XYO (CCC:XYO-USD) cryptocurrency could be an interesting addition to a crypto portfolio as it will provide some balance. As I mentioned in my last article on XYO crypto, its network is one of the largest in the digital asset universe. It now has over 3 million nodes.
In fact, it calls itself “the geospatial oracle network.” By “oracle” it means that it can provide huge amounts of data from its node network to various users and for different use cases.
However, XYO crypto has a market capitalization of around just $417 million, according to its market statistics page on Coinbase Global (NASDAQ:COIN). That ranks it as the 147th largest cryptocurrency as measured by Coinmarketcap.com.
Where Things Stands at XYO Network
So, there seems to be an inherent discrepancy between its popularity and its market valuation. Over time this will likely correct itself, especially as the number of use cases for XYO crypto rise.
How does the network work? XYO has become popular through the ubiquitous Coin app — not related to the crypto exchange and NASDAQ-listed Coinbase Global stock. The mobile Coin app allows users to earn rewards, including digital assets. They earn the reward by “validating geospatial location data when traveling, commuting, jogging or moving about the real world while interacting with each other.”
Moreover, the XYO crypto token can earn people money by allowing owners to stake it and essentially earn the equivalent of interest. The network operators claim that this system makes its node network’s growth sustainable for the long term.
On Oct. 14, the company posted a major article on Medium in which they declared that XYO nodes had been downloaded more than 3 million times. That makes it “one of the largest blockchain node networks on Earth.”
As a result, it can provide incredibly valuable data to third parties. Now the challenge for the backers of XYO crypto is to find use cases for all the large amounts of data.
Use Cases for XYO
As I pointed out in my last article, XYO’s website discusses use cases such as airport luggage tracking, hospital equipment tracking, and insurance uses.
But the backers of the network also claim that its nodes provide more than just raw geolocation data. The Medium article where it announced more than 3 million node downloads also claims that the nodes can provide verification of its raw data.
This is based on its unique “bound witness protocol.” Here is how they describe this protocol:
“XYO self-verifies its data by corroborating sources. Parties using the network are referencing multiple sources for any given data-point. Devices act as witnesses for one another, each device verifying the data provided by the others.”
They call this “trustless verification” for the data submitted to users from the network. As a result, it makes the data much more valuable than just raw geolocation data.
Moreover, the fact that the number of nodes is continuously growing due to the reward system allows third-party users to be willing to use it more prolifically.
Where This Leaves Investors in XYO Crypto
After peaking at 8 cents on Nov. 6, XYO crypto tokens have been in a free fall. As of late Dec. 14, it was trading for 3.32 cents. That is a 58.5% drop in the XYO crypto price in just a little over one month.
That is a pretty daunting move and highlights the incredible variability (risk) with this relatively small cryptocurrency. It should make investors a little cautious. However, given how far and fast XYO crypto has tumbled, it presents a good investing entry point for long-term crypto investors right now. This makes it a good addition to any crypto investor’s portfolio of cryptocurrency investments.
On the date of publication, Mark Hake did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.