Electroneum Report

A thoroughly research review of Electroneum. This report was commissioned by Electroneum Ltd. and fully paid for by Electroneum Ltd.

Researched & written by:
Raz Peleg

Edited by:
On Yavin

Following this report On Yavin decided to join Electroneum as an advisor. However, the experience of working with Electroneum and doing more in-depth research left him disappointed in Electroneum’s management. He has since quit his advisory role.



This report was commissioned by Electroneum Ltd. and fully paid for by Electroneum Ltd.

None of the content in this report is or should be interpreted as investment or financial advice.

Cointelligence has hand-picked several subjects which we aimed to cover as broadly and as professionally as possible.

Introduction to Electroneum

Electroneum is a company which aims to enable individuals to send and receive digital payments and allow them more flexibility and autonomy in the way they deal with value transfer in their daily lives. More specifically, Electroneum is focused on attracting and retaining users in developing countries, allowing them to send payments to one another, top up their cellular SIM card balance and as of late, to participate in the company’s newly launched AnyTask peer-to-peer task marketplace.

Electroneum uses an array of software solutions it developed and deployed, including its own blockchain-based payment network and token - ETN; an easy-to-use mobile app and the AnyTask marketplace.

This report will analyse the company’s operations and endeavors in an attempt to provide a clear view of the company, the ecosystem and the communities that it creates and maintains and in an attempt to establish a clear, unbiased picture of the company and its operations.

Before we begin - a quick clarification on terminology

  • Electroneum: the company Electroneum LTD, registered in the UK; also “the company”
  • ETN: the token, existing as part of the Electroneum blockchain network; also “the token”
  • The Team: The persons working for Electroneum LTD, as portrayed here
  • AnyTask: The online marketplace developed in close association with Electroneum and operated by AnyTask LTD


Electroneum’s goals, as we see them, are as following:

  • Establish, maintain and develop a payment network to allow individuals and small business owners to transfer money between themselves easily, quickly, and cheaply. The initial focus is on doing so in developing
  • Provide individuals with convenient methods to utilize their money in the digital

And in turn, the company’s aspirations in our view:

  • To bridge the gap between individuals in developed and developing countries, allowing the latter more access to markets previously inaccessible to
  • Provide an alternative to larger traditional corporations who offer similar services out of a belief that Electroneum’s services are more beneficial to the user, and in places where these services are not offered - pioneer

Our Take

Electroneum’s goals are no easy feat to accomplish by anyone’s scale. To achieve even the most basic of its goals - maintaining a successful digital payments network - would be an extremely difficult task, though not impossible. After taking a close look at Electroneum, its metrics, data and various other facts, we believe it is one of the companies with a real chance to succeed among the crypto companies existing in the industry. Let’s start by taking a quick look at the company’s history, followed by our interpretation of it, to get a better understanding of its earlier moves and how the company and its products grew to become what they are today.


Electroneum was founded around August 2017, and very quickly set out to raise funds using an ICO, running from Sep 14th until October 20th of that year. During the ICO, Electroneum sold 6.3 billion of its tokens, also called Electroneum, at a nominal price of 0.01 USD per ETN. Taking into account all bonuses and promotions offered, Electroneum managed to raise $40M worth of funds using cryptocurrencies. At the time of writing, ETN is trading for $0.004, signifying a 60% decrease in value since the ICO, with the extremes being an ATH of $0.185 / ETN on January 7th, 2018, and ATL of $0.003 on November 25th, 2019.

A note on token prices - In early 2020, after more than two years of token-based projects operating in the market, we know that token price often is severely detached from the actual value captured by the networks affiliated with the token. In simpler terms, token prices and their variations often give zero insight as to the quality of the project behind them - for better or for worse. Knowing this, our mindset going into this report is a “clean slate”, with no preconceptions of the company and their journey. We suggest that our readers follow suit.

