As a token that has recently broken into the top 25 with regards to market cap, GNT shows a lot of promise.

(Source: CoinMarketCap.com)

The Golem Project began development in 2014 and was officially incorporated under Swiss law in 2016 in Zurich, Switzerland. Most of the company’s team members reside in Warsaw, Poland. Golem is an open source, decentralized supercomputer that anyone can access. It’s made up of the combined power of user’s machines, from personal laptops to entire datacenters. It’s often described as the “Airbnb for computers”, and is built on the Ethereum blockchain. I highly encourage anyone interested in the project to read their white paper in its entirety.

Golem aims to be the first decentralized supercomputer, creating a global market for computing power. Combined with flexible tools to aid developers in securely distributing and monetizing their software, Golem changes the way computing tasks are organized and executed. The function of Golem as the backbone of a decentralized market for computing power can be considered both Infrastructure-as-a-Service (IaaS), as well as Platform-as-a-Service (PaaS). However, Golem reveals its true potential by adding dedicated software integrations to the equation. Any interested party is free to create and deploy software to the Golem network by publishing it to the Application Registry. Together with the Transaction Framework, developers can also extend and customize the payment mechanism resulting in unique mechanisms for monetizing software.

Golem is set to become a key building block for future Internet service providers and software development. By substantially lowering the price of computations, complex applications such as CGI rendering, scientific calculation, and machine learning become more accessible to everyone.

(Source: Golem White Paper)

One of the most common concerns people have when trying to understand the price of the Golem Network Token (GNT) can be viewed here (pulled from Reddit):

“In theory Golem has a lot of potential — but will it ever get to the value of Ether or BTC? At first I didn’t see a reason it couldn’t, but after reading their white paper it sounds like the value of the Golem network is to bring the cost of supercomputing down to a level that it can be afforded by the common user. It also sounds like their business model is to accept their coins back as payment for using the golem network once it’s built. So if that’s the case, in order to keep low cost supercomputing affordable, the coins themselves have to stay at a reasonably low price. Therefore the higher the value of each GNT coin, the less available the Golem network becomes for their “common user” target market.”

Why the concern is invalid:

Tokens are divisible and requesters/providers set their own prices for computation.

“If someone buys 50 USD of bitcoin or 50 USD of GOLEM… how much USD does he have. 50 USD. It doesn’t matter how high the value of one coin will be. What matters is how much a task will cost… 1 GNT, 0.1 GNT, 0.00005 GNT and how it corresponds to the market. If 50 USD is equal to 0.005 GNT and 0.005 GNT is required for one task. One will just buy the fraction of a coin that he needs for his computational task.”

Market Size

CGI Rendering is currently a $1B market and estimated to grow to a $3B market by 2022 (according to MarketsandMarkets.com). The Golem team calculated the CGI Rendering market to be $200M in 2016. Public rendering farms used today can be seen here. Golem could cause rendering farms to lower their prices as in any other competitive market, but it’s also possible that rendering farms decide to integrate Golem into their platforms.

CGI Rendering is mainly being used as a Proof of Concept. Other markets include:

· Crypto-mining with the potential to be integrated into Proof of Stake (check out)

· High Performance Computing (HPC)

· Architecture/Design

· Video Rendering

The size of the HPC market is $28B and expected to hit ~$35B by 2020 (source: MarketsAndMarkets.com). The market size for Golem in general is obviously massive, so I didn’t want to spend much time here. It’s also likely that many of Golem’s use cases haven’t been thought of yet, and I look forward to seeing unique, creative applications that developers will think of in the coming years.

Technology Traction & Roadmap

They have been working on their first product “Golem Brass” for the past year, and you can see the entire roadmap in the picture below.

· Golem Brass will be for CGI Rendering.

· Clay Golem will introduce a Task API, allowing developers to integrate with Golem and create new use cases for it.

· Stone Golem will provide up upgraded version of Clay Golem with improved security, stability, and functionality. This version will also allow Golem to be used in a SaaS model by businesses.

