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There is clearly non-zero utility in BTC for certain individuals. But it's also clear that a large portion of BTC is held as speculation. Have there been any

by lumost 5y ago

There is clearly non-zero utility in BTC for certain individuals. But it's also clear that a large portion of BTC is held as speculation. Have there been any formal attempts to identify fair market value out of BTC or other crypto assets based on their current use cases?

bombcar 5y ago
It’s almost an impossible question given that the “use cases” that are NOT speculating boil down to “transfer of funds” and there’s not really a difference between “transferred $1m USD as 10 bitcoins” and “transferred $1m USD as 10b dogecoins”. I guess you’d have to figure out the “total active use case market” (I.e; factor out speculation) and then work out how many coins you have available to support that. So if there’s a $100m market for transfers per month and a million coins, they may be valued at $1.
bb88 5y ago
So if you can't back a security with anything tangible then the true underlying value is 0. This means no one will buy it back if the currency falls to a value near 0. See the recent brouhaha about Titan (e.g.). Gold and silver at least have real use outside of "being pretty". That fixes the lowest possible value for gold to be above 0 somewhere. It does have some utile value, and that value is somewhere between 0 to infinity. The speculators are hoping for a "greater fool" who will buy their assets because you know, numbers go up. The criminals like it for the money laundering aspects. It's not a perfect money laundering tool, but it's certainly good enough for ransom ware (until recently when the US reclaimed some money from ransomware writers). There is some payment transfer capability, but here the utility comes at a price for some fee paid to transfer the money. The volatility keeps it from having very much utility as a store of value. Price was once over $60k but now dropped under $30k then back up to $34k. But volatility is not what you want as a store of value. You want stability and assets backed by something tangible. Largely it seems like the utility value is that "people think there's actual utility" when in fact, the utility is provided by speculators.

by lumost 5y ago

bombcar 5y ago

It’s almost an impossible question given that the “use cases” that are NOT speculating boil down to “transfer of funds” and there’s not really a difference between “transferred $1m USD as 10 bitcoins” and “transferred $1m USD as 10b dogecoins”. I guess you’d have to figure out the “total active use case market” (I.e; factor out speculation) and then work out how many coins you have available to support that. So if there’s a $100m market for transfers per month and a million coins, they may be valued at $1.

bb88 5y ago

So if you can't back a security with anything tangible then the true underlying value is 0. This means no one will buy it back if the currency falls to a value near 0. See the recent brouhaha about Titan (e.g.). Gold and silver at least have real use outside of "being pretty". That fixes the lowest possible value for gold to be above 0 somewhere. It does have some utile value, and that value is somewhere between 0 to infinity. The speculators are hoping for a "greater fool" who will buy their assets because you know, numbers go up. The criminals like it for the money laundering aspects. It's not a perfect money laundering tool, but it's certainly good enough for ransom ware (until recently when the US reclaimed some money from ransomware writers). There is some payment transfer capability, but here the utility comes at a price for some fee paid to transfer the money. The volatility keeps it from having very much utility as a store of value. Price was once over $60k but now dropped under $30k then back up to $34k. But volatility is not what you want as a store of value. You want stability and assets backed by something tangible. Largely it seems like the utility value is that "people think there's actual utility" when in fact, the utility is provided by speculators.