Crypto Dabble.

Zola.

HCIMbtw said:

Aegis, please read my post on the last page, it explains quite a few points you are questioning. ETH is setting up to also burn its network tokens as part of transaction to avoid the diluation you talk about. 

P.s. i definitely don't believe bitcoin is the only currency with calculable value.. i actually find bitcoin much harder than others like ETH to value and disagree with a lot of points made by zola.. just couldn't be bothered with that debate

Curious to know more about this. 

Curious about the point of finding the value of ETH easy, but you struggle to find the value of BTC. interesting...

No one even knows the circulating supply of ETH!!  It is a dog's dinner of a project. The average gas fee is over $50. Utterly unusable. Solana will probably eat its lunch. 

HCIMbtw

tebbins said:

HCIMbtw said:

Now to the questions - How do you value crypto? 

It's difficult, one argument I have heard put forward is metcalfes law, which essentially says the value of a network is proportional to the square number of nodes within it. Essentially valuing a decentralised system on its scale of use. But I believe with systems like ETH, SOL, DOT you can also model application for use in potential industries for trade. 

What is bitcoin backed by? 
Belief and finite supply. A lack of belief in the central regulation of FIAT currency, the ability of it to be printed in perpetuity without bEing underpinned by an asset.

You are buying shares in something? 
Yes and no, in some circumstances it can be like a share in terms of governance, but in other instances it is just a currency, and in other instances it is an asset running a network. 

Personally I see most value in the network crypto like ETH, SOL, DOT and others which underpins apps will be needed in future. If you own the asset you wont even need to sell it to generate value, you will be able to stake the asset. Where people who don't own it, pay to use your asset and you generate interest and passive income from allowing your asset to be used to run the network.

An NFT is essentially a collectible.
Why should "backing" or underpinning currency with an asset (which?) Make it worth more?
Your last para makes no sense.
Your para on valuations makes literally no sense, Metcalfe's law is not applicable to this... At all...

An NFT is essentially a collectible
An NFT isn't just a collectible, you are thinking about the narrow lens they are currently used for digital art I think, the stuff you can read about in mainstream media. 

An NFT verifies ownership of a digital asset and has a number of other uses I can get my head around practical commercial application of. Digital kills the second hand computer games market, I pay Playstation £40, download a game, it lives and dies on that PS4. With an NFT market in creation I could trade that game to somebody else, for a fee. 

Why would a developer support that? Well because when they issue the NFT they include a 20% royalty rate on any future sale, and thus the developer continues to earn revenue from an old publication, and secondary markets are established. Could work in music, art probably in other industries and a whole other load of areas I haven't thought of. 

Why should backing or underpinning currency with an asset make it worth more? 
I mean i'm not an ecomics expert, but pretty the answer is based around inflation.. Venezuela is probably a great example of what can happen when currency isn't underpinned by an asset 

Last para makes no sense
It makes sense to me, please read up on proof of stake to understand what I am talking about 

Metcalfes law 
'says that a network's value is proportional to the square of the number of nodes in the network. The end nodes can be computers, servers and simply users' 

Decentralised networks literally run through nodes hosted by thousands of users and developers across the world, it seems directly relevant to helping us understand the relative value of different crypto networks. And I believe the point I made around looking at the  use applications of the network style crypto would be your best bet at overlaying ££ value. Please feel free to explain why you think metcalfes law isn't relevant at all?

HCIMbtw

Zola. said:

HCIMbtw said:

Aegis, please read my post on the last page, it explains quite a few points you are questioning. ETH is setting up to also burn its network tokens as part of transaction to avoid the diluation you talk about. 

P.s. i definitely don't believe bitcoin is the only currency with calculable value.. i actually find bitcoin much harder than others like ETH to value and disagree with a lot of points made by zola.. just couldn't be bothered with that debate

Curious to know more about this. 

Curious about the point of finding the value of ETH easy, but you struggle to find the value of BTC. interesting...

No one even knows the circulating supply of ETH!!  It is a dog's dinner of a project. The average gas fee is over $50. Utterly unusable. Solana will probably eat its lunch. 

I just feel it is far easier to apply £ value modelling to something like ETH/SOL/DOT which have applications and industries working on top of them. In theory take the value and scale of applications running on them, the volume of transaction, and model the proportional value the network will generate based on them being used.

To me there seems like a logical process there however difficult each of those metrics would be to pull out.

For currency like BTC/XRP/DOGE, my perspecitive/opinion is that it is valued just on belief.. 

Happy to have my mind changed, I think BTC is here to stay and will be the one digital currency to rule them all, and I invest a bit in it, but I can't get my head around trying to value it. 