Initially, Electroneum launched its cryptocurrency - also called Electroneum - on an independent blockchain-based network. Electroneum or ETN was the native token on the network and consensus was reached through a Proof-of-Work mechanism, similar to well-known networks such as Bitcoin or Ethereum. The security of the network was attributed to the amount of hashpower contributed by miners and they received compensation in the form of newly minted ETN as the block reward alongside transaction fees. This network’s mining algorithm was CryptoNight, an algorithm popularized by the Monero network and designed to be more ASIC resistant than other mining algorithms of the mid-2010s, favoring “home mining” by enthusiasts, out of a belief that it will provide true decentralization.

However, by mid 2018, the CryptoNight algorithm was no longer ASIC proof. Bitmain - the world’s largest mining equipment manufacturer at the time - had managed to manufacture and sell ASIC miners who efficiently mined the CryptoNight algorithm, proving once more that this is a game of cat-and-mouse: if the algorithm is profitable to mine, a large and smart enough market player will capitalize on the opportunity and eventually come out with a product that fits the demand.

Eventually, having de-facto control of the Electroneum network, Electroneum (the company) decided to make radical changes to the infrastructure of the network.

The change took place on July 7th, 2019 and was primarily a move from the Proof-of-Work based blockchain to a new type of blockchain whose state is determined using a new type of consensus mechanism labeled by the Electroneum team as “Proof-of-Responsibility”.

Throughout the lifespan of the company, network and token, the Electroneum team has worked to promote usage of the token as a means of payment, increase its utility, and partner with companies and certain bodies to increase the token’s network effects. As it stands today, Electroneum as a network has achieved some of its goals and has managed to create organic growth, although its biggest challenges are still ahead of it.

Market Landscape

In order to determine which markets Electroneum participates and competes in, we first have to classify it as a project.

After careful consideration, we decided to break it down to two large subjects which are also different industries: Payment Token and Peer-to-peer marketplace.

Payment Token

From the beginning, Electroneum’s goal was to create a token that will act as a means of payment between two parties, specifically individuals, focusing more on peer-to-peer payments than on larger transfers of sums. It aims to be a currency in which you pay for everyday goods and services and enables people in developed nations to send some value to anyone in a developing economy, regardless of their banking status.

The Electroneum smartphone app allows for easy transfer of ETN between users. Namely, payments between users of the app receive instant payment notifications, rather than being subject to the lengthy waiting period associated with blockchain confirmations.. Electroneum achieves this by using a centralised custodial wallet system that retains the private keys of users’ wallets. When a transaction is requested and the payment is to an address belonging to another user on the system (rather than an anonymous blockchain address or offline wallet address), an instant payment notification is pushed to that other user’s smartphone. This works regardless of geographic distance; users need not be present in the same place to receive this instantaneous confirmation.

This aspect of Electroneum is the Payment Token aspect and was the company’s goal from the beginning. In entering such a market niche, Electroneum positions itself with two types of competitors, as we see it: Crypto-competitors and Traditional Competitors.

Crypto Competitors are tokens and project teams that have similar goals to those of Electroneum. They want their token to be used for everyday transactions and as the (tiring but true) cliché goes, “to use it to pay for coffee”. There are several competitors who employ crypto tokens to solve these problems. Some of them being Bitcoin, although the narrative around it has since shifted, Bitcoin Cash, plagued by governance and consensus issues, and other coins such as Litecoin, Verge, DASH, XRP, XLM and more.

We’d like to focus on OmiseGo - one of the earliest crypto projects still operating today, and one of the earlier successful ICOs much like Electroneum. OmiseGo and Electroneum were launched as development projects at around the same time and so it’s interesting to compare their progress.

OmiseGo is an attempt to build financial infrastructure that would be capable of supporting very high throughput and large amounts of concurrent users. Essentially, it is the crypto answer to financial giants such as Visa and MasterCard.

