Polkadot: Should I buy it? Is DOT worth it? A detailed study and Price Prediction out to 2025

hello everybody welcome to the show going to try something new today i'm going to analyze polka dot in a brand new framework and many of you have been on me to analyze all of your favorite old coins and i'm beginning with my next favorite you already know in full disclosure heavy into bitcoin ethereum cardano little engine coin and binance bnb token so they're the five that i have and this or v chain could be number six now vechain is coming after this analysis but please share your feedback in the comments below what you think of the structure and format again i'm trying to be as comprehensive as possible make the best content on the internet so enjoy and as usual let's jump right in math money freedom you know the name of the game and disclaimer none of this is investment advice i'm going to show some price predictions at the very end and a lot of conclusions but again do your own research and this is edutainment so as usual this is my new no not as usual this is brand new actually this is my new invest answers token valuation process where i go through a 10-step process and i look at what the token does how it plays industries it can disrupt the ranking against other tokens growth rates value propositions special source etc the tech and developers the ecosystem the longevity like how long they've been in business and at the very end price prediction ultimately stage 11 i follow everything by my usual conclusions so always stay to the end and get to the conclusion so let's blast to this and let me know what you guys think so first of all for those who do not know the background of polka dot it was founded by gavin wood who was the former co-founder and cto chief technology officer of ethereum so this guy knows ethereum inside and out which is a huge feather in the cap for dot as i'm going to call it going forward dot is short for polka dot and his vision was a multi-chain framework that basically everybody could tie into so quick background for those of you who don't know the background of polka dot and i'm going to call it dodge from here on in it was founded by gavin wood the former co-founder and chief technology officer of ethereum so this guy knows his stuff his vision was a heterogeneous multi-chain framework which i'll go a little bit into as we go through this presentation and the focus is to support web 3.0 so web 3.0 is full decentralization web 1.0 is commerce web 2.0 with social et cetera you get the idea this is going to be very very disruptive and the first test of this the canary kusama network is independent of polka dot but runs on early unordered versions of polka dot so that's a little bit of the history in 20 seconds or less now let's go into exactly what it does so the end game is to enable web 3.0 which is a very big challenge to overcome but these guys think they can do it now that is a fully disintermediated and decentralized internet so if you think about the internet you guys use every single day it is very centralized and this is going to break all of that apart so also part of the vision is to create and enable the possibility for separate blockchains to communicate with one another to be able to pull off certain things and do everything in a very timely secure and scalable manner a lot of the challenges that exist with the blockchains this will overcome all of that so a quick polka dot example just to put some context so it is an integration methodology and for those of you out there that know technology the most important thing in technology is integration the ability to pass data if data is stuck in a silo or in a process or in a system it is worthless and these guys are trying to overcome probably the toughest problem in technology today now imagine a smart contract on ethereum triggered by an oracle like chain link that triggers a payment on bitcoin network that demands to be paid in line coin which would require a conversion all of this is an example of four separate blockchains that are required to pull off one story and that is the special source of polka dot and how they plan to fit in and again it's extremely powerful if it's possible so let's talk a little bit about what i call how it plays so it is a shorted multi-chain network and just for those who don't know sharding means basically breaking things up into individual segments or shards like chopping up a carrot now it is coordinated by a central relay chain that processes data and transactions on several chains in parallel which makes it very fast and very efficient and these are called para chains think parallel chain power chain and you can earn tokens in three different ways first of all as a government's role and as a staking role and as a bonding role and bonding is kind of a new concept for many in this space so just to dive into these real quick as a reminder to everybody staking is the process of receiving cryptocurrency as a reward for holding funds in a digital wallet to support the operations of a blockchain bonding involves locking in a certain number of tokens for a specified period and tokens are used by the polka dot community for governance to vote on changes in the network kind of in some ways similar to to so it's important to think about those three different functions because the bonding one is relatively new to this world now let's look at some target industries and what i can really interrupt now polka dot focuses on enterprise and business to business financial applications that require bank level security stability and other apps so i'll step out for one second as you know one of the reasons i've been so bullish on ethereum from the very beginning is because of d5 the ability to completely interrupt and disrupt all things financial services insurance real estate banking you name it but this also has other applications in other areas beyond finance so there's gaming there's payments cyber security supply chain management network and the whole iot or internet of things insurance even private transportation and ride sharing and that's going to become very very important in the future as