HCIMbtw

Aegis said:

My main question is still how you work out the value of one coin against another, especially if you are comparing one that was initially a clone of the other.  If the argument is that a measure of the widespreadedness of a network is the method of valuation, then I can at least start to think about how that works.  The main issue I have is that in traditional investments, an asset is worth the same whether concentrated into 10 owners or spread into 1 million.  In this model, the entire asset value would increase going from 10 holders to a million without any actual change in the asset itself, which strikes me as unusual to say the least.

It may be worth comparing the tokens which confer some utility to carbon credits.  These certainly have utility, but were never intended to be investments when first concocted, but the limited supply and the utility combined together to give rise to some really abusive sales and attempts to ramp up prices or sell well over market level.  Unfortunately people will get excited over the "next big thing" periodically, and you have price increases completely detached from any fundamentals.

bear with me while I theorise here

but in your first paragraph I think it would be reasonable to consider that owners of a networks token maybe don't tip the balance of its value very much. However, the amount of nodes set up and developers working on it affect the value more, then on top of that the number of applications and the amount of transactions taking place on a network increase the value further. 

Then we have factors like security, transaction speed which will also would adjust value. Then the value of the exchanges and transactions taking place would also be considered. 

Then this would all be affected by the protocol itself, whether currency is generated, finite, deflationary. 

I't is certainly incredibly complicated. 

The thing that really got my interest was the clarity in use case of ETH. ETH will also have these L2 protocols that run on top of it to make it more efficient, those L2s need the ETH network and it will underpin so much future digital trade, it's just not going to go away.. The reason I ask questions about SOL and DOT is because they already solve problems ETH is now working to retrospectively address, but it feels like L2s are already addressing the problems

But yep, they don't fit into traditional cost models, if they could better fit into standard models somebody would've done it already

p.s. since you mention carbon credits, i've no doubt some blockchain could be super valuable in regulating ownership and trade.. so many issues with quality and integrity of credits

robatwork

adam06_2 said:

Crypto is an investment. 

It's not. Saying it's so doesn't make it so.  Just maybe, by 2040 it will be on the same level as Forex "investing"

At best it's speculation. 

One of other forum newbies called it a belief system on p20. That's another term for religion. Perhaps that's what it is, and there's nobody so convinced but unconvincing as a religious zealot. 

Rather like religious fanatics, they can only see the one true way, have faith all will be rewarded at a later date. Rational people prefer facts and evidence. 

tebbins

HCIMbtw said:

tebbins said:

HCIMbtw said:

Now to the questions - How do you value crypto? 

It's difficult, one argument I have heard put forward is metcalfes law, which essentially says the value of a network is proportional to the square number of nodes within it. Essentially valuing a decentralised system on its scale of use. But I believe with systems like ETH, SOL, DOT you can also model application for use in potential industries for trade. 

What is bitcoin backed by? 
Belief and finite supply. A lack of belief in the central regulation of FIAT currency, the ability of it to be printed in perpetuity without bEing underpinned by an asset.

You are buying shares in something? 
Yes and no, in some circumstances it can be like a share in terms of governance, but in other instances it is just a currency, and in other instances it is an asset running a network. 

Personally I see most value in the network crypto like ETH, SOL, DOT and others which underpins apps will be needed in future. If you own the asset you wont even need to sell it to generate value, you will be able to stake the asset. Where people who don't own it, pay to use your asset and you generate interest and passive income from allowing your asset to be used to run the network.

An NFT is essentially a collectible.
Why should "backing" or underpinning currency with an asset (which?) Make it worth more?
Your last para makes no sense.
Your para on valuations makes literally no sense, Metcalfe's law is not applicable to this... At all...

An NFT is essentially a collectible
An NFT isn't just a collectible, you are thinking about the narrow lens they are currently used for digital art I think, the stuff you can read about in mainstream media. 

An NFT verifies ownership of a digital asset and has a number of other uses I can get my head around practical commercial application of. Digital kills the second hand computer games market, I pay Playstation £40, download a game, it lives and dies on that PS4. With an NFT market in creation I could trade that game to somebody else, for a fee. 

Why would a developer support that? Well because when they issue the NFT they include a 20% royalty rate on any future sale, and thus the developer continues to earn revenue from an old publication, and secondary markets are established. Could work in music, art probably in other industries and a whole other load of areas I haven't thought of. 

Why should backing or underpinning currency with an asset make it worth more? 
I mean i'm not an ecomics expert, but pretty the answer is based around inflation.. Venezuela is probably a great example of what can happen when currency isn't underpinned by an asset 

Last para makes no sense
It makes sense to me, please read up on proof of stake to understand what I am talking about 

Metcalfes law 
'says that a network's value is proportional to the square of the number of nodes in the network. The end nodes can be computers, servers and simply users' 

Decentralised networks literally run through nodes hosted by thousands of users and developers across the world, it seems directly relevant to helping us understand the relative value of different crypto networks. And I believe the point I made around looking at the  use applications of the network style crypto would be your best bet at overlaying ££ value. Please feel free to explain why you think metcalfes law isn't relevant at all?

