Golem Network: P2P Computational Power
By Selene Wang | Crescent City Capital Market Analyst Intern
1. Introduction to Golem
Golem is a blockchain-based software that allows users to buy and sell computational power for various purposes, including artificial intelligence, cryptocurrency mining, CGI rendering, and other complex computations that demand great computing power. Golem represents a version of traditional services of the same kind that is controlled by users, and thus is decentralized and doesn’t depend on central authorities and third parties.
Golem allows users to sell their excess computing power to users who lack the resources to work on complex projects that require greater computational power for execution. Users who sell their resources are rewarded with GLM tokens in exchange for their service, paid by buyers on the network. The price depends on the amount of rented computational power.
Golem effectively provides a P2P (peer-to-peer) market for computing resources by splitting tasks into smaller portions so the system can scale properly and form a unique user-dependent market. GLM is the utility token of the Golem network, and it serves as the main store of value on the network. The GLM token incentivizes sellers to rent their computing power in exchange for GLM-based payment provided by buyers.
2. How Does Golem Work?
Golem works by processing requests and connecting buyers and sellers based on the request in question. On the Golem’s Network, users who buy computing power are known as Requestors. Requestors can create requests that the Golem system then processes, validates, and uses to connect the Requestor with appropriate resources. The system splits the task into smaller fractions of the initial task and rents the computing power from multiple users in portions.
The Requestor can have Golem complete the work for them, such as rendering CGI elements that require major computational resources. Instead of waiting for the work to be completed by traditional cloud computing service providers that can be rather expensive and slow, Golem splits the task and finishes the work almost instantly with fractions of computational power provided by sellers in the peer-to-peer market.
The Requestor will use a task template to request resources for computing, with task templates containing all the information the Golem Network needs in order to carry out the requested task. Users can make a request with a pre-existing template or customize their own task template, which will be verified by Golem automatically. Once the Requestor receives the completed work, they make a payment to the Provider (seller) directly into a contract within the Golem system.
3. GLM token
The Initial token distribution of Golem (GML) is as follows:
- 82% was distributed through the token sale
- 12% was retained by the Golem Factory for team incentives and project development.
- 6% was allocated to early contributors and team members
Golem’s utility token was initially called GNT, but as the project’s new transaction framework is built on Ethereum’s Layer 2, ERC-20 tokens are required. In November 2020, Golem therefore began a token migration, in which original GNT tokens can be migrated 1:1 to the new ERC-20 GLM tokens.
There are currently 1,000,000,000 GLM in circulation. Golem has a limited supply of coins, much like many other cryptocurrencies. All GLM coins that should ever exist have already been created.
4. Market Analysis
Price & Market Cap Performance:
- GLM current price: $0.42
- All-Time High: 1.09 (01/08/2018); All-Time Low: 0.01 (01/01/2017)
- 24-hour trading volume: $12,170,484 USD.
- The current CoinMarketCap ranking is #148, with a live market cap of $403,411,806 USD.
History Analysis:
- Late 2017: The price of GLM saw a significant surge shortly after its launch, reaching an early peak due to the initial excitement around the project and the broader cryptocurrency market boom.
- Early 2018: The token experienced extreme volatility, with sharp increases and decreases in price. The all-time high was reached in January 2018.
- 2019 – Early 2021: The price of the GLM token exhibited minimal variation at a low price. The broader cryptocurrency market was recovering from the 2018 crypto crash. As a result, investor sentiment was cautious, contributing to the stability in GLM’s price.
- Early 2021: The token migration from GNT to GLM was completed, bringing renewed attention and optimism to the project. This rebranding and the alignment with Ethereum’s ERC-20 standard were significant factors contributing to the price increase.
- 2024: On Feb, the new golem-JavaScript beta release has been finalized and released as latest on NPM. On April, Ray on Golem MVP was released.
Recent trends:
For the last 7 days, the GLM token experienced a series of ups and downs. For the last one month, it has shown an obvious downward trend. Given the current market conditions and the recent downward trend, potential investors should approach GLM with caution. As a mature project with more than 7 years of history, small technological developments may not catch buyers’ attention as significantly as before.
5. Summary
Golem network is one of the most reliable P2P markets for buying and selling computing resources for various purposes, while the dev team plans to expand the network’s applications and add more functionalities to satisfy the future demand for computational power. At the same time, Golem plans to become an integral part of the decentralized internet in the future and allows people with excess computing resources to earn by selling their computational power.
In the short term, the token’s price volatility and market sentiment make it a less attractive investment. Investors should keep a close eye on further developments and updates from the Golem Network to make informed decisions.
Reference
https://coinmarketcap.com/currencies/golem-network-tokens
https://www.golem.network/about
https://kriptomat.io/cryptocurrencies/golem/what-is-golem
https://tokeninsight.com/en/coins/golem/tokenomics
https://www.coingecko.com/en/coins/golem/tokenomics