well with the advent of things like robo taxis so super exciting time and this has the potential to work across all of these industries in a big way now let's look at the scorecard ranking of where polka dot is today it is ranked number eight in terms of market cap up against some of those other players now what is important to know is polka dot is currently smaller than cardano smaller than xrp smaller than tether and binance but the ones i'll be focusing on a little bit today will be binance and cardano as i think they are beyond ethereum very very important for this analysis too especially when it comes to pricing and benchmarking so what are the growth opportunities so what makes this whole thing very special is four different components one is the relay chain which is the heart of polka dot so it brings about all of the shared security and cross-chain interoperability the power chains i discussed earlier these are the sovereign blockchains that have their own tokens the power threads which is a subset of the power chains and these basically operate like a pay-as-you-go model so if you don't need a full-time 24 7 power chain you can deploy a power thread which is very helpful and bridges the most important thing that supports all the connectivity this allows the power chains and the parathyroids to connect and communicate with other blockchains just like bitcoin and ethereum and chain link and all those other ones as well so that's kind of the rough architecture where the growth opportunity lies now the value proposition first of all you got to talk about the problem statement first so blockchains typically today operate a separate islands of data with little way of leveraging the information that the other network possess and that is the huge problem as i mentioned data as an island is worthless and this plans to overcome all of that so polka dot tackles key issues of blockchain interoperability ability to community information from private blockchains to public networks and vice versa so think about that going from private to public and back and also introducing a new era of scalability interoperability and security again they are taking on a lot of stuff and if they can pull it off boom it's off to the races so what's also very important in terms of value proposition is they can handle transactions at scale because of their architecture now it was very clear gavin the founder he knew the challenges with ethereum back in the day and before eip 1559 which is coming in july ethereum can only handle about 15 to 20 transactions per second whereas polka dot claim they can do 166 000 so it is wicked fast i mean we're talking faster than visa and mastercard and a whole bunch of other stuff combined and that's powerful speed can kill but it could also be very helpful in this world as well so that is a huge value prop now in terms of what i like to look at as well is the technology and developer community they have over 2 600 developers that sit in the substrate technical channel that's basically the underlying architecture of the whole platform and they have developers in some of the top places on earth including eteha which is a very brilliant university in zurich switzerland and i knew a lot of people there went to eteha so it is a top-notch university now what's also very important is if you look at the number of developers and the growth in these developers polka dot is second only to ethereum which is a huge plus as well because the more developers the better the technology real simple and what gavin has ability to do is promise very ambitious future which attracts the best minds in the world as well and some people say that is different to some of the other platforms as we go forward so let's look at the ecosystem real quick i'm not going to dwell on this but basically they have built up a very powerful ecosystem as over 350 projects running now maybe 400 at this stage but they have key partners across all areas of oracles and d5 and smart contracts privacy and scaling and wallets and gaming and so much more and they've only just begun so that's the good news now let's look at one of the negatives in my opinion is the track record and longevity so polka dots founder gavin wood first introduced this via white paper in 2016 and they just launched the token at the end of 2020 so this whole platform is less than six months old and it's a very very brief history and it doesn't have a track record for comparison etc and this makes it very very risky my job here is to always point out risk so the fact that something is so young and so untested and unproven is kind of scary but to counterbalance that we have gavin who's got the experience of ethereum which does work and has been working very successfully for five years and we've just seen the explosion in the ethereum price over the past couple of weeks so that is goodness goodness goodness but temper it with a little bit of conservative conservatism as well now onto the favorite part price prediction so this is hard to predict price because i can't really look at existing revenue streams and models and network effect etc so i had to do a couple of things a little bit different so first of all i always like to look at the supply now there is no maximum supply it is inflationary unlike bitcoin which is deflationary and there are currently just over a billion in tokens in issuance so the supply technically is a little bit of elastic and can grow and that's one of the things i also don't like as well because when there's infinite supply that can always kind of compress the price but counterbalance as well a lot of people stake their polka dot which means it takes a lot of supply off the market which actually helps price but just bear that in mind as we go forward so i created a few different models like i always do and this one was a bit of a challenge it's very difficult to price so what i did was a couple of things i made up some theoretical models myself so the first one is what i call the dot to ethereum ratio so i look at the ethereum model and comparing that ratio so basically at the high we're at a point zero two four ratio of dot to ethereum