You’d be surprised how much construction has to do with Tezos (CCC: XTZ-USD ).
“The critical path is the bottleneck route ,”according to Harvard Business Review.“Only by finding ways to shorten jobs along the critical path can the over-all project time be reduced.”
HBR added that, “the time required to perform noncritical jobs is irrelevant from the viewpoint of total project time.”
Exactly.I couldn’t have said it any better myself because, you know, it’s the Harvard Business Review.
According to Coinmarketcap.com, “Tezos is a blockchain network that’s based on smart contracts ,” not too dissimilar to Ethereum (CCC: ETH-USD ).
However, the kicker is that “Tezos aims to offer infrastructure that is more advanced — meaning it can evolve and improve over time without there ever being a danger of a hard fork.”
Further, “People who hold XTZ can vote on proposals for protocol upgrades that have been put forward by Tezos developers.”
To use extremely simple language, it’s a superior version of Ethereum.
Tezos Not Demonstrating Critical Valuation
I’m impressed with the technical progression of the blockchain.
From the development of Bitcoin (CCC: BTC-USD ) proving the viability of sending secure, irreplicable digital coins and tokens through borderless and decentralized transactions, other projects have forwarded increasingly utilitarian networks.
If we could hand out economic awards for technical innovation, Tezos and other groundbreaking projects would haul in significant value.But the problem is that the critical path for capital valuations is apparently a completely separate topic from the critical path of technical innovation.
If Tezos is fundamentally superior to Ethereum, it should rise above the muck impacting other cryptos.Alas, it’s not that way.
With Bitcoin dipping into $35,000 territory, sentiment dragged down Ethereum.
And that sentiment dragged down Tezos, which over the trailing 24 hours is down below $3.
The way I see it, it doesn’t matter how advanced Tezos is over Ethereum or any other network.
If capital valuations represented a construction project, then blockchain utility is, to borrow HBR’s words again, part of the noncritical jobs that are “irrelevant from the viewpoint of total project time,” or in this case, project valuation.
As we’re watching from our own eyes, the crypto market appears heavily correlated with Bitcoin; where Bitcoin goes, so goes Tezos and most everything else.That very observation provides evidence that utility is not on the critical path of valuation.
To put it even more bluntly, don’t replace due diligence with magic blockchain words.
It’s the Net Impact That Matters
Typically when you buy a performance car, a salesperson will often brag about certain metrics like so-and-so many valves per cylinder and all that jazz.
At the end of the day, it doesn’t matter what those metrics are.Your (combustion) car can have four, six, eight or more cylinders.
What does it do zero to 60 miles per hour (or 100 kilometers per hour for our international audience)?
What’s the quarter-mile time and trap speed? How about the lateral acceleration? Sure, it’s nice to know magic automotive words just like it’s nice to know magic blockchain words.
Honestly, for most consumers, it doesn’t matter.
Nuanced automotive metrics are not on the critical path of performance.It doesn’t matter how many valves per cylinder you have — if your car is slow, it’s slow.
Likewise, it’s awesome that Tezos is superior to Ethereum.But for arguably most investors, it doesn’t matter unless those technical attributes contribute to the critical path; as in, will XTZ jump higher because of these wonderful attributes?
So far, the answer to the valuation trajectory question is to look at what Bitcoin’s doing.Well, that’s the same answer for every other crypto, which has me concerned.And it should have you performing some more due diligence.
InvestorPlace does not regularly publish commentary about cryptocurrencies that have a market capitalization less than $100 million or trade with volume less than $100,000 each day.That’s because these “penny cryptos” are frequently the playground for scam artists and market manipulators.When we do publish commentary on a low-volume crypto that may be affected by our commentary, we ask that InvestorPlace.com’s writers disclose this fact and warn readers of the risks.
Read More: How to Avoid Popular Cryptocurrency Scams
Josh Enomoto held a LONG position in ETH and BTC.
A former senior business analyst for Sony Electronics, Josh Enomoto has helped broker major contracts with Fortune Global 500 companies.Over the past several years, he has delivered unique, critical insights for the investment markets, as well as various other industries including legal, construction management, and healthcare..
