An Introduction to Lisk
Lisk, which is the name of both the technology stack and the projects native currency (abbreviated to LSK), is a smart contract, customised blockchain, and secure cloud storage blockchain platform introduced in 2016. The Lisk Foundation, which guides development and operations, is based in Zug, the world famous ‘crypto valley’ in Switzerland. Lisk brand themselves as the first ‘modular’ cryptocurrency. In short, each of these modules act as building blocks, upon which developers can build, publish and earn money from their own decentralised applications (Dapps) within the Lisk blockchain ecosystem. They can then utilise the other features of the Lisk blockchain, such as smart contracts, within their own projects. An interesting feature of Lisk is it’s implementation of sidechains, which mean that DApps built upon sidechains can confine issues with their application to just their chain, allowing normal network function across the rest of the platform; as opposed to Ethereum which would require a hard fork.
The Lisk token, or ‘LSK’, is the platforms native currency, used to pay for fees used when generating transactions, and likewise during normal use of the Lisk platform. LSK tokens are currently traded on some major exchanges, including but not limited to Bittrex, Binance, Huobi, YoBit, HitBTC and OKex.
The most common trading paid is LSK/BTC, though investors can also purchase Lisk using Tether (USDT), Ethereum and even Dogecoin; giving investors maximum flexibility.
Lisk operates six distinct areas, or layers, of their platform. These are the Lisk Protocol, Lisk Core, Lisk Elements, Lisk Commander, Lisk Hub and Lisk Explorer.
All of these aspects are important both to users and investors in Lisk, as it shows the Lisk team have thought a great deal about how each element of the Lisk blockchain works in synergy, despite having clearly defined individual functions.
PoS or PoW – How About Forging?
Lisk tokens are neither mined (PoW), nor are they traditionally minted as in pure proof of stake (PoS) blockchains (like Ethereum have planned). Instead, Lisk tokens are ‘forged’. This doesn’t just sound great; it uses a PoS-proof-of-storage algorithm (sometimes referred to as Proof-of-Space). However, not all users of the platform will take part in forging new blocks. Only delegated individuals, currently a selected 101 people, will be able to forge blocks. Other users of the Lisk blockchain can then participate in the selection of these ‘Forging’ representatives. This means that the Lisk blockchain is operated more like a delegated PoS blockchain. Delegates may create their own pools and engage in mining, and if they forge a new block, the reward they receive will be distributed to all participants within their forging pool.
Lisk implements an inflationary forging system which generates new LSK tokens for every successfully forged block. Within the first year, the forging rewards are five LSK tokens per forged block, however after 3,000,000 blocks have been forged, (taking approximately one year) forging rewards will be reduced by one LSK, and again the next year, until the forging reward is just one LSK token per forged block after five years.
Team and Partnerships
The Lisk team is numerous, with a total of 44 employees working directly for the Lisk project. Of these, 24 work on the development of the platform, with another 9 staff members working on marketing, and the remaining staff filling operational and creative roles. Lisk are transparent with their team members, the full list of which is available via their website, with a breakdown of their role in the company and their expertise. Lisk is clearly committed to strong development, evidenced by their large body of developers, but likewise they clearly identify the need for quality marketing within the cryptocurrency space; an essential part of any projects success which many other coins fail to provide.
Lisk have so far gained some key partnerships, both for their technology and also to boost their public relations. In 2016, Lisk announced they would be partnering with Microsoft Azure, in a move that would allow developers using the Microsoft Azure blockchain cloud to use Lisk as a service program ; allowing developers across the globe to develop, test, and deploy Lisk Dapps using Microsoft’s existing Azure cloud computing platform and infrastructure.
In addition, Lisk is working alongside blockchain PR and marketing firms ‘Expand Online’ and ‘Transform.PR’ to reach the maximum number of clients for the platform. Finally, to address scaleability of the Lisk blockchain, Lisk have enlisted the help of ‘SocketCluster.io’; an open source scaling protocol for the blockchain and communications industry.
Lisk has both a professional approach to development, evidenced by their large and growing development team; but also they show a real commitment to marketing activities and bringing tangible products to users and developers. Lisk’s strong development so far, and their listing on several high profile exchanges, make it easy to both buy LSK tokens as an investor, and likewise to develop on the Lisk platform. Lisk’s use of sidechains and delegated proof of stake creates a fair and robust network, which can scale and allow many developers to build exciting new DApps within the Lisk ecosystem.
Lisk is currently trading at $5.30, down from an all time high of around $35.00 in January 2018. The upside potential for Lisk is therefore quite high, and during the next bull market period, should Lisk continue fulfilling their current development goals, investors could want to have a position in Lisk.