Like Electroneum, OmiseGo aims at disrupting the infrastructure itself but is mostly focused on implementing their solutions at the merchant side rather than the consumer side where Electroneum chose to focus their efforts. Unfortunately, after more than two and a half years of development that was not well communicated to the OmiseGo community and a roadmap that initially was very exciting but proved very hard to accomplish within the given timeframes, there is substantial disappointment from the OmiseGo project. That is not to say it is a failure per se - the team is still working on delivering the infrastructure that was promised and is making slow but steady progress.

The two projects - OmiseGo and Electroneum - are comparable in the sense that they both aim to build financial infrastructure. As we’ll see in the Technical Infrastructure section of the report, this task proved more challenging than initially thought by the Electroneum team However, as exemplified by OmiseGo’s firsthand experience, we see that this is a problem that anyone who tries to build infrastructure from the ground up will inevitably face.

Interestingly, under “Crypto Competition” we can also find Stablecoins.

Electroneum is most definitely not a Stablecoin - it is not backed by anything other than the security of the network on top of which it exists, much like other crypto assets like Bitcoin or fiat currencies, while Stablecoins on the other hand (at least those in widespread usage today) are always reliant on some form of collateralization to both justify their value and keep it stable.

Stablecoins are also natural candidates for peer-to-peer value transfers, since they fit perfectly into the stable-value and speed that the modern customer comes to expect.

Today, the two stablecoins who we see have the largest chance of achieving network effects and capturing a large portion of the peer-to-peer payments market are USD Coin and DAI, whose value proposition is larger than meets the eye with much of the appeal coming from the fact that users effectively gain control of a savings account with an (relatively) astronomically high interest rate, 8% APR as of today, and its deep integration with the DeFi ecosystem.

MakerDAO and DAI’s major strength throughout their short lifespan is the value they managed to capture as the currency that facilitates payments and value transfer on top of the DeFi community and movement. This was done by making it easy to implement in other apps from a development standpoint and making sure the incentives of the system’s participants are aligned. However, MakerDAO’s system has many imperfections and shortcomings, stemming from its situation as an as-of-yet untested system at scale, like we’ve seen in the recent market crash where MKR holders experienced losses because of lacking protocol behavior.

Traditional Competitors are companies and services which simply want to facilitate payments between individuals and SMBs. This type of business saw a meteoric rise as part of the Fintech “boom” that took place in the latter half of the past decade and which sees fierce competition nowadays in several geographical markets. These markets are forced to be geo-based, since fiat money that most people interact and live with is still geographically confined due to the inefficiency of the global financial system, capital controls, government policies, and central bank policies.

The companies and services that we see as important players in this space are Venmo, the PayPal owned app that lets people transfer funds in a social way, and Square’s CashApp, which also allows users to invest in stocks in a friendly manner and even buy & sell Bitcoin.

If Electroneum wishes to eventually compete in this fierce market, dominated by huge companies with incredible resources, it must provide value to its users which is not only “as good as” one of the alternatives but significantly better to justify sacrificing the current comfort zone to make the switch towards a new ecosystem.

As of now, we do not see Electroneum moving towards competition in the Traditional Competitors category but rather trying to cement its place in the Payment Coins field, appealing to the “long tail” of money services consumers - individuals and SMBs in developing countries - and establishing infrastructure for future growth of the network.

Peer-to-Peer Marketplace

Recently, after Electroneum’s growth in developing countries, part of its strategy was shifted: In order to promote use of the cryptocurrency, the company decided to launch a peer-to-peer task marketplace called AnyTask. This marketplace aims to promote the use of ETN in actual business transactions, starting off in developing countries before expanding to more territories.

As it stands, AnyTask is one of the few cryptocurrency-based p2p marketplaces with the most advanced one currently being OpenBazaar - although OpenBazaar is not a direct competitor to Electroneum and is far from capturing significant market share in its own field.


On the non-crypto front, online p2p marketplaces have been evolving rapidly in the past few years and there are many examples of successful ventures such as Fiverr, arguably the largest online platform that connects people with knowledge & skills with customers who require their services.

