5 ms·

> 2 billion lumens, which is now worth around $2 billion That's a bit exaggerated. Lumens are currently trading at $0.58 and such a big sale would have a high

> 2 billion lumens, which is now worth around $2 billion That's a bit exaggerated. Lumens are currently trading at $0.58 and such a big sale would have a high impact cost too.

pitaj 9y ago
Only if you sell them all at once
- swsieber 9y ago
  Only if you sell them all in your lifetime, I would bet.
AceJohnny2 9y ago
Indeed, this is my biggest issue with all the market-cap numbers we keep seeing. The market-cap is a made-up number calculated by (current_price x num_tokens). Except that current_price isn't fixed and the buying and selling will change it. You aren't selling to an infinite buyer market either, so you can't just sell everything at once to extract that value in one go.
- donquichotte 9y ago
  I agree that this is problematic, but aren't companies valued the same way? I.e. num_shares x share_price? Similar issues apply there.
  - empath75 9y ago
    except amazon stock represents ownership of a corporation with assets that have value.
    - bringtheaction 9y ago
      > digital things can't have value because they aren't real That's basically what you are saying. Here's the thing though. Crypto currencies can have lots of uses. And even "simple" ones "only" made for payment like XLM and XRB have a value when they let me transact fast and cheaply. I look forward to a future where my money is mine. Where no bank can arbitrarily decide to FREEZE MY FUNDS that I have LOANED TO THEM. The banking system is broken. Sure it gives us some nice things in return like fraud protection. But increasingly I begin to wonder whether the advantages of trad-banks are worth giving them control over my money, and increasingly the answer seems to me to be no.
      - tim333 9y ago
        > digital things can't have value because they aren't real I don't think he's saying that at all. Google is pretty digital but has value because it has millions of paying customers. With things like dogecoin the value proposition is more questionable.
    - pedalpete 9y ago
      But Amazon's value is not based on it's assets. What is the value of AWS? Is it the physical servers and data-centers? Or is it the knowledge and systems which make it all operational. If you can accept the later is where the real value is, eventually you're going to get to the point where you see the REAL value is in putting these pieces together into a system where a customer can exchange $$ for the value being created. Then look at somebody like Stripe, and say, they make all the $$ just facilitating the exchange of $$ online. Now, all of a sudden these other crypto services that enable the exchange of $$ don't seem so out there or do they?
      - 0wing 9y ago
        These are common misconceptions from speculators. 1. Crypto-assets like Bitcoin/Ethereum/Steller/Ripple, etc, are created simply by typing some numbers into a piece of software. There's no underlying value, it's a number in a database. 2. Stocks have measurable value, https://en.wikipedia.org/wiki/Price%E2%80%93earnings_ratio https://en.wikipedia.org/wiki/Price%E2%80%93earnings_ratio 3. Anytime someone sells a Bitcoin or whatevercoin it requires a buyer. Similar to baseball cards, beanie babies, or other artifitially scarce yet easy to produce asset, the market is subject to supply and demand. In the case of cryptocoins, the supply is created and distributed to a small group of users who horde it, in the hope that new users will come in and purchase the coins for more than it cost to create them. This is a hallmark of a typical pyramid scam, which collapses once no more investors can be found, leaving the late adopters holding now worthless "coins". 4. Stocks in Amazon and businesses grant you legal rights, and if the company goes bankrupt you are entitled to compensation from their assets.
        JohnJamesRambo 9y ago
