In essence, Swarm City (SWTI) is another project that tries to combine social media and cryptocurrency on the blockchain. To that end, Swarm City is offering a blockchain-based marketplace with a built-in reputation system.
The hope is that users will communicate and transact without third-party obstruction. In other words, Swarm City is yet another attempt to kill the middleman and place the consumers in charge of a decentralized marketplace.
In fact, Swarm City aims to enable anybody to create a decentralized marketplace known as a “hashtag.” Plus, users will create decentralized communities based on economies of scale.
Thus, a group or organization of people will establish a reputation and profit it from through Swarm City. Interestingly, Swarm City combines an avatar with a wallet.
What the name Swarm City has to do with this process is beyond me. I think Swarm City sounds like a bad American horror movie. In particular, there was a wave of killer bee movies in the 1970s that set new lows for bad cinema.
Swarm City (SWTI) is a completely decentralized marketplace
The Swarm City (SWTI) Tokens are an Ethereum-based or ERC token used on the Swarm City decentralized marketplace.
Theoretically, nobody can stop anybody else from buying, selling or trading on Swarm City. Hence, Swarm City functions as a payment system besides decentralized marketplace.
The long-term plan at Swarm City is to build a blockchain decentralized marketplace that functions like a real city. Notably, entrepreneurs will set up stores called Storefronts to transact business.
What is Swarm City (SWTI)?
Thus, the developers intend Swarm City to be like Amazon or eBay, an online marketplace, or the structure of an online marketplace. However, it is not clear what exactly is for sale at Swarm City.
Currently, Swarm City users can purchase a wide variety of services. For instance, a person who needs a ride or a software developer can hire that service on Swarm City.
In addition, there appear to be two proprietary tokens: Swarm City and Arcade City associated with Swarm City. However, only the Swarm City Token (SWTI) is a traded cryptocurrency.
Swarm City supposedly ensures the reputation and offers payment in US Dollars, Bitcoin (BTC), Euros, or Ethereum (ETH). However, it does not look as if Swarm City will create an economy of scale with its technology.
Why Swarm City (SWTI) may not work
Notably, Swarm City’s proposed economy of scale runs straight into the blockchain scalability problem.
Simply put, most blockchains have a limited size that creates a speed and volume limit for blockchain. For instance, all the encryption limits Bitcoin (BTC) to 3.3 to seven transactions per second (tps) depending on whom you ask. On the other hand, Ethereum (ETH) is limited to 15 to 20 tps, depending on the critic.
Therefore, Swarm City’s hashtags and blockchain could crash if over 15 people try to use it. Swarm City (SWTI) could crash because they base it on the Ethereum blockchain.
Could EOS make Swarm City (SWTI) Tokens Scalable?
Thus, using the Ethereum and tokens limits Swarm City (SWTI) to 15 to 20 transactions per second. Obviously, Swarm City will be of little value to entrepreneurs if it is not scalable. However, Swarm City could scale up by utilizing the EOS (EOS) blockchains.
Interestingly, a major EOS investor Michael Novogratz claims EOS could process up to 5,000 transactions per second, ETH News claims. To clarify, Novogratz, a hedge fund big wig, has presented no proof for these claims.
Though if Novogratz’s claims are true, EOS could be capable of helping blockchain platforms like Swarm City achieve their goals. In addition, there are efforts like the BancorX protocol which are trying to enable easy convertibility between EOS (EOS) and ERC (Ethereum Request for Comment) tokens like SWTI.
Swarm City Tokens (SWTI) Value is Questionable
In particular, BancorX offers decentralized liquidity across blockchains and it will support both Ethereum and EOS. In detail, Bancor offers liquidity networks for Ethereum and EOS. They design a liquidity network to make it easy to cash an ERC or EOS token out for a spendable currency.
Hence, I do not think Swarm City’s proposal decentralized marketplace will be viable without the decentralized liquidity offered by BancorX and the scalability of something like EOS. Without such capacities Swarm City’s (SWTI) value is questionable.
However, Mr. Market assigned the Swarm City Tokens (SWTI) some value. For instance, SWTI had a Coin Price of 12.99¢ and a Market Capitalization of $1.085 million on 10 January 2019. In addition, Swarm City Tokens had a 24-Hour Market Volume of $17,835 and a Supply of 8.343 million on the same day.
Hence, Mr. Market overvalues Swarm City (SWTI) because there seems nothing happening with this crypto asset. I would advise speculators to stay away from Swarm City until its developers demonstrate a working platform.