Fundamental Analysis – PascalCoin (PASC)

Disclosure: Cryptocurrencies’ valuations are highly subject to the market’s whims. Predicting the timing and extent of a cryptocurrency’s appreciation with accuracy is a futile exercise. Consequently, any scoring assigned herein does not imply a confidence in the probability of long-term appreciation. Rather, such scoring simply serves as a broad gauge of a project’s fundamental quality and its potential for price upside. In view of this, any scoring and recommendation here are not be considered as definite. Never invest more than you can afford to lose since any investment in the cryptocurrency market is extremely high risk.

PASCAL COIN (PASC)

Recommendation (Bottom Line Up Front)

PascalCoin is a technological marvel but rampant misunderstandings from the outside threaten to undermine the project’s credibility.

  • High risk, high return
  • Holding period: 5 years

*Block Society’s Fundamental Analysis scoring template was adjusted on 8/11/2019 to reflect Network Effects as one of the criteria. The score was decreased from 29/30 to 26/30 as a result.

OVERVIEW

“PascalCoin’s technology revolves around the SafeBox which yields competitive advantages such as the ability to securely delete history.”

analysis

TECHNOLOGY

Introduction

PascalCoin is an innovative cryptocurrency launched in late 2016 that departs from the traditional blockchain model to achieve avant-garde results. As one might guess from the name, PascalCoin is written in the Free Pascal programming language and it is one of the few projects in the cryptocurrency sector that was completely coded from scratch1.

PascalCoin brings many innovations to the table, all of which fall under the umbrella of a fundamentally different blockchain paradigm: the SafeBox. Similar to how the Directed Acyclic Graph2 (DAG) platform was notated as an alternative framework to a traditional blockchain, the SafeBox presents an alternative and a likely superior framework.

The SafeBox enables full cryptographic integrity and security without requiring nodes to keep the entire history of the blockchain. While there have been approaches adopted by other cryptocurrencies to regulate blockchain memory growth such as pruning, checkpointing, and implementing a light node, there is still a fundamental difference. PascalCoin nodes can prove they are on the chain with the most Proof-of-Work in a trustless manner and without the infinite history; other cryptocurrencies’ nodes cannot do the same. For example, Bitcoin Cash implements “hard checkpointing” in which power is given only to nodes with the infinite history. This is not the case with PascalCoin.

The SafeBox is a cryptographic data structure that serves as a recurring snapshot of all account balances. Each snapshot is linked cryptographically to the last few blocks and the previous snapshot while all the previous transaction history prior to those is deleted. As long as users have the SafeBox (currently ~50 MB), they have verification of their account balances. This snapshot of account balances is cryptographically verified by cumulative Proof-of-Work which means that even though all of transaction history is deleted, the PascalCoin node is still tantamount to a full node in terms of security.

At first glance, it appears that the PascalCoin blockchain would lose valuable information by deleting history and become vulnerable to a hypothetical 51% rollback attack even though the account balances are fully verified. This is where the Account Seal3 (implemented in the next version) comes in the picture. Each PascalCoin account (PASA) has an Account Seal that can be used retrieve any historical information even after it was deleted by linking each account state to its previous state and so on. In other words, not only can blockchain history be deleted without any security tradeoff but it can also be retrieved efficiently if needed without any security tradeoff as well.

To ensure the cryptographic data structure of the SafeBox remains compact, PascalCoin accounts (PASAs) are commoditized. This means it costs a minimal fee to initially acquire a PASA to prevent systematic abuse. Dynamic PASA issuance (future version), layer-2 addresses (future version), decentralized governance, inter-blockchain PASA transactions, atomic swaps (next version), and free foundation donations are few of the many ways the PascalCoin team has or are implementing to prevent the PASA price from increasing through adoption. One neat result of PASA commoditization is that PASA addresses are only few digits (e.g. 6578-75) and they can also be given unique, blockchain-based names (e.g. “Pizza”) that no other user can take. At the current rate of PASA growth via mining, it is estimated that the SafeBox memory size will be only few GBs after a hundred years which presents quite a contrast with other blockchain sizes’ growths.

