Is Akash Network the Key to the Next Wave of AI?
Akash is a decentralized marketplace for cloud computing (we’ll explain this in a second).
It has a MC of $64M, FDV of $219M, and its $AKT token trades at $0.56. In 2021, the price hit $8.08.
This article will cover the following:
• What is the Cloud?
• What problem does Akash solve?
• How does it work?
• Why is its potential goes beyond the Cloud
• What are its #tokenomics?
• What’s the potential value of $AKT?
What is the Cloud?
“Cloud computing” is just a fancy term for “using someone else’s computer”.
Instead of using your own computer to store data or perform complex calculations, you can use the internet to connect to a remote computer owned by Amazon, Microsoft, Google, etc…
These remote computers are often held in massive “data centers”.
Data centers are huge buildings (or complexes of buildings) that can each host millions of individual computers (called “servers”).
There are currently 8M+ data centers across the globe.
Cloud computing is one of the greatest advancements of the 21st century. It allows companies to access crucial computing resources without having to spend a bunch of money on hardware, maintenance or security.
As such, most businesses have transitioned to “the Cloud”.
The Problem with the Cloud
Unfortunately, the “Cloud” isn’t all it’s cracked up to be. Three players — Amazon AWS, Google Cloud Partners and Microsoft Azure — control over 60% of the market.
This creates several problems:
· High costs
· Risks of censorship
· Underutilized resources
Problem 1: High Costs
Amazon, Google and Microsoft use their dominant position to extract heavy taxes on their users.
Andreessen Horowitz estimates that the top 50 publicly traded software companies spend in excess of $8B for cloud services (~50% of COGS).
Problem 2: Risk of Censorship
Control also leads to censorship risks. The major cloud providers can ban anyone they want, at any time and for any reason.
This may be an even bigger threat to #Web3, as over 2/3rds of Ethereum and Solana nodes are hosted by major cloud providers.
Problem 3: Underutilized Resources
Finally, the Cloud is woefully inefficient. While there are over 8 million data centers in the world, most operate well below capacity.
In fact, it is estimated that 30% to 85% of servers are underutilized.
The Solution
Akash is solving this problem with a decentralized marketplace for cloud computing.
Anyone can be a customer.
And anyone with sufficient hardware — including individuals or the 8.4M underutilized data centers — can join and sell their computing power for cash.
Often called the “AirBnB” for cloud computing, Akash is poised to break the stranglehold that “Big Tech” has on computing resources.
The network is cheaper, more reliable, more efficient and — most importantly — highly resistant to censorship.
Akash can be used for a variety of services such as:
· Middleware
· Validators
· DAO websites
· Gaming
· Mining
How does Akash Work?
Akash operates a two-sided marketplace with two key stakeholders:
· Tenants: Customers seeking computing resources
· Providers: Data centers (or any person with compute & storage capacity) that can provide computing resources
To utilize the network, customers specify their needs and submit a “request for bids” to the network.
Providers receive these requests and respond with a bid and the one with the lowest bid wins the contract.
Market Overview
The global market for cloud compute is expected to rise from $380 billion in 2021 to $1.6 trillion in 2030.
Centralized storage and compute is currently dominated by the “Big 4” cloud providers — Amazon AWS, Google Cloud, Microsoft Azure and Alibaba.
Competitive Advantage
Askash offers several benefits compared to traditional cloud providers. It is:
· Cheaper
· Censorship resistant
· More reliable
· Private
· Flexible
Let’s take a look at each:
Competitive Advantage #1: Cheaper
Akash is significantly cheaper than AWS, Google Cloud Platform (GCP), or Microsoft’s Azure, with a cost savings of up to 80–90%.
Competitive Advantage #2: Censorship Resistant
Unlike AWS, who can “deplatform” apps that violate their terms of service, Akash can’t censor or ban any user for any reason.
Competitive Advantage #3: More reliable
Decentralized networks are more resilient to crashes and outages.
If one data center goes down, Akash can simply switch to another.
Competitive Advantage #4: Privacy
Tenants can choose to remain anonymous. This is important because if a deployment is hacked, critical information will be protected.
Customers also aren’t forced to use a credit card, which is ideal for DAOs.
Competitive Advantage #5: Flexibility
Akash customers can select data centers based on their needs.
For instance, a gaming dapp may want to use a cheaper, but less secure provider, while a DeFi protocol may opt for higher security.
Traction
Akash currently has over 389 active leases.
Notable projects powered by Akash include Anonstake, Blockless, Praetor, HNS Search, Chia Network, Cosmos Directory, Third Web and Juno Network.
Team
Akash is a part of Overclock Labs, which is headquarted in San Francisco.
Notable team members include:
· CEO — Greg Osuri
· CTO — Adam Bozanich
· COO — Boz Menzalji
· CFO — Cheng Wang
Tokenomics
$AKT is the native token of Akash.
It has a circulating supply of 113.9M and total supply of 388.5M.
Below we will cover $AKT’s:
• Usage
• Initial distribution
• Emissions schedule
Tokenomics: Token Usage
$AKT is a utility and governance token with several uses:
• Fees: Transaction fees and block rewards are denominated in $AKT
• Governance: The token is used for governance
Tenants can also choose to settle leases with $AKT.
Tokenomics: Initial Distribution
Akash distributed 100M tokens in its 2020 launch to the public, investors, team, foundation, ecosystem, testnet and select vendors.
These tokens have a 3-year unlock schedule which is shown below:
Tokenomics: Emissions Schedule
$AKT is an inflationary token with a capped supply of 388.5M tokens.
Inflation started at 4.5% per month and gradually decreases over time.
An expected emissions schedule for the decade is below:
Potential Valuation
If Akash achieves its ultimate goal of capturing 1% of the $1.6 trillion cloud computing industry, that would imply an FDV of $16 billion.
That’s a ~75x increase over the networks FDV value today!
Long-Term Potential
Using Akash offers numerous benefits to users. When compared to the Cloud, it’s cheaper, more reliable, more flexible, censorship resistant and private
While these are boon to #dapps, there may be an even bigger potential for $AKT that few are discussing…
Akash is currently building out its GPU network, which could have massive ramifications for the protocol.
Not only are GPUs the primary tool for AI (ML and DL), but they are also used in rendering, gaming, IOT, zero knowledge proofs, as well as in a variety of industrial applications.
This represents a massive opportunity for $AKT as many of these use cases have potential values in the tens of trillions! (e.g. AI alone is expected to be worth $80T).
A successful entrance into any one of these spaces could increase $AKTs value by orders of magnitude.
Note: This is obviously not financial or investment advice nor a recommendation to purchase AKT
It’s just a few thoughts on how things could potentially play out
Like with any forecast, it’s a guess at best, and just as many things could go wrong and drive the price to $0
