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You could compare it with _funding_ valuations, which is different from _buying_ a company at a certain valuation. Eg: If a company has 200M shares, and someon
by andruby 9y ago
You could compare it with _funding_ valuations, which is different from _buying_ a company at a certain valuation.
Eg: If a company has 200M shares, and someone pays $1/share during an investment round, the company (and the press) will mention that the funding was done at a $200M valuation.
The same logic is done to calculate crypto currency market cap. If there are 200M coins, and someone somewhere pays $1/coin, the market cap is reported at $200M. This is, however, the total value of all coins of that currency. Often, the person(s) or company that created a coin won't own most coins (unlike with company shares).
- LMYahooTFY 9y agoI see the similarities there. However, isn't there a fundamental difference in stock valuation and a currency? The currency can't "go out of business", as it's entire existence is a speculation. Anyone using a given currency speculates that it will be accepted tomorrow.
- andruby 9y agoGood point. That is indeed a fundamental difference. It probably also points to a large difference between a new blockchain _Currency_ and a token _Asset_. The latter often being a proxy for company shares in an ICO.
- LMYahooTFY 9y agoWas this the idea underlying the DAO? I haven't read much into it, but my impression was that it was essentially mandating signatories to a contract in order to make desired changes. Using this crypto-tech would make it impossible to circumvent and screw another party.