PascalCoin also pioneers other remarkable features including the SafeBox’s “infinite” scaling (to be covered in the Scalability section), RandomHash4 (to be covered in the next section), and SafeBoxRoot5 (implemented in the next version). The SafeBoxRoot is the SafeBox version of light nodes but it also implements other important innovations. In particular, light nodes handle nearly all their load themselves without burdening full nodes which would otherwise present a problem in a global adoption scenario. Smart contract applications via PascalCoin’s payload system (i.e. byte field) is the focus of the next version. Although PascalCoin has in-protocol mixing for privacy that is augmented by its anonymous PASA transfers, it has not been fully implemented yet and more comprehensive privacy R&D still ongoing.

Decentralization

Most PascalCoin users operate nodes since their memory footprints are minimal thanks to the SafeBox. This enables full peer-to-peer connection instead of routing through few nodes like most cryptocurrencies. This heightened node connection is in line with the ethos of decentralization.

PascalCoin was launched fairly without any premine, instamine, or ICO. To have made significant technical progress since its launch without any initial funding support is impressive. The community voted and approved for 20% of the mining rewards to continue funding the project’s development. Any major community decisions are transparently voted upon to ensure fair governance. The exact decentralized autonomous organization (DAO) logistics, however, still have not been fully fleshed out yet.

To many, the idea of an ASIC resistant cryptocurrency is akin to a fairy tale. Countless projects over the years have proposed, implemented, and failed with ASIC resistance. The Vertcoin (VTC) project was widely touted as ASIC resistant but then was hijacked by ASICs last year. Monero (XMR) is currently executing a last-ditch effort to get rid of ASICs off its network with its RandomX algorithm. Sometimes only time can tell if ASIC resistance is achieved. A proved, battle-tested, and long-term ASIC resistant algorithm would require extraordinary technical sophistication.

PascalCoin’s RandomHash algorithm, a brainchild of Herman Schoenfeld, may be a candidate for true ASIC resistance. Not only does RandomHash claim ASIC resistance but it also claims GPU resistance on behalf of CPU mining only. The technology behind RandomHash is beyond the scope of this review but the reader can refer to the 22-page RandomHash whitepaper6 devoted solely to the algorithm as well as its Protocol Improvement Proposal (PIP)7. Additionally, an updated version of RandomHash is planned for the next version (V5) – not as a response to a negative incident per se – with an even stronger ASIC resistance.

The only currently visible downside of the RandomHash algorithm is that mining pool centralization still exists to a degree, but the barriers to entry for any mining pool – backed by CPU miners (i.e. laymen) instead of ASICs – to gain traction were dramatically lowered.

Scalability

The SafeBox enables a new tier of scalability through two effects from its design. First, the SafeBox makes blocks with humongous memory possible because the blocks can be deleted. For example, the Bitcoin protocol has each block’s memory size fixed at 1 MB; PascalCoin does not have the set block size which means it can scale up as much as possible because the block can be deleted securely. Concretely, this means that there is essentially no bottleneck in processing transactions. This lack of a bottleneck, in turn, leads to another substantial benefit – one zero-fee transaction per block for each user. There is no fee bidding competition among miners because the block size is basically unlimited, thereby driving the fee cost to zero per block.

Secondly, the SafeBox as a credit/debit equilibrium accelerates transactions. Since the SafeBox is stored compactly in memory compared to how a traditional blockchain searches in a database on a disk, transactions in the SafeBox are practically instantaneous. Although PascalCoin has a 5-minute block time, 0-confirmation transactions are secure due to 1) how any double-spending transactions will all be in the same block, 2) running PascalCoin’s nodes (with negligible memory) are far more secure than any other cryptocurrencies’ light nodes, and 3) a geospatial API can offer guarantee within 10 seconds at no fee.

PascalCoin claims being capable of doing 72,000 transaction per second (TPS). It could be increased at least tenfold to 720,000 or over thanks to the Account Seal technology that reduces the number of blocks needed to securely mutate the SafeBox. But this measure is meaningless since there are other bottlenecks unrelated to the blockchain such as network latency that ultimately determine the final TPS. The final TPS – not theoretical or testnet – is usually much lower. For example, the EOS cryptocurrency is widely touted as being ultra-scalable thanks due to its centralized Delegated Proof-of-Stake (DPOS) design; in reality, many simulations have shown the EOS blockchain performing just under 1,000 TPS. PascalCoin, on the other hand, has been shown to perform a bit above 1,000 TPS. This is especially impressive considering that PascalCoin has a highly decentralized design compared to EOS.
GROWTH 