AnyTask allows buyers to pay using debit and credit cards. The fees are held in escrow until the buyer and seller are satisfied, and the operation is staffed with human support to attempt to solve any disputes.

Buyers do not have to purchase cryptocurrency to make a purchase, giving AnyTask a larger marketplace of potential buyers. By insisting on purchase via credit or debit card, the anonymity or pseudonymity of cryptocurrency is removed from the buy-side. This is intended to prevent the platform from becoming a marketplace for illegal items, as we have seen from some marketplaces that have relied on cryptocurrency for payment and remittance. This is inline with Electroneum’s desire to be a regulated cryptocurrency.


AnyTask is initially targeting these groups of people: who want to do business and leverage their skills in a digital age with minimal financial limitations and whose demand is not met by these platforms. Therefore, we see AnyTask not as a competitor to these but rather an alternative to include more freelancers into the global economy.

Down the road, this approach can prove as a jumping board for AnyTask and Electroneum as a whole: if it manages to attract and retain a critical amount of users and create a real, valuable network effect - AnyTask could then be offered to the entire global community as an established marketplace with plenty of supply of competitively priced capable professionals, benefiting everyone in the equation.

Technical Infrastructure

Creating a new cryptocurrency is an ever-ongoing project of developing infrastructure and in Electroneum’s case, they decided to develop their own infrastructure from scratch. This ensures many tradeoffs and subsequent realities which we’ll explore here.

Infrastructure Overview

Electroneum or ETN is the native token of the Electroneum network. Having the same name, these two tend to be mixed up like in other popular blockchain based networks, such as Bitcoin. Conceptually, it is important to distinguish the two since each has their own unique characteristics, properties, and purpose.

The blockchain-based network, Electroneum, is a network developed, launched, bootstrapped, and maintained by Electroneum the company which has many users around the world. These users transact between themselves by sending each other ETN using digital wallets.

Governance & Consensus

In its current form, the Electroneum network is built in a unique way and is the first of its kind: since mid-2019, it has operated in a “federated” manner and under a governance mechanism called Proof-of-Responsibility. Essentially, through this governance process, Electroneum achieves certain goals but fails in others.

First, this is a governance mechanism and not a consensus mechanism. Often, blockchain networks aim to decentralize their governance, removing single entities from power and taking steps to ensure no single entity can have singular control over the network. When doing so, they implement a consensus mechanism that will allow the users of the network to work collaboratively by always agreeing on the current state of the network.

In Electroneum this idea is completely removed. Instead, the company chose to take a different approach - creating a freely available public blockchain which is explicitly controlled by the company. All matters related to the maintenance and control of the network are taken care of by Electroneum, from code upgrades to supply adjustments, in a fully centralized manner.

This approach allows Electroneum to fully control every aspect of the network and thus introduces a factor of trust into the equation. Electroneum is the sole authority which decides whether to allow or deny entities to run validators on the network, sharing in the block reward. Electroneum, therefore, is the sole authority in determining the height of the block reward and can change it at any time - although so far they haven't done anything of the sort.

Currently, the rights to mining new ETN are given by the company to different organizations in countries where the company operates, mostly to NGOs. This approach creates a token supply and income at the custody of these NGOs which can then decide what they want to do with it. As of now, there is no mechanism in place to give ETN token holders complete insight into where newly-issued ETN goes, and what these NGOs choose to do with their mined ETN. ETN holders can, however, look through the blockchain explorer that Electroneum provides and watch the amount of newly ETN issued.

Resource Management

The Electroneum blockchain benefits from being a walled garden that is orchestrated by the company - the resources required to maintain the network are extremely small compared to other networks. While in large public blockchain networks such as Bitcoin anyone can join the competition and compete for the next block reward, the fact that Electroneum has to authorize each and every miner means that these miners are given hashpower allocations and can then mine with ease and minimal resource usage - no special hardware needed, no huge electricity bill and therefore the environmental footprint of the Electroneum network is very low compared to other public blockchain-based networks.

