Substratum: Facing Adversity But Not a Scam

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As 2018 drew to a close, cryptocurrency investors and Internet users around the globe waited eagerly for the release of SubstratumNode, an open-source, censorship-resistant, peer-to-peer network that could turn any personal computer into a web hosting server. Like homesteaders who generate their own solar power and sell the surplus, Substratum users could become SubstratumNode operators and route internet requests in return for Substratum tokens (SUB).

Missed deadline and negative feedback

Unfortunately, Substratum fell short of its goal to make the SubstratumNode consumer-ready by the end of the year, and the company’s subsequent missteps have angered many in the community. As late as December 7, 2018, Substratum promised a full production release, which led some critics to accuse the company of deliberately misleading the public.

The company also came under fire for its treasury management strategy; Substratum announced that it hired a portfolio manager to help oversee a large portion of its Ethereum-based ICO funds. Critics claimed that day-trading seems antithetical to the cryptocurrency markets ethos of decentralization and that this decision indicated the company was struggling financially; since the price of Ethereum has dropped significantly since the company’s original ICO in 2017, some investors began to question whether Substratum was having trouble surviving the bear market.

But there’s no need to worry

Although Substratum has made mistakes, all evidence indicates that the company is acting in good faith. In a video released December 31st on the Substratum Network’s YouTube channel, founder Justin Tabb assured the community that SubstratumNode would be delivered in 2019. The delay in the consumer release was not the result of insufficient funds, but rather, limited data; SubstratumNode required additional development and was not delivered on its due date because it evolved beyond the initial project parameters.

While many experts doubted SubstratumNode’s potential to bypass state-sponsored firewalls in China, Russia, and Iran, beta testing results have exceeded those expectations. Currently, the Chinese government blocks access to Facebook, YouTube, Google, and many other social media apps and news sources. Therefore, Chinese Internet users depend on unreliable VPN connections to get around these restrictions; but soon, Internet users living in Internet-censored regions of the world will be able to use SubstratumNode’s user-friendly interface to circumvent censorship.

Progress is being made

Although the team at Substratum may have missed a deadline, The team has been far from idle.

The Substratum Network’s Jan 10th video update reveals the success of the latest binary release; the network completed large graph testing which is a crucial step toward building a self-healing system. In earlier tests, requests for access failed if a single node shut down, breaking the linear routing chain; however, with the complex graph approach, nodes “gossip” with one another, meaning they can recognize when a particular node becomes inactive and reroute requests to avoid sending information to that offline node.

Initially, SubstratumNode required a centralized gatekeeper, but advances in the self-healing network move the project much closer to full decentralization, as nodes can bootstrap into any network neighborhood. The latest update also included the release of Test Net Tools (TNT), a framework to improve detection of any unhealthy nodes in a cluster.

The Substratum team has taken significant steps toward monetization; by rebuilding their smart contract, completing the automated token exchange, and extending decimal places from 2 to 18, developers have improved efficiency and prevented the need to mint new tokens if the market fluctuates. With these updates comes increased transparency; Substratum has implemented a new communication structure and will create monthly blog posts that provide project updates as well as run monthly AMA sessions to answer any questions and provide an avenue for community feedback.

As for the state of Substratum’s ICO funds, rumors of insolvency couldn’t be further from the truth. Tabb states that the company still has more than half the total ETH funds raised in its ICO over a year ago.

Substratum’s leadership demonstrates responsible custodianship of network participants money by using personal funds to cover travel expenses and conferences. The decision to hire a portfolio manager indicates the company’s willingness to use all available strategies and resources to adapt to market trends; one would expect that all companies in the space would do the same in order to manage their risk better.

The world of blockchain and cryptocurrency is still in its infancy, and startups will inevitably experience their share of growing pains. While the goal is decentralization, most companies currently exist in a hybridized space where convention and innovation meet, and old rules no longer apply. During this period of transition, Substratum has shown considerable resilience and a willingness to learn from past mistakes. However, investors have no reason to suspect fraudulent activity and have every reason to expect SubstratumNode to publicly launch in 2019.