and if we go back to that level that would bring about a 2.59 x from where we are today because we're actually at the 0.009245 mark today so that would bring us back to a price and maximum price of about 94.57 which is quite impressive so that's the first model now let's look at the second model i put together this is basically assuming if polka dot can execute and pull off everything that they're that they say they plan to do there's no doubt in my mind that polka dot should have 40 of the ethereum market cap based on today's numbers and this is of course the future price prediction and 40 of that the market cap would be about 182 divided by 34 multiplied by 36 which is about 193 dollars a token which is a 5.3 x from here again big stretch requires perfect execution and pulling off the vision of what they well i covered in the beginning so we'll see the third model is a lot of people believe that polka dot could be bigger than binance the binance chain so i hold bnb and i do not hold dot at this stage but many expect the dot capitalization to overtake ripple and binance so conservatively saying it can catch up to bnb performance this year it would take us up from at 343 gain which is what they currently have year to date up to the finance return which is about 1581 percent and that'll be a 4.6 x or 165 now bear in mind the cap should technically be 3x because if you take the finance market cap divided by the market cap of polka dot that would be a 3x so between 3 to 4.6 x would kind of help them catch up to binance and overtake binance i think it's going to take a long time for that to happen um and they need to start executing and delivering on their promises and they're not right quite there yet so stay tuned for the conclusions so the final piece is uh some conservative price predictions based on some top consensus of analysts out there that'd be a year-end price of 66.21 118 2022 140 2023 all the way up to 200 in 2025 and i know sometimes i give my very conservative price predictions and people go no it's going to be worth a thousand dollars but i'd rather again be super conservative and take everything together at once so i've put all these models together as well as usual i came up with an average to think about where this could go so again not investment advice but do your own research so when i put all these models together the conservative model we just covered the dot to eat ratio model the 40 of each market capitalization and matching the b and b performance and average of the mole i get a price target of 2021 of about 129 and that'll be at the top of the bull market of course 20 22 167 203 in 2023 that's funny 20 23 203 dollars that is pure coincidence 2024 will be 248 dollars and 2025 303 dollars and what's interesting that's 303 dollars it's about an 8x where we are now so an 8x over the next five years conservatively and also when you look at these numbers just for simplicity you can take the price of 303 and that equates to about 303 billion or any of the other models so net net the market capitalization of polka dot i believe could be somewhere in the realm of conservatively 200 billion to 303 billion compared to where it is today so as usual conclusions thank you for staying till the end and there's a lot of ground to cover so first of all many think this is a swiss-born blockchain of blockchains often be said to be the ethereum killer so is it the ethereum killer i'm not sure has yet to be proven to me and if you value staking rewards then you will like polka dot so it could be the next 10x altcoin as i showed you 8x conservatively as possible in five years and the polka dot ecosystem is very impressive so again based on all my models and including the conservative growth rates it could be up to a three or three dollar price by 2025 or an 8x from here the other thing as well i'd like to just temper the passion we are still very early they have 350 projects running maybe 400 at the stage far more than cardano but the problem is is still so much more proof of concept is required they have no smart contracts as yet etc so net net as far as i'm concerned ethereum is still the safer play for now and i know that many will ask me so try to dispel these questions in advance where can i buy it so the three places you can buy polka dot coinbase binance and kraken probably a few others i think you can get on voyager now as well and but they're ones that i definitely do know of and pokedot have their own js wallet that users can download for free and it also can be downloaded onto the ledger nano s or the ledger nano x so that is polka dot again the conclusion is we are early they have a very impressive vision i'll be monitoring it very closely and as usual updating my price models as they start getting more wins under their belt and start proving out the model and the vision so let me know if you like the structure and format and the price prediction models if you have any other ideas for price prediction models or where you believe the polkadot price will go drop a comment below so as usual big thanks to every patreon i love working with you every day the coolest bunch of people ever thank you for everything and finally if you want more hit the like and subscribe see you all soon see you tomorrow bye oh one final thing if you have whatever your next priority is i'm going to do v chain next and then solano but if i hear a lot of requests for something else let me know and i'll do that as well okay thanks all

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Keywords: cryptocurrency, crypto, investing, blockchain, invest, accumulation, ethereum, eth, ether, altcoins, polkadot, dot, polkadot price prediction, polkadot vs cardano, polkadot explained, polkadot price prediction 2021, polkadot coin, polkadot staking, polkadot review, polkadot news, polkadot versus, polkadot vs ethereum, cardano vs polkadot, polkadot vs binance, polkadot vs bnb, crypto news today, cryptocurrency explained, cryptocurrency news today, polkadot crypto, dot price prediction 2021

Id: 98F6h9uCi6A

Length: 19min 19sec (1159 seconds)

Published: Mon May 10 2021

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