· Iron Golem will be the final version of Golem, where developers can easily build applications on top of the platform.

(Source: Golem White Paper)

There are many solutions that could potentially be used as a part of Golem’s ecosystem, either directly or as extensions. The following systems will be considered for integration and their implementation will be dependent upon the release of production code and complexity of integration:

· Payment channel solutions based on P2P routing and transactions, eg. Raiden or multi-party payment channels;

· External decentralized identity services, e.g. uPort;

· External solutions for task verification or reputation, eg. TrueBit;

· External solutions for storage, eg. FileCoin, Swarm.

Competition

SONM.io (Supercomputer Organized by Network Mining) — Built on Ethereum chain, founded in 2016, and HQ in Moscow, Russia. Versus doing cloud computing like what Golem is doing, it is doing “fog computing”. Fog computing is a term created by Cisco that refers to extending cloud computing to the edge of an enterprise’s network. Also known as Edge Computing or fogging, fog computing facilitates the operation of compute, storage, and networking services between end devices and cloud computing data centers. SONM.io ICO’d in June 2017 and raised roughly 117,000 ETH.

Gridcoin — Main difference between Golem and Gridcoin: Golem aims to be an arbitrary compute network while Gridcoin exists to finish BOINC projects. The Berkeley Open Infrastructure for Network Computing (BOINC) is an open-source middleware system that supports volunteer and grid computing. It has become generalized as a platform for other distributed applications in areas as diverse as mathematics, linguistics, medicine, molecular biology, climatology, environmental science, and astrophysics.

BOINC aims to enable researchers to tap into the enormous processing resources of multiple personal computers around the world. Gridcoin rewards BOINC computation using the Distributed Proof of Research (DPOR) reward mechanism, which is a combination of Proof of BOINC (POB) and Proof of Stake (POSv2). Harnesses the unused clock cycles from processors and graphics cards to attempt to cure cancer/aids/ebola/malaria, map the milkyway, crack enigma codes, etc. Sitting at about a $11M market cap (GRC).

Just based on the size of the subreddit, 8700 vs. 2200, the Golem has nearly 4x the community base of Gridcoin. That’s that thousands more poeple who are ready to plug their computers into the Golem network. Gridcoin is a transaction layer built over BOINC. BOINC is not limited to any particular kind of project, it’s perfectly fine for commercial use. Each project has its own server running to handle verification of work and publish results, yes. But it’s not “centralized” in any general sense. Gridcoin is also a full blockchain, not a token on Ethereum’s blockchain.

IEXEC — Founded in 2016 with HQ in France. iEx.ec aims at building a blockchain-based distributed Cloud, while Golem aims at building a worldwide supercomputer. It’s possible that iEx.ec and Golem could potentially partner in the future since both companies are competing against centralized cloud providers.

AWS and other large cloud providers can be viewed as competition also. Main difference is Golem will have measured amounts of compute power vs. the traditional subscription setup provided by the large cloud providers.

Rendering farms like Ranch Computing.

Team Members

Julian Zawistowski

Current:

· CEO & Founder at Golem Factory

Past:

· CEO & Co-Founder of iMAPP

· Chairman of the Foundation Council for Structural Research

· CEO & Co-Founder of Claimstorm

· VP at IBS

· Head of Unit at Ministry of Economy and Labour

· National Bank of Poland

Education:

· MA in International Politics & Economics at Warsaw School of Economics

Piotrek “Viggith” Janiuk

Current:

· CTO at Golem Factory

Past:

· Senior Developer at iMapp

· Senior Developer at Poland Firm

· Software Engineer at Lightcraft Sp

Education:

· MS in Computer Science & Mathematics at University of Warsaw

Aleksandra Skrzypczak

Current:

· Co-founder & Lead Software Engineer at Golem Factory

Past:

· Lead Software Engineer at iMapp

· Software Engineer at Red Ocean

Education:

· BS in Informatics at University of Warsaw

· MS in Mathematics at University of Warsaw

o Thesis on usage of Machine Learning in Social Media

Pawel Bylica

Current:

· Lead Ethereum Engineer at Golem Factory

Past:

· C++ Software Engineer at Ethereum (3 yrs)

· C++ Software Engineer at iMapp

· Software Engineer at Samsung Electronics

Education:

· BS in Software Engineering at University of Lisbon Nova

· MS in Computer Science at Wroclaw University of Technology

Andrzej Regulski

Current:

· COO at Golem Factory

Past:

· Managing Director at iMapp

· Evaluation Program Director at IBS

· Analyst at IBS

Education:

· MA in Economics at Warsaw School of Economics

Grzegorz Borowik

Current:

· Senior Software Engineer at Golem Factory

Past:

· Post-doc Research at Auckland University of Technology

· Professor at Warsaw Institute of Technology

· Software Engineer at Nventi

Education:

· MS in Engineering & Applied Mathematics at Warsaw University

· PhD in Computer Engineering at Warsaw University

· Management Program at UC Berkeley

Alex Leverington

Current:

· Network Programmer at Golem Factory

Past:

· Founder at Metagrid Systems

· Core Developer at Ethereum for 3 years

· VP of Architecture at Tantrum Street

· Software Engineer at Dialexa

· Consultant at Mobestream Media

· Software Engineer at Highform

· Senior App Developer at MileMeter

· Senior Developer at SoftLayer Technologies

· Project Engineer at Architel

Team also consists of 9 other software engineers listed here.

Funding Status

· ICO’d on November 11th, 2016 and raised $8.6M

· $256M Market Cap at $0.30/token (As of 7/12/2017)

· Exactly 820 million Golem tokens (GNT) in circulation given initially to crowdfunding participants

· Another 180 million GNT are not being traded on exchanges currently, and are held by a combination of the Golem team and the Golem Factory (company itself) to use in the future (60M team, 120M company)

· Bringing the total GNT created to 1 billion exactly

Exit Strategy

Whether a cryptocurrency acquisition would ever happen is still unknown, and how a cryptocurrency acquisition would work is still unclear, but it seems unlikely with Golem. Hypothetically, if Amazon were to acquire Golem, they would likely just acquire the team, all of their IP and infrastructure, but the tokens themselves would still be held by the same owners. Average return on a Token from ICO date to 12 months later is 10x. Interesting stat breakdown of ICO returns here. At Golem’s peak in June 2017, it had returned 66x in the first 8 months since ICO. Assuming you’re a long term investor in tokens, and not a trader, I recommend setting targets for when you sell “X” percentage of your holdings.

Summary

· Golem is dependent on Ethereum. If Ethereum were to get hacked and drop in value significantly, Golem would drop as well. On the flipside, if Ethereum becomes widely adopted, Golem could go up quite a bit.

· From a marketing standpoint, the fact that you can explain what Golem is to the average Joe in less than 30 seconds greatly helps with its adoption. Not a lot of tokens exhibit this trait. This also helps them out with regards to community building skills.

· Phenomenal team with regards to executing and keeping their heads down to focus on their product instead of hyping up their token and upcoming product releases like so many other tokens have done. (I’m a big fan of the Siacoin project’s vision, but the team spends way too much time on social media hyping up their upcoming announcements.)

· While CGI rendering is a massive market, it’s mainly being used as a proof of concept (although it would be sweet if James Cameron used Golem for the next Avatar). I think the bigger, more accessible market for Golem long-term is mining and high performance computing.

· Golem’s recent price drop is largely tied to Golem Brass taking longer than anticipated to be released and an overall dip in all cryptos.

Additional Reading

· Great read on the utilization of the GNT by Laura Shin here.

· Golem and Streamr announce partnership.

· Brass Golem Alpha2 0.7 released on July 11, 2017.

If there are any errors in this writeup, please comment and I’ll try to get them fixed ASAP.

Disclosure: I’m a holder of GNT.