Future Research & Development

PascalCoin’s Github page has been consistently active since day one. Two core developers, Albert Molina (founder) and Herman Schoenfeld, have been the driving force behind PascalCoin’s development. Their skillsets are of the very highest caliber in the blockchain community. However, they have had serious clashes in the past involving rebranding, foundation incorporation, leadership philosophy, and workflow which pose a risk for the project. Herman in particular could be viewed as the wild card in which his future contributions are uncertain. Both developers have significant stakes in the project and are unlikely to abandon it – at least entirely. At least 5 other developers exist for this project but are mostly assigned to non-core development (mining software, libraries, etc.).

PascalCoin’s future technical milestones are challenging but doable to implement. It does not help that most developers do not know the Pascal programming language. It is worth noting that the Pascal language is only used for the core codebase; any external application (dapps, wallets, etc.) of PascalCoin can be written in any language. Upon version 5’s completion, the core codebase would be considered mostly completed. While a strong roadmap exists for PascalCoin as viewed on the website’s front page, it remains to be seen if the core developers will continue working side-by-side without any setback and whether PascalCoin would be able to attract additional Pascal core developers.

Network Effects

PascalCoin has not found any real-world adoption at this time and its volume – usually limited to up to $10K daily – has been bouncing up and down within the bottom 10 projects on Poloniex. However, its standing with Poloniex gives it a certain amount of access and credibility. It has about 8,000 followers on its Twitter page and its main community is found on Discord.
POTENTIAL PROFITABILITY
At the time of this writing, PascalCoin’s market capitalization is a mere $4.3 million. Such a low market capitalization is surprising considering PascalCoin’s technological spectacle. From a technical point of view, PascalCoin leads the pack in the cryptocurrency sector.

To gauge the future demand of PascalCoin, we should consider all the potential triggers:

  • Address scheme
    • In the future when cryptocurrency adoption is commonplace, surely the public would benefit from an easy to use address scheme instead of the ~50 character address used. PascalCoin’s dual addressing scheme (few digits and/or a unique name) would be an ideal solution.
  • No fee for each transaction per 5 minutes
    • The value of Nano (formerly RaiBlocks) soared to the stratosphere in 2017 thanks to its hype of zero fee. Similarly, PascalCoin may have the potential to join this bandwagon in the future.
  • Proof of a successful ASIC resistant algorithm
    • The number of serious and successful ASIC resistant projects is low, if not nonexistent. The cryptocurrency community’s interest and research for genuine ASIC resistance may or may not showcase RandomHash as a successful candidate.
Yet the most powerful potential trigger for PascalCoin’s price rise may actually be how its blockchain size is bounded forever. The only other projects that have touched this topic are Coda Protocol, which is still in its initial developmental stage, and – surprisingly – Facebook’s Libra. There could possibly be a hype tsunami if Facebook implements this feature successfully and the public attempts to find similar comparisons currently existing in the cryptocurrency sector.
The reality is that the blockchain size must be contained securely in any mass adoption scenario. Look no further than the chart below of Ethereum’s blockchain size growth7:
Ethereum’s blockchain size was 1.1 TB on May 14th, 2018 (currently higher than this today). But Ethereum has not even scratched the surface of mass adoption. What will the blockchain size look like once a project reaches mass adoption? If the blockchain memory size is not solved, profound centralization and high fees are some of the inevitable consequences. Ethereum’s sharding roadmap does not absolve the need for archival nodes and only kicks the can further down the road. PascalCoin does not have this issue and that by itself is a powerful trigger for PascalCoin’s buying pressure in the future especially when cryptocurrency adoption is achieved. As a result, a long-term time horizon of 5 years is recommended for PascalCoin.
 
For the short-term to medium-term time horizons, certain events could help push PascalCoin’s price higher:

– New wallets

  • One of the main issues with PascalCoin was its user-unfriendly wallet. As of few days ago, mobile wallet apps for Android and iOS were released. A revamped desktop wallet and a web wallet are also on the way.

– Potential rebrand

  • There has been heated discussions of a rebrand lately as the name “PascalCoin” is a sore point for the community. A rebrand, if it ever occurs, may go a long way in bringing awareness to the project.

