Metal is a token that aims to bring the bitcoin economy to the mainstream… but are their incentives in the right place?
The idea of bringing bitcoin mainstream has most cryptocurrency nerds salivating. Metal thinks they can contribute to that process by building an optimally incentivized digital token.
Anybody who uses the metal app to buy or sell things via cryptocurrency can earn a 5% rebate in metal tokens. This basic idea of metal. It is wrapped within a larger market pitch, claiming that the 5% bonus is enough to bring large numbers of new merchants and consumers into the cryptocurrency space.
I’m skeptical… While there may be room for a new token that “fixes” day-to-day crypto spending, I don’t think metal is it. It seems more like an overly centralized attempt at making bitcoin “easy” in all the wrong ways..
How does metal work? Who is the team? What are the economic and technical specifications for the coin? Let’s go deep and learn about the metal token.
What is Metal?
The best place to start with any token is the white paper. Here is the metal paper.
The simplest way to understand METAL is to read these two quotes from the white paper:
Quote #1 — What does Metal do? — “Without an incentive to purchase, cryptocurrency may never reach mass adoption. Metal proposes a system utilizing provable payments attached to verified identities to distribute currency. Anyone can participate to earn METAL as a reward for converting fiat to cryptocurrency”
Quote 2 — Who will use Metal? — “The initial target market will be high risk merchants, cash intensive merchants, and merchants who already accept or want to accept more cryptocurrency. At a later stage, it will be to acquire traditional merchants like Square, Venmo and PayPal.”
Going deeper into the white paper, the authors expound about how many businesses are being kept out of the traditional credit market due to perception as “high-risk” businesses.
Metal’s white paper explicitly names cannabis as one of four industries that make sense to target early on. E-Sports is another one. These seem like pretty good targets — they’re tech-savvy markets that aren’t stuck in traditional mindsets.
From the white paper, here’s some more info on early metal markets:
Token Circulation
The token circulation strategy for METAL leaves much to be desired. It is too centralized, reserving a large share of total tokens to be allocated based on the company’s desires.
Here is a quick pie chart, taken from the white paper:
Roughly 33% of the tokens were sold off in the token sale, 33% are used to pay out rewards to users of the tokens, and 33% are held as “operational funds” to be allocated by the parent company (“Metallicus Limited” — can’t make that up, lol)
Of those operational funds, about 15% were distributed to the founders, early employees, and advisers at the start of the project.
This does not mean the project cannot succeed. It does mean that a lot of the success of METAL depends on the way that the staff allocates those tokens. One third of a token economy is a lot of central control.
We’ll look at the team behind METAL in a bit. First, I want to go over the specifics of how METAL works.
How METAL Works — Spending it, Buying it, Earning Rewards
Metal’s wallet app is not out yet, putting them a bit behind their projected 2017 schedule:
As with any blockchain project, the initial descriptions are very flowery: Change the world, revolutionize payments, introduce bitcoin into the mainstream… but what does METAL do? Here’s what I figured out:
Metal, the blockchain, was created and is managed by Metallicus Limited, the parent company. The METAL wallet will enable users to purchase price-fixed cryptocurrency via the app.
Your METAL assets are fixed at the price you buy them. This is made possible by Metallicus Limited putting up bitcoin as a hedge, so that if bitcoin’s price goes down, they will make up the difference for you. If bitcoin’s price goes up, they take the extra. You just have a USD amount in your wallet, backed by cryptos that you don’t have to worry about.
Whenever you spend money via your metal debit card, you receive a 5% bonus as cashback, paid in the metal cryptocurrency. This is the actual use of metal — to incentivize the use of other cryptocurrencies via a cashback reward.
Both the buyer and the seller receive this 5% reward, which is paid out of the PoPP (Proof-of-Processed-Payments) token pool as shown in the “Token Circulation” section of this article.
Metal tokens are used to incentivize the expenditure of bitcoin via the metal debit card. For casual / new adapters to the bitcoin ecosystem, they won’t need to understand any of it. They can just load up “stable” bitcoin and spend it, earning 5% rewards whenever they do.
You will need to provide proof of identity to use the wallet. This is verified via social security number / Passport ID, a photo, and banking/card information from another account. If you value anonymity, this blockchain is not for you.
The Team: Who’s Building Metal
The most impressive aspect of Metal is its team.
The CEO, Marshall Hayner, has also held executive-level roles at block.io and Trees, a cannabis delivery startup. He has been CEO at Metal for more than 1.5 years.
COO Andy Goldstein worked at Visa for **16 years** before migrating to the cryptocurrency industry first as Regional Sales Manager for BitPay and then eventually making his way to Metal about a year ago.
Sid Parihar, formerly a lead UX designer for Apple (8 years), now acts as the Senior UX Designer over at Metal. If anybody knows user experience, it’s Apple, so that seems like a good pick.
For more info on MetalPay’s team, you can see the full roster at https://www.metalpay.com/.
<h3>Market History</h3>
The Metal ICO took place earlier this year. There isn’t a ton of history to go off of… here’s what coinmarketcap shows:
Merciful stability! It’s nice to see a coin chart that isn’t just a giant example of extreme volatility.
There isn’t much to say about the token right now, speculation-wise. It’s got a great team behind it but with no working product out yet, the whole thing is just theoretical. If you believe in the people, you could probably buy and HODL. Otherwise you might want to stay out and wait for more information.
Final Thoughts
I’m not too keen on METAL so far. The coin is very centralized, and it’s a very unusual way to approach the goal of bringing bitcoin mainstream.
Metal basically suggests: “Let’s pay everyone for using bitcoin,” but their way of doing it doesn’t line up very well with the ethos of bitcoin. Bitcoin is about freedom, while metal represents more of the old school, ultra-centralized way of doing things.
Mostly I don’t see any real benefits to this cryptocurrency that steem does not already offer… We already have no-fee 3 second transactions. It’s a hard sell for me to buy into any cryptocurrency that exists only to facilitate better transactions.
With that said, I could be wrong. What do you think? Do you have any experience with the metal token so far?