Re valuations - how does Metcalfe's law, when applied to crypto enable one to value a crypto asset and determine a fair price, if it is under/overvalued? This is a tendency in compsci, not a law of physics.

Name some crypto assets that generate income and how, in ways that are not just replicating existing capital markets using crypto assets as a currency.
£ is backed by (and by faith in) the British government which hasn't defaulted on its debt since 1692, by the UK economy and by its ongoing use.Why does "backing" it by another asset such as gold add anything? What does backing even mean and why is it even necessary? Without using the extreme example fallacy.

MarkCarnage

Aegis said:

My main question is still how you work out the value of one coin against another, especially if you are comparing one that was initially a clone of the other.  If the argument is that a measure of the widespreadedness of a network is the method of valuation, then I can at least start to think about how that works.  The main issue I have is that in traditional investments, an asset is worth the same whether concentrated into 10 owners or spread into 1 million.  In this model, the entire asset value would increase going from 10 holders to a million without any actual change in the asset itself, which strikes me as unusual to say the least.

It may be worth comparing the tokens which confer some utility to carbon credits.  These certainly have utility, but were never intended to be investments when first concocted, but the limited supply and the utility combined together to give rise to some really abusive sales and attempts to ramp up prices or sell well over market level.  Unfortunately people will get excited over the "next big thing" periodically, and you have price increases completely detached from any fundamentals.

I can see carbon credits and their trading becoming the next market abuse scandal. As a Trustee of a major pension fund it concerns me that in the dash for Net Zero (whatever that might be) there is going to be some messy things happening in that space. 

HCIMbtw

tebbins said:

HCIMbtw said:

tebbins said:

HCIMbtw said:

Now to the questions - How do you value crypto? 

It's difficult, one argument I have heard put forward is metcalfes law, which essentially says the value of a network is proportional to the square number of nodes within it. Essentially valuing a decentralised system on its scale of use. But I believe with systems like ETH, SOL, DOT you can also model application for use in potential industries for trade. 

What is bitcoin backed by? 
Belief and finite supply. A lack of belief in the central regulation of FIAT currency, the ability of it to be printed in perpetuity without bEing underpinned by an asset.

You are buying shares in something? 
Yes and no, in some circumstances it can be like a share in terms of governance, but in other instances it is just a currency, and in other instances it is an asset running a network. 

Personally I see most value in the network crypto like ETH, SOL, DOT and others which underpins apps will be needed in future. If you own the asset you wont even need to sell it to generate value, you will be able to stake the asset. Where people who don't own it, pay to use your asset and you generate interest and passive income from allowing your asset to be used to run the network.

An NFT is essentially a collectible.
Why should "backing" or underpinning currency with an asset (which?) Make it worth more?
Your last para makes no sense.
Your para on valuations makes literally no sense, Metcalfe's law is not applicable to this... At all...

An NFT is essentially a collectible
An NFT isn't just a collectible, you are thinking about the narrow lens they are currently used for digital art I think, the stuff you can read about in mainstream media. 

An NFT verifies ownership of a digital asset and has a number of other uses I can get my head around practical commercial application of. Digital kills the second hand computer games market, I pay Playstation £40, download a game, it lives and dies on that PS4. With an NFT market in creation I could trade that game to somebody else, for a fee. 

Why would a developer support that? Well because when they issue the NFT they include a 20% royalty rate on any future sale, and thus the developer continues to earn revenue from an old publication, and secondary markets are established. Could work in music, art probably in other industries and a whole other load of areas I haven't thought of. 

Why should backing or underpinning currency with an asset make it worth more? 
I mean i'm not an ecomics expert, but pretty the answer is based around inflation.. Venezuela is probably a great example of what can happen when currency isn't underpinned by an asset 

Last para makes no sense
It makes sense to me, please read up on proof of stake to understand what I am talking about 

Metcalfes law 
'says that a network's value is proportional to the square of the number of nodes in the network. The end nodes can be computers, servers and simply users' 

Decentralised networks literally run through nodes hosted by thousands of users and developers across the world, it seems directly relevant to helping us understand the relative value of different crypto networks. And I believe the point I made around looking at the  use applications of the network style crypto would be your best bet at overlaying ££ value. Please feel free to explain why you think metcalfes law isn't relevant at all?

Re valuations - how does Metcalfe's law, when applied to crypto enable one to value a crypto asset and determine a fair price, if it is under/overvalued? This is a tendency in compsci, not a law of physics.

Name some crypto assets that generate income and how, in ways that are not just replicating existing capital markets using crypto assets