– Version 5 release (hard fork)

  • Most of the version 5 features have already been implemented.
  • The ETA for the hard fork is roughly around the holidays.
  • Some of the features of version 5 include but are not limited to:
    • Atomic swap
      • Atomic swappable cryptocurrencies are an elite class of cryptocurrencies and this sends a positive signal to the broader community.
    • RandomHash2 (upgrade for RandomHash)
    • Account Seal
    • SafeBox root
    • Account data & data operation (used for smart contracts)
In conclusion, there are valid reasons to believe that PascalCoin will face a buying pressure at some point in the future. At such a low market capitalization, one has the opportunity to obtain a substantial amount of Pascals.

recommendation

PascalCoin is a project that truly fits the profile of a “hidden gem” with unique and transformative technology that does not get the attention it deserves. While there are substantial risks to consider especially with respect to Poloniex’s hypothetical delisting and the small community of Pascal developers, the risk of not investing in projects that do not deliver innovative solutions necessary for mass adoption may be equally as great. At a low market capitalization, PascalCoin currently offers an excellent entry point for a long-term hold.

analysis of alternatives

 

Poloniex, the primary exchange for PascalCoin, has been delisting multiple projects in the last several months especially those suspected as securities. PascalCoin would suffer a setback if Poloniex delists it. Such a scenario could conceivably occur because of PascalCoin’s low volume. Although other lesser known exchanges exist for PasclaCoin beside Poloniex, none bear the credibility and volume that Poloniex does.  

 

There has been a strong bias against the Pascal language as used in PascalCoin especially from newcomers who are unfamiliar with the project. Free Pascal has evolved far beyond the time of Turbo Pascal and it is a robust programming language on par with modern programming languages except for its limited community in terms of developers and library support. One potential advantage of PascalCoin using the Pascal language is how launching clone projects is more challenging as a result. Unfortunately, the project’s roadmap could be stalled – due to the small Pascal community – if one of the core developers (e.g. Herman Schoenfeld) leaves the project.

source summary statement

Block Society has high confidence in our assessment based on the two whitepapers, three of the project’s Protocol Improvement Proposals (PIP), and the author’s engagement with the development team on the Discord channel. As the development team does not adhere to any specific timelines, we will update the contents of this analysis should material information about the development progress arises.
DISCLOSURES
  • Tyler Swob, a Registered Investment Advisor under Block Society, was one of the contributors to PascalCoin’s whitepaper as well as to multiple PascalCoin community initiatives. PascalCoin is a part of Tyler’s personal investment portfolio.
  • Block Society’s Fundamental Analysis scoring template was adjusted on 8/11/2019 to reflect Network Effects as one of the criteria. The score was decreased from 29/30 to 26/30 as a result.
SOURCES
 
  1. “Search Cryptocoins.” Cryptocoin. http://cryptocoin.io/search.php?forkedfrom=Written%20from%20scratch (accessed July 25th, 2019)
 
  1. “Directed Acyclic Graph.” BitcoinWiki. https://en.bitcoinwiki.org/wiki/Directed_acyclic_graphs_(DAGs)#DAG_Disadvantages (accessed July 25th, 2019)
 
  1. Schoenfeld, Herman. “PIP-0029.” Github. https://github.com/PascalCoin/PascalCoin/blob/master/PIP/PIP-0029.md (accessed July 25th, 2019)
 
  1. Schoenfeld, Herman. “PIP-0009.” Github. https://github.com/PascalCoin/PascalCoin/blob/master/PIP/PIP-0009.md (accessed July 25th, 2019)
 
  1. Schoenfeld, Herman. “PIP-0030.” Github. https://github.com/PascalCoin/PascalCoin/blob/master/PIP/PIP-0030.md (accessed July 25th, 2019)
 
  1. Schoenfeld, Herman. “RandomHash Whitepaper.” https://www.pascalcoin.org/storage/whitepapers/RandomHash_Whitepaper.pdf (accessed July 25th, 2019)
 
  1. “The Ethereum-blockchain size has exceeded 1TB, and yes, it’s an issue.” Hackernoon. https://hackernoon.com/the-ethereum-blockchain-size-has-exceeded-1tb-and-yes-its-an-issue-2b650b5f4f62 (accessed July 25th, 2019).

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