Shitcoin or Not? CLOUD

This is part of a new series on Ethereum ICO’s and various Altcoins/Crypto tokens and why they’re shit or why they’re not.

A summary of all the coins can be viewed on a spreadsheet here.

TL;DR: YES. CLOUD is a shitcoin.

Why? Let’s check out their website, cloudwith.me.

They advertise “Basic Amazon Web Services for $1 per month!” and their ‘Limited Time Offer’ includes:

  • 1GB of Memory
  • 1CPU @ 2.5GHz
  • 6GB Storage
  • 3GB Bandwidth
  • 100k page view/mo

Notice that these limits are suspiciously similar to the t2.micro limits. AWS’s Free Tier allows for 750hrs/mo of a t2.micro instance. So if you’re using CLOUD’s service for less than that, it’s actually more expensive to use their $1/mo deal.

Even if it didn’t actually cost more to use their barebones ultra-cheap hosting prices provided through their tokens, they have absolutely no mention of how this is sustainable. All over their token site they advertise “50% cost reduction”. On their main site they mention a mysterious “94% cost reduction” with no mention as to how you’re saving this money, or how they actually accomplish this savings.

On their token site, they list “as seen on” many publications and websites, but no actual links to the articles themselves. I was unable to find articles on Forbes or Yahoo Finance related to CLOUD, but I managed to find the Business Insider piece about it. The piece seems to echo the CLOUD website itself for the most part, reiterating how it’ll be used to get a 50% savings on cloud hosting services. The article also mentions the GridNodes infrastructure planned by CLOUD. According to the CLOUD token site:

Each GridNode server works as a gateway integrating multiple decentralized cloud services (such as storj, golem, block.one, iex.ec and others)

So judging by this token site as well as the CLOUD whitepaper (PDF), the GridNodes are computers running the GridNode software, which allows them to serve as a node for a host of different cloud services without having to individually install the environment and software for each one.

This is an admirable goal, but there’s not much more than a whitepaper. As with most ICO’s that are nothing more than a whitepaper, this is a huge red flag.

The whitepaper seems to give a source as to the “94% cost savings” that is mentioned on their main website:

The Company believes that the decentralization process will drive commoditization of cloud services to
commodity rates as low as 94% below current market prices.

So this 94% reduction number is based on a belief that their system will make the price of cloud services plummet. There also is no other mention of “The Company” anywhere else in the whitepaper. So I can’t be sure if “The Company” is CLOUD themselves or some other entity. It is never defined. This statement is also accompanied by a vague graph without any units or scale to the axes.

typical behavior of an oligopoly graph from the CLOUD whitepaper
The original caption to this graph is: “The Company believes that the decentralization process will drive commoditization of cloud services to commodity rates as low as 94% below current market prices. Essentially, the goal is to have cloud services on equal status to running water or electricity in developed countries – a utility, removed from price gaps or unnecessary markups.” There are no labels or scale to the axes, making it completely useless as a graph, just like every other graph in the whitepaper.

The charts are all extremely vague and lack labeled axes or scales at all, an extremely common tactic to mislead people, which is incredibly worrying given that they’re willing to mislead investors in this way.

In their Comparison Overview (PDF), it seems as if they want their CLOUD GridNode DAP system to entirely replace services such as AWS and Azure, so it’s a bit odd that they’re selling deeply discounted (in an unsustainable way) AWS and Azure services using their token.

CLOUD seems incredibly fishy and has all the marks of a SHITCOIN. Vague information, misleading graphs and figures, and an unsustainable business model. Steer clear.