Attack Vectors

On some marketing materials and communications made by Electroneum, the network has been declared “a decentralized network”.

We reached out to Electroneum to clarify why the network was portrayed this way, and received this response from Electroneum CEO Richard Ells:

"We have done something very different with our blockchain, which some people love and some people hate! We have a centralised system that dictates who can be a validator and we do this to protect the network from 51% attack, spam transaction attacks and more. Thus I agree that we are a centralised authority. The network validators themselves are not all centrally located - they are in different locations around the world, and we use the  term "decentralised layer" for this. One of the dictionary definitions of decentralised is 'to disperse (something) from an area of concentration' which we would argue our validators most certainly are. We are not arguing that   the control of those validators is decentralised.”

It’s important to point out that Electroneum is in fact a completely centralized network, due to the fact there is a single party to be trusted that has complete control of the network - the Electroneum company - and any rights on the network are given out on an approval basis.

It has also been said that Electroneum is “Insusceptible to attack” (not direct quote). Of course any network can be attacked in any number of ways, however Electroneum has mitigated an important attack vector known as the 51% attack by being centralised. The fact that the network is completely centralized is a point of risk consideration. Whenever a user interacts with the Electroenum network, they must always be aware that Electroneum has true power over their funds, even if in an indirect way - by having control of the network though not the individual user accounts.

This isn’t different from other centralized value transfer services such as CashApp or Venmo, though legal coverage for the user using the latter networks is broader and will be easier to win in court should a situation arise where a user goes through the legal system to recover lost funds.


The Electroneum network is a distributed public blockchain overseen by the Electroneum company which has full permissions to manage and govern the network. New supply issuance by mining is done by both the company and NGOs that have entered into agreement with the company in order to increase adoption of the network and cryptocurrency in the local regions where these NGOs operate - mostly in developing countries. The fact that Electroneum has full control of the network harbors exactly the same centralization factors in many other organizations such as Amazon or Google. Users who choose to operate on the network must be aware that there is a single party controlling it and also of the risks associated with it just like any other online platform they participate in. We do however see a discrepancy between the reality portrayed here and in some of Electroneum’s marketing materials and communication channels where the company claims their network is decentralized which is not technically true.

Business Infrastructure

In order to achieve its goals, Electroneum has designed and built an ecosystem from the ground up. They offer two main services, a payment network and a task-based marketplace, and their network consists of many actors besides the company and its user audience. Let’s take a look at the relationships between the participants in the Electroneum network and the incentive structures involved.


The Electroneum ecosystem can be simplified in the following diagram:


Ecosystem Participants

Electroneum Ltd. is the company that orchestrates the entire ecosystem. It is registered in the UK since 2017, has developed the current blockchain infrastructure, and is directly in charge of the services that are on offer, building and growing the ecosystem.

Electroneum App is the mobile app developed and maintained by Electroneum Ltd for the iOS and Android operating systems. On the app, users are able to:

  • Send and receive ETN - the network’s native
  • Top-up their cellular SIM card balance in over 140
  • Passively earn ETN through enabling “ETN Rewards” verifying their

The app is available for free on both the iOS and Android app stores. There are no public analytics regarding the amount of active app users. The only available metric is the one that is displayed on Electroneum’s site and details the total app downloads - currently sitting at 2,254,090.

At this moment - since it is not a publicly published metric - we do not know the exact amount of daily or monthly active app users, which is a metric that provides more insight as opposed to “dry” app downloads. We can confirm, however, that Electroneum does have more than 1 million registered users and that the majority of them are active and retained users. Beyond this number, we have no way to confirm how many users there are.

In the ETN Rewards section of the app, as of writing, the “active users” metric - which signifies how many people are enrolled in receiving mining rewards - is at 237,514.

Since such information is not publicly disclosed, we cannot know if Electroneum does or does not use bots to enrich their social media engagement. To confirm or refute this, we must receive access to resources that so far we have not had access to.