        How long do you think Amazon's stock price would stay high if no new investors could be found? Don't dig too deep into what separates stocks and government issued fiat currency from pyramid schemes or what you find will trouble you. In many ways, crypto is the safer of the two. A finite amount of bitcoin will be created, can you say the same for the US dollar? My view is that everything is a pyramid scheme from the first wampum and beads that were traded by humans on down the line to where we are now. The difference is crypto is a chance to get in at the top for once. That chance was missed ages ago by our generation with regard to the US dollar.
    - benatkin 9y ago
      Traditional crypto mining burns real energy that costs real money and has a real carbon footprint, and the owners of the rigs have real pride that create a floor of how much Bitcoin will be worth, so long as it's technically sound.
    - panarky 9y ago
      You'd think so, but not really. Amazon's balance sheet [0] shows assets minus liabilities of $19 billion. So the "assets" that shareholders "own" are less than 3% of the company's $690 billion market cap. Not to mention that shareholders don't "own" those assets in any real, tangible sense. If you look around at any form of wealth, from the balance in your checking account to stocks, bonds and even the title on real property, it's all invisible, intangible and socially constructed. Not as different from cryptocurrency as one would like to think. [0] https://www.sec.gov/Archives/edgar/data/1018724/000101872417000135/amzn-20170930x10q.htm#sDDB2F8EEC1A45608A02845A43822D631 https://www.sec.gov/Archives/edgar/data/1018724/000101872417...
  - benatkin 9y ago
    Yeah, they are, and in the 90s DotCom boom I remember seeing it prominently mentioned that the value of Jerry Yang's shares in Yahoo! was "on paper".
  - aslkdjaslkdj 9y ago
    A company is valued in terms of the currency in it's stock exchange. A company in US has it's market cap in USD and a Japanese company has it's market cap in JPY. If you want to calculate the market cap in USD for a Japenese company, you have to use an exchange rate. Now since cryptos are currencies themselves, it makes no sense of talking about a market cap. The market cap of stellar is the number of stellar available. The market cap of a real currency like USD is the money supply. The money supply has probably a couple dozen different definitions depending on how you want to look at it and the fungibility of different representation of money. (Eg does it really make sense to consider burned bitcoin or satoshi's supposedly "never moving" bitcoin as part of the "money supply") https://en.wikipedia.org/wiki/Money_supply#United_States https://en.wikipedia.org/wiki/Money_supply#United_States There is a reason forex market economists/analysts don't talk about the "market cap" of the Japanese Yen or market cap of the British pound. There is also the whole intrinsic value of a company part. People buy stock because they believe the company is worth more than other people do. They (except for minor exceptions in the case of small investors) judge the companies future ability to generate profits and cash to decide on whether the buy or sell the stock. People buy crypto on pure speculation that other people will buy crypto in the future.
  - lmm 9y ago
    The same issues apply for thinly traded "penny stocks", and you'll see similar caution about believing market cap numbers for those companies. For blue-chip stocks the market is deep enough that you can more-or-less trust the market cap number. But yes, the only "true" valuation for anything is what someone will pay for it, the only way you can get a real answer to "what's the value of all stellars outstanding" is to collect a bid and an ask on that.
bobcostas55 9y ago
XLM trades > $600 million daily, if you spread out those $2b over a couple of weeks the impact wouldn't be that big.
- bpicolo 9y ago
  That's a lot of bots trading back and forth, though. Different to actually try to sell a crap ton of newly circulating currency. Not to mention that transactions are traceable, so people would immediately know that Stripe is selling
- achompas 9y ago
  Volume is not the whole market story.

