I was asked to take a look at Lockchain and put a price on its end of year value for 2018. I normally don’t go down the route of trying to evaluate a business price but as I was asked I thought I would give an estimate along with my reasoning behind it.
The first thing about LockChain is its competitor AirBnB currently sits at over $31bn in value from information I came across and Lockchain is currently only worth around $20m. Which you may say but AirBnB is already up and running and I would agree. But the fact that there is $20m of value in LockChain gives it a pot of gold to start with and in a tech led business which will have reduced overheads as primarily its about keeping a smooth website, prices down and solid marketing. It isn’t reinventing the wheel, it isn’t telling us its going to invent a new tech that we have never heard of before. It is utilising a solid business model in a $500bn industry. Along with the fact that Lockchain wants to charge 0% fees compared to AirBnB’s 20% (Could be higher if talking currency changes as well).
Then we get to market cap which is not only low but 50% of it is locked in as 25% is for the team which has a 12 month no sale window and the other 25% is for future developments. Which basically means the 50% currently on the table is the trading value on the exchanges and where I can see its price around $2 seeing some significant growth. Why? The team need to push the project through there is no early pump and dump then move onto the next project they are locked into it and the better the company performs the more likely they are going to see their 20% grow in value considerably.
The LOC token is also used on the platform which means it will add value once it gets into circulation of renting out properties and hotel rooms as demand will keep buying and selling the tokens within its own space. Adding to that being in Crypto full-time I don’t actually have that much FIAT these days unless I actually want to buy something in the real world so for me going to an exchange and buying LOC to pay for hotel rooms is ideal.
The value of LOC is going to see growth as the demand goes up for use on the platform which also means you are going to see people holding onto LOC as well as seeing the benefit from when you ordered a room to when you pay for it. As you could find it has gone up 15% during that time making the room cheaper (Tokens worth more). Then you have the fact they cannot create more tokens out of thin air as you will find that the tokens require ETH to generate more. I am not 100% about the process but assume it has to generate at market value so you would need for example $2 of ETH to pay for $2 worth of LOC.
Then we get to the fact it doesn’t need the crypto space even though it has over 25,000 people already interested from it in using the service. The reality is that you can pay in FIAT as well which gets me back to the $31bn value of AirBnB as the company cannot lock you in to one provider. So there is nothing to say that LockChain ends up with even just 10% of the clients and customers of AirBnB that it will see massive growth.
Which gets me to my evaluation of LockChain for December 2018 which was the original question and I have analyzed this for 8 hours going through different bits of information to come up with a figure. Lockchain are aggressively going on exchanges right now and chasing down new ones which improves liquidity. But ultimately it also creates its “shop” in many locations for trading LOC to use on their platform. If the marketing is done right and the drive continues the way it has done along with the website going from Alpha to Beta in a short space of time. I could see LockChain worth $10 in 12 months ($100m) even this is a conservative estimate as quite simply the volatility of the crypto markets could see some bull runs based on delivery. For example goes from Beta to real world and pumped on Twitter etc. the price could jump to $6 then suddenly we find that people jump on it thinking its going to keep going and within a day its $10 and above. But conservatively there may be some retraction if it jumps above $100m but I would suspect in 2019 that growth would continue and within 5 years it could be worth more than $500m a year. As AirBnB came from nowhere and nothing to say Lockchain won’t do the same as its mainly about the promotion and getting it in front of people.
At the same time the fact that AirBnB is so well established will be the initial threat but already 100,000 hotels have signed up with LockChain so it is already off to a good start, get a few landlords signing up and advising their clients to use the site over AirBnB you start to see the client base grow rapidly. As well as the fact there is already over 25,000 crypto people interested in using the service once it rolls out. All this before it even gets started and I myself will gladly promote the service once it is live for yet another venture that takes Crypto in the FIAT world.