Investigating the Top 50 Cryptocurrencies, Part 29/50: Ark

Ark is a fast, secure blockchain that claims to use “SmartBridge” technology to connect itself with other major blockchains. It is positioned as the “Google of Blockchains,” (in theory) allowing users to transact across different currencies without friction.

In the wake of bitcoin, there are many tech entrepreneurs / developers wanting to help build the infrastructure of blockchain. You have to develop a wary eye for these kinds of projects.

While there will be a few unicorn mega-blockchains that change the world, there will also be a ton of lackluster projects billing themselves as the next big thing.

With Ark, I see signs of the latter, to be honest. The blockchain looks robust enough. It’s got fast transaction times, a good governance system, and a lot of transparency. My question is: Does this blockchain solve a real problem in a novel way?

This post will dig deeper into that question. Keep reading for an overview of the Ark blockchain.

About This Series + Disclaimer

This post is part of a new series where I investigate each of the top 50 coins by marketcap (based on coinmarketcap.com's rankings on October 11, 2017). My goal is to help steem’s userbase become the most knowledgable blockchain community in the world.

Disclaimer: I am not an investment expert and will not be providing investment advice. I will teach you about the top 50 coins, and you can do what you want with that info.

What Ark Does

Take a look at the first paragraph of the Ark white paper:

_{from the white paper}

Have you ever been frustrated with your speculative bitcoins and ethereum? Are all of those altcoins getting you down? Have no fear, Ark is here.

Right away I have a bad taste in my mouth with this kind of introduction. I don’t like when blockchain projects position themselves as superior to every other project in the space. “Those are tokens all have problems, and we can solve it…” IDK

Luckily, behind this marketing copy, there actually is a decent blockchain. As far as I can tell, the ARK team has done a good job of building a robust ecosystem and managing it well. Transactions happen every 8 seconds on this network and are mined by one of the top 51 delegates as measured by token holders’ votes.

In the future, “SmartBridge” technology will reduce friction when transacting between Ark and other major tokens. If you hold ARK and the grocery store holds ETH, have no fear - you can send them Ark via a smartbridge. The grocery store will receive ETH.

The Problem With ARK’s Premise

The premise of ARK is: our current major blockchains are flawed. They exist to perpetuate speculative financial instruments that average consumers cannot rely upon.

ARK’s solution is… to build a slightly faster version of the same system, lol. The ARK token is no less speculative than BTC or any other altcoin. It’s not solving the speculation problem as it isn’t a pegged currency.

Other currencies have a more viable claim to “solving” the speculation situation - such as Tether, which has its own issues - so I don’t see how ARK can claim that they are solving the speculation issue.

As far as SmartBridge is concerned… IDK. I don’t understand what they are doing that hasn’t already been done. You can easily transact between a variety of tokens via ShapeShift and other similar services. The idea of Atomic Swaps (trading between different tokens) isn’t new, and I don’t think ARK provides a particularly unique implementation of the technology.

Basically, ARK is a decent blockchain competing with many other similarly usable projects. It’s more of a marketing game than a technology game, which means they are in a (IMO) bad position for the next few years as the altcoin space gets more competitive.

Token Distribution

ARK had an ICO towards the end of 2016. Their goal was to raise 2000 BTC, or about $2 million of USD at the time. Unfortunately they only raised about 60% of that, leading to questions about how feasible their roadmap would be on reduced funding.

After some brief discussion, the team decided to move forward with the project, offering optional ICO refunds for any investors who didn’t to participate.

From the white paper, here is the token distribution from the genesis block:

The choice to distribute 15% of the tokens as compensation to the founding team is quite reasonable - that’s a lower percentage than many other projects in this space. With regards to distribution, I think ARC did a great job.

More tokens are issued with each block that is mined. The information wasn’t super clear on this, but I think that it’s a 6.3% yearly inflation rate to start, reducing down to a resting rate of 4% within the next ten years.

That means ARC is an inflationary currency indefinitely - even moreso than steem, which reduces to a final rate of about 1%.

The ARC Team

ARC was built by several founding members of the LISK team. Here’s a few of the key players:

(note: all images are taken from the ARK website “Team” page)

Mike Doty, Managing Director & Co-Founder

Mike graduated from Caltech with a B.S. in Engineering and Applied Science way back in 1984. Since then he has been working in the computer science field, although the details are a bit scarce. He previously founded Bitseed and was a co-founder for “Crypti,” supposedly a predecessor to Lisk.

FX Thoorens, CTO & Co-Founder

FX (full name: Fancois-Xavier) worked as CTO (and co-founder) of Donatio, a donation platform focused on religious charity for three years. He also contributed to the development of LISK for six months in 2016 before switching over to co-found ARK and focus his energy there. Prior to all of that, he worked as a consultant.

Lars Rensing, CFO & Co-Founder

Lars graduated from “Avans Hogeschool” with a degree in Finance in 2013. Following that, he worked for 1-2 years each at a few different jobs, at companies including: Besix, Basalt bouwadvies bv, and Hakkers B.V. He took the job as CFO for ARK starting September 2016 and continued to focus his energy on the project today.

Market History

It’s a great day for ARK holders! The token mooned back in September 2017, and it’s currently sitting back around the record high following a big dip in October.

This is one of those charts where, as a guy without much trading experience, I have no idea what is going to happen. It seems feasible that the token could recede back down to earlier, lower valuations. Or perhaps a continued moon in on the horizon.

In the long run, it feels to me like ARK might not reach higher valuations. The technology isn’t unique enough to drive it beyond the 20s of the market cap chart, IMO. I’d be careful with this one.

Final Thoughts

ARK is a reasonable blockchain. The team seems organized and up for the task of developing a general use consumer-focused blockchain.

The problem is, they aren’t up for the task of building an industry standard blockchain to enable atomic swaps between a bunch of different tokens. If you strip away all the marketing hype, that’s what they say they will do. I’m not seeing it.

I think that one day, the altcoin market is going to hit a recession. The bull market will become a bear market. On that day, it is blockchains like ARK that will get hit the hardest… decent blockchains without a real competitive edge.

That’s why I don’t think ARK deserves a ton of attention. Until they put their money where their mouth is and deliver a real game-changer with their blockchain technology, I’ll consider them another decent niche token.

ARK isn’t a big player, but at least it’s an honest group of people trying to build something. I wish them (and their community) the best.

What do you think about ARK?