> 2 billion lumens, which is now worth around $2 billion That's a bit exaggerated. Lumens are currently trading at $0.58 and such a big sale would have a high impact cost too.

pitaj 9y ago

Only if you sell them all at once

swsieber 9y ago
Only if you sell them all in your lifetime, I would bet.

AceJohnny2 9y ago

Indeed, this is my biggest issue with all the market-cap numbers we keep seeing. The market-cap is a made-up number calculated by (current_price x num_tokens). Except that current_price isn't fixed and the buying and selling will change it. You aren't selling to an infinite buyer market either, so you can't just sell everything at once to extract that value in one go.

donquichotte 9y ago
I agree that this is problematic, but aren't companies valued the same way? I.e. num_shares x share_price? Similar issues apply there.
- empath75 9y ago
  except amazon stock represents ownership of a corporation with assets that have value.
  - bringtheaction 9y ago
    > digital things can't have value because they aren't real That's basically what you are saying. Here's the thing though. Crypto currencies can have lots of uses. And even "simple" ones "only" made for payment like XLM and XRB have a value when they let me transact fast and cheaply. I look forward to a future where my money is mine. Where no bank can arbitrarily decide to FREEZE MY FUNDS that I have LOANED TO THEM. The banking system is broken. Sure it gives us some nice things in return like fraud protection. But increasingly I begin to wonder whether the advantages of trad-banks are worth giving them control over my money, and increasingly the answer seems to me to be no.
    - tim333 9y ago
      > digital things can't have value because they aren't real I don't think he's saying that at all. Google is pretty digital but has value because it has millions of paying customers. With things like dogecoin the value proposition is more questionable.
  - pedalpete 9y ago
    But Amazon's value is not based on it's assets. What is the value of AWS? Is it the physical servers and data-centers? Or is it the knowledge and systems which make it all operational. If you can accept the later is where the real value is, eventually you're going to get to the point where you see the REAL value is in putting these pieces together into a system where a customer can exchange $$ for the value being created. Then look at somebody like Stripe, and say, they make all the $$ just facilitating the exchange of $$ online. Now, all of a sudden these other crypto services that enable the exchange of $$ don't seem so out there or do they?
    - 0wing 9y ago
      These are common misconceptions from speculators. 1. Crypto-assets like Bitcoin/Ethereum/Steller/Ripple, etc, are created simply by typing some numbers into a piece of software. There's no underlying value, it's a number in a database. 2. Stocks have measurable value, https://en.wikipedia.org/wiki/Price%E2%80%93earnings_ratio https://en.wikipedia.org/wiki/Price%E2%80%93earnings_ratio 3. Anytime someone sells a Bitcoin or whatevercoin it requires a buyer. Similar to baseball cards, beanie babies, or other artifitially scarce yet easy to produce asset, the market is subject to supply and demand. In the case of cryptocoins, the supply is created and distributed to a small group of users who horde it, in the hope that new users will come in and purchase the coins for more than it cost to create them. This is a hallmark of a typical pyramid scam, which collapses once no more investors can be found, leaving the late adopters holding now worthless "coins". 4. Stocks in Amazon and businesses grant you legal rights, and if the company goes bankrupt you are entitled to compensation from their assets.
      - JohnJamesRambo 9y ago
        How long do you think Amazon's stock price would stay high if no new investors could be found? Don't dig too deep into what separates stocks and government issued fiat currency from pyramid schemes or what you find will trouble you. In many ways, crypto is the safer of the two. A finite amount of bitcoin will be created, can you say the same for the US dollar? My view is that everything is a pyramid scheme from the first wampum and beads that were traded by humans on down the line to where we are now. The difference is crypto is a chance to get in at the top for once. That chance was missed ages ago by our generation with regard to the US dollar.
  - benatkin 9y ago
    Traditional crypto mining burns real energy that costs real money and has a real carbon footprint, and the owners of the rigs have real pride that create a floor of how much Bitcoin will be worth, so long as it's technically sound.
  - panarky 9y ago
    You'd think so, but not really. Amazon's balance sheet [0] shows assets minus liabilities of $19 billion. So the "assets" that shareholders "own" are less than 3% of the company's $690 billion market cap. Not to mention that shareholders don't "own" those assets in any real, tangible sense. If you look around at any form of wealth, from the balance in your checking account to stocks, bonds and even the title on real property, it's all invisible, intangible and socially constructed. Not as different from cryptocurrency as one would like to think. [0] https://www.sec.gov/Archives/edgar/data/1018724/000101872417000135/amzn-20170930x10q.htm#sDDB2F8EEC1A45608A02845A43822D631 https://www.sec.gov/Archives/edgar/data/1018724/000101872417...
- benatkin 9y ago
  Yeah, they are, and in the 90s DotCom boom I remember seeing it prominently mentioned that the value of Jerry Yang's shares in Yahoo! was "on paper".
- aslkdjaslkdj 9y ago
  A company is valued in terms of the currency in it's stock exchange. A company in US has it's market cap in USD and a Japanese company has it's market cap in JPY. If you want to calculate the market cap in USD for a Japenese company, you have to use an exchange rate. Now since cryptos are currencies themselves, it makes no sense of talking about a market cap. The market cap of stellar is the number of stellar available. The market cap of a real currency like USD is the money supply. The money supply has probably a couple dozen different definitions depending on how you want to look at it and the fungibility of different representation of money. (Eg does it really make sense to consider burned bitcoin or satoshi's supposedly "never moving" bitcoin as part of the "money supply") https://en.wikipedia.org/wiki/Money_supply#United_States https://en.wikipedia.org/wiki/Money_supply#United_States There is a reason forex market economists/analysts don't talk about the "market cap" of the Japanese Yen or market cap of the British pound. There is also the whole intrinsic value of a company part. People buy stock because they believe the company is worth more than other people do. They (except for minor exceptions in the case of small investors) judge the companies future ability to generate profits and cash to decide on whether the buy or sell the stock. People buy crypto on pure speculation that other people will buy crypto in the future.
- lmm 9y ago
  The same issues apply for thinly traded "penny stocks", and you'll see similar caution about believing market cap numbers for those companies. For blue-chip stocks the market is deep enough that you can more-or-less trust the market cap number. But yes, the only "true" valuation for anything is what someone will pay for it, the only way you can get a real answer to "what's the value of all stellars outstanding" is to collect a bid and an ask on that.

bobcostas55 9y ago

XLM trades > $600 million daily, if you spread out those $2b over a couple of weeks the impact wouldn't be that big.

bpicolo 9y ago
That's a lot of bots trading back and forth, though. Different to actually try to sell a crap ton of newly circulating currency. Not to mention that transactions are traceable, so people would immediately know that Stripe is selling
achompas 9y ago
Volume is not the whole market story.