What is Golem?

The team behind Golem Network started out with a dream: to make the strongest computing power available to the common people around the world, a sharing economy for the computing resources that lie dormant in most of the PCs. Think of it this way, your computer users only a fraction of the power it actually has. Aside from playing games on Steam, your machine can handle web browsing and Word documents without breaking a sweat.

Just as DeFi protocols aim to increase capital efficiency, then Golem Network plans to increase the efficiency of idle computing power. And for the right price, you too can sell your computing power to help those in need. We are not talking about charity. Instead, Golem Network has created a market where users can direct their computing power towards intensive tasks such as CGI rendering, data scraping, and rendering the cool videos you see on YouTube.

You see, the rendition of complex videos and animations takes a TON of computing resources. For example, editing 4K videos requires a minimum of 32 GB RAM in addition to a high-end GPU. The final result (aka the rendition) can take anywhere from 2 hours to two weeks depending on the length and complexity of your project. The estimate time doesn't take into account whether the computer crashes and you need to start all over.

Small creators usually don't have a spare $10K lying around to invest in a Master Race PC, and they don't even have to. With Golem Network, they can borrow computing power from multiple computers and pay a small fee compared to the cost of buying the hardware.

Golem Network isn't the only distributed computing service. There are platforms like LoadTeam, Mineprize, or Hyperlink that do the same job. Golem differentiates from its competitors for its peer-to-peer architecture. In other words, computing power is auctioned and transacted in a decentralized manner. This brings the data closer to the user and the consumer. With no centralized intermediaries, Golem can offer competitive fees while still being able to enforce the rules of the agreements.

The platform also has its native token called GLM, and ERC20 token that lives on the Ethereum network. GLM represents the currency of exchange for renting and selling computing power. Holding GLM doesn't require KYC, and it can freely be traded on the broader crypto market.

Using a crypto infrastructure is a double-edged sword, as the Golem team has to be able to enforce payments and the correct task execution. Dealing with unknown requestors adds to the complexity layer, because they can create multiple identities and not pay for the services. Golem Network solves these challenges by developing a reputation system. Basically, if the user is a jerk, his tasks won't be accepted by the providers. Requestors will have to gradually earn their reputation in order to gain access to increasingly more computing power.

Golem Network has never been hacked. Besides the matching algorithm, other attack vectors can be at the smart contract level. Fortunately, the team at Golem is always one step ahead of the hackers by auditing the protocol upgrades and keeping an eye on every aspect of the protocol. Still, the possibility of Golem Network is non-zero, which is important to keep in mind as you use the protocol.

How does Golem work?

Golem Network works by connecting the users (called requestors) to the computing power providers. The system is similar to Airbnb, with the difference that you have multiple hosts. Multiple providers can rent out their computing power for the same project, their sum representing the capacity of a super-computer. 

To get an idea of how Golem Network works, let’s go through the computing task process.

Everything starts when a requestor needs to compute a task using the Golem network. It may be a CGI artist who has just finished working on an animation and wants to render it in high quality or a data scientist who wants to train her machine learning algorithm.

If the user's task belongs to a class already implemented by Golem, they can use one of the task templates from the task collection. The task template contains the full computational logic. It has the source code that should be run, knows how to split the task into subtasks that are sent to different nodes, how to verify results and put them together as the final result.

If the task is more specific, the user would have to write his own code using the task definition framework. Golem provides the task definition framework along with all the necessary documentation to get it right. Once created, these tasks can be stored locally and be used exclusively by the creator or they can be submitted to Golem Shop. Imagine you have created a new task for training an AI to detect fake news. You can then choose to sell the task framework for others who would like to apply it for their own needs. 

With the task defined, the information is then broadcasted to the Golem Network. Providers will scan for the new tasks and assess the reputation of the requestor. Then, the provider connects with the requestor’s node and submits an offer with a price and information about the machine’s capabilities (performance, available cores, etc.). If the parties agree on the conditions, the list of resources are downloaded and sent over to the provider via IPFS. 

After all resources are pulled into the provider’s machine, the the provider’s machine can finally start computing.

Once the computation is finished, its results and logs are sent back to the requestor via the IPFS network. When the result passes the verification stage, the payment is automatically made in GLM via Polygon network.

Simultaneously, the provider’s reputation level rises in the requestor’s reputation system (and decreases if the result doesn’t pass the verification). The reputation decline will be lower if the provider sends information about errors during the computation or doesn’t send results at all (in most cases, this would be due to technical problems) and much higher if the result is wrong.

Golem uses a "pay as you go" agreement, otherwise known as payment for the usage of resources. In this payment scheme, the requestor is only required to pay for the resources that the provider has actually used. To that end, the provider keeps track of that usage and only afterwards they can ask the requestor to pay. There are no subscription plans or up-front payments for future usage.

In order to access Golem's computational marketplace, users need to have GLM tokens and run a Golem node, called yagna. The nodes in the network act as bridges between the requestor and the provider, and ensure the terms of the agreement are executed. 

How to make money on Golem?

The only ways of making money on Golem is by running a validator node or by renting your computational power. Both processes are technical, which is why we recommend checking out their documentation.

Price Prediction for Golem — Can it hit $1000?

Buying and hodling GLM — the native token of Golem — is one way of potentially making money on Golem.

By looking at its current price, it’s natural to think about the chance of GLM hitting $1000 per token. This can happen sooner, or way in the future, and is determined by a couple of ever changing factors.

Let’s examine the potential growth of the GLM token by analyzing its tokenomics. GLM’s current market cap sits comfortably at ${MARKET_CAP}. With {CIRCULATING_SUPPLY} GLM tokens being in circulation today, that means a price of {PRICE} per GLM.

How did we come to that calculation? It’s quite easy, the price of a GLM token is equal to its current market cap divided by the number of tokens in circulation. Dividing ${MARKET_CAP} by {CIRCULATING_SUPPLY} gives us a result of {PRICE} for each GLM coin. 

By changing the order in the simple formula above we can use it to calculate other things as well. This helps us a lot because we can deduce the market cap of GLM at different token prices. Then, we can use the result to compare it to the current state of the network and see what would be required for GLM to hit that price.

At a price of $1000 per token, that means the current market cap of GLM would equal ${{CIRCULATING_SUPPLY} * 1000}. Remember that we arrived at this number by multiplying the amount of circulating tokens by $1000.

Now let’s shift our attention to the fully diluted market cap.

Some blockchains may have their tokenomics built in a way that only a small percentage of tokens are circulating at the beginning. This can be misleading because we don’t have the full picture and only take into account the current number of coins released in the market.

The fully diluted market cap represents the total value of a coin if all tokens were in circulation. GLM’s whole supply of tokens is {MAX_SUPPLY - TOTAL_SUPPLY + CIRCULATING_SUPPLY} GLM which means that no more coins above that number will ever be created.

These tokens are not created at the discretion of a specific entity. They are created automatically by the network to reward different actors that keep it secure.

How does this impact the price of GLM? Taking into account the current price of a GLM token, that would result in a fully diluted market cap of ${MAX_SUPPLY - TOTAL_SUPPLY + CIRCULATING_SUPPLY * PRICE}. GLM coins that have been burned are not taken into consideration because they have been permanently removed from circulation.

Whether it seems gigantic or not, the number we came to above only takes into account the current price of a GLM token. Doing the same calculation but with a price of $1000 gives us a result of ${{MAX_SUPPLY - TOTAL_SUPPLY + CIRCULATING_SUPPLY} * 1000} for the GLM protocol fully diluted market cap.

These are all crucial details to know when calculating if GLM can reach the price of $1000 per token. If the diluted market capitalization is way too high, the token has little room left to grow. Blockchains in general have no cap on the value they can reach, whether that number seems possible it’s totally up to you.

The future of GLM depends solely on its growth as a network used by tens and hundreds of millions of users.

If you’re looking to add some GLM to your portfolio, the most trusted places to get some are Binance and Coinbase.