Hmm... I don't have time to go through hours and hours of talk... can you point out the video and rough time where he discusses valuation methods? In the meantime https://www.elitetrader.com/et/threads/fundamental-value-of-bitcoin.312707/
Well that just the problem “you having no time”. If you are in a quest to find the real fundamentals and derived value of something so disruptive as bitcoin you have to invest a lot of time to study the implications of a completely new asset. I myself spent more than 3-months studying this thing in 2013, and indeed I saw literally each Andreas Antonopoulos video over the last 4 years. https://www.youtube.com/channel/UCJWCJCWOxBYSi5DhCieLOLQ This all was necessary to gain a 50x profit on a substantial 2013-investment. What I learned was how useful this bitcoin could be for billions of people around the world in many, many ways. I understood the equation “usefulness + rarity = Value” (as Water is very useful, but only valuable in the Sahara). Andreas will show you many usefulness cases. I also understood the power of “Metcalfe’s Law”, as well as the “first mover advantage network effects” (which is why Bitcoin feels no competition of the 1000 other alts). I’m very confident that we are still in the early stages, as mass adoption is very far, still (we only have about 20 million users currently). Exact valuating bitcoin is quite impossible, just because it has so many different use-cases of which many aren’t implemented yet (just like the Internet in 1995, when we didn’t have Google, Amazon or Facebook yet). It’s also not possible because this new asset isn’t categorizable as “Currency” or “Commodity” or “Cash generating Asset”. It’s not “or” it’s all 3 in one new Thing. Maybe you have time to see this 15-minute video: how to value bitcoin. I can agree with this guy for 75%. He is wrong to dismiss bitcoin as a “Cash generating Asset”, just because in this category fall companies like Visa and WesterUnion(we have those companies in bitcoin as well). And what to think about the exchanges like Coinbase? Coinbase will get a multi billion IPO on the Nasdaq in the future and become the Google of the “Internet of money”. He is also wrong to dismiss bitcoin as a “Commodity”, just because bitcoin’s Blockchain is actually the most secure unforgeable Ledger in the world (more secure than any paper/database Ledger and more secure than any other Blockchain). The raw material of this commodity is a Ledger-row in which you can register anything. There are already countries experimenting in Land registrations in this Ledger. As I wrote: there is no way to value this thing, as it is something new we haven’t seen before. And how would you have valued Facebook in 2002 when it was just starting, far before it’s IPO? We can only see bitcoin’s use-cases growing rapidly (FinTech is booming) and transaction-volumes following exponential curves (like Metcalfe’s Law predicts). It’s up to you to imagine where it’s value will be in 2020. I have mine.
So you find you're time more valuable then you think mine should be? Have you read through my idea of valuation in the other thread? Your remark on Aswath Damodaran regarding Cashflow generating Assets.. I think you mistake an asset like stocks or bonds which usually generate CF through dividends/interest/revenue with bitcoin. Coinbase etc are assets... they generate revenues for it's owners by providing a paid service for it's users. Bitcoin itself doesn't do that. Neither is it a commodity in the sense that you're aiming to portray. Blockchain is... not bitcoin. You don't need bitcoin for a blockchain... the tech behind it is already being copied in non-crypty-coin industries. So he is right, not a CF generating asset and neither a Commodity in a raw material way... He says it's a currency. And I can agree with that as well as that it has the markings of a collectible. Regarding valuation. I'm standing behind my view that it can be valued in the way that the original creators would like it to work... as a currency. And a currency can be valued by it's usability, which is linking it to the actual use in purchasing goods and services... which for the USD would be linking a money supply measure, like M2 with the US GDP as it mainly services the transfers of products. In that case, the EURO... GBP etc all have a similar valuation, be it rough. Between each other they are linked via desirability, which is driven through safety and interest rates. If those two are fairly stable... you have a good valuation. Bitcoin in the sense of that it's used, as you say... will be used by billions... than that's the way it should be valued. I don't think it will be used by that many people, simply because there will be other coins... so it will be diluted... basically non-limited supply. But that's my point of view. Anyway... it's late and I'm going home to sleep... c ya
O... and Metcalfe's Law only works in investing when in the end there is going to be a cashflow/revenue... With each and any investment... be it assets like bonds (interest paid on principle) or stocks (dividends or revenue building bigger assets within company), currencies (via interest paid on balances) or commodities (via usability in turning raw into products) should be valued and judged based on the cashflows it gives. If it doesn't, eventually it is doomed. Because it's a money-pit. Except for, you guessed it... collectibles... which are all driven by sentiment only and the ow.. ah.. factor by speculators. And I do think that bitcoin will end up in that category if it's not used widely, which currently it isn't... since it's mainly used for speculation. And criminal purchases... so it has some value for that, like Baron has mentioned before.
Didn't I already explain in my poop analogy that usefulness and rarity alone don't equal high valuation? My poop is rare, very useful yet its price is way below where I think it should be. And as I get older I poop less and less, so get it while you can! It is a limited resource.
Wrong! The POW+incentives is the essential part of a secured untrusted blockchain. If you watched the Andreas video's you whould already know that.... But heh, no time .... Also wrong. This had been proved for 5 years already (the time alt-coins exist). ------------- Anyway: with all your opposites you will never dare to invest. I wonder how you will feel in 2020 or 2025 when you still haven't figured out how to value Bitcoin.
What an fool are you still? The equation is "usefulness + rarity = value". Where is the usefulness of your poop?
Actually, the missing bit is “acceptance”. Some things are useful and rare, but without universal acceptance value is not there. Bitcoin is definitely useful (at the very least as a vehicle for shadow economy), scarce by design but acceptance is still lacking. If we see the user base at a billion, like Facebook, it will be “the thing”. Right now it’s just “a thing”. I think the emerging markets are going to be make-it-or-break it for bitcoin. Once various forms of money transfer move to it, it’s will be here to stay.
[/QUOTE][/QUOTE] It's not an alt coin actually. These are different views on bitcoin future and you just claim that what majority sticks to is the true bitcoin. Simply imagine that there will be 20 forks through the future and coin holders will be distributed equally among all derivative BTC coins