The Electroneum Network is the blockchain-based network on which ETN transactions take place. It is developed and maintained by Electroneum Ltd. Users on the network can only choose to manage their ETN using the mobile app or a paper wallet that is generated using the generator that Electroneum Ltd provides. Additionally, users can choose to keep their ETN on a cryptocurrency exchange.

Recently, Electroneum released code for a Ledger Hardware Wallet-based app to hold ETN, but currently only developers are able to utilize it - there is no user friendly interface.

The source code for the Electroneum network is available on Github.

NGOs (Non-Governmental Organizations) are, as the name suggests, independent of any government, usually non-profit, and many of them are active in humanitarian or social areas. Electroneum Ltd partnered with these organizations to push its ecosystem to territories that western companies do not normally operate in, mainly developing countries in areas that have great need for social and economical aid. These NGOs are taking an active part in the ecosystem by mining new coins and using them however they like with the intention of Electroneum being that the NGOs use these funds to promote the usage of ETN in their communities.

Currently, there is no system in place to enable the participants of the Electroneum network to know how these NGOs use the proceeds from the mining income.

AnyTask is the task marketplace developed and maintained by AnyTask Ltd, a company affiliated with Electroneum Ltd - both companies share team members.

AnyTask is a place where users can either pay or get paid for tasks in a wide array of industries from graphic design to fitness training. Users of AnyTask are paying for the tasks using credit / debit cards and sellers can cash out ETN to their mobile app wallets.

Due to its very recent launch, we currently have no available data on AnyTask other than the way it is built and operated.


Electroneum is definitely one of the longest-running token-based blockchain projects in the space. Being such, it has always been subject to intense criticism from all possible fronts: Within its own community and without, as well as from the broader cryptocurrency community. Here we will present some of this criticism but will not pass judgement on these issues - we only intend to bring all voices to light. Due to the nature of Reddit, the Electroneum Subreddit is often the most vibrant outlet for these discussions.

Disappointment over slow traction

In this reddit thread, users discuss the seemingly slow adoption following the rollout of mobile top-up across more than 140 countries. The original poster suggests that growth is severely underwhelming and should be much higher - if the company went on to promote ETN using a marketing campaign which according to one user in the thread has been promised by the team for the past three years.

Disappointment over liquidity

In one thread, a discussion emerges about the upcoming “death trap” where no matter how low sellers will offer their ETN for, there will be no buyers for it. This situation arises from a severe lack of liquidity, according to users, which is taking place across the exchanges that ETN trades on.

Disappointment over token price

Most commonly, users and investors complain about the decreasing price of the token, expressing their disappointment over what they call “the failure of the token” due to its

ever-decreasing market cap and position in the broader crypto market. Threads such as this, this, and this manage to convey the increasing disappointment in the entire Electroneum project from an investor standpoint.


Metrics are often the most accurate indicator of whether or not a company is on the right track to achieving its goals. We will therefore present some metrics that were available to us while preparing the report.

  • Overall ETN app installs: 2,425,481
  • Total Top-up count: 92,640
  • Instant ETN payments 260,331

Regarding AnyTask marketplace:

  • Total active tasks: 2986
  • Total task declined from being published: 5,879

To start - the amount of app installs is an impressive feat for any start-up company, especially in the blockchain industry. We can also see that users are taking advantage of the app and transferring funds between each other, with the country that boasts the highest rate of using Electroneum’s services is Brazil.

Additionally, we can see that the top-up feature is receiving widespread usage, providing a solution to a problem many people have.

Furthermore, we can see that AnyTask is picking up the pace, and not only having increasingly large amounts of available tasks on the platform but also that its team is serious about enforcing the company’s ToS and guidelines, declining almost twice the amount of tasks that is being submitted for publishing.




This report was commissioned by Electroneum Ltd. and fully paid for by Electroneum Ltd.

None of the content in this report is or should be interpreted as investment or financial advice.



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