to put my money in projects where I think the idea will eventually come to fruition, one way or another. Whether or not Particl is the marketplace project that achieves mainstream success, I believe there will eventually be a decentralised privacy focused marketplace that eventually does. It is an idea that makes too much sense not to work. I am also aiming to invest at present in solid projects with imminent product launches and as such Particl is a good fit. 

Disclaimer: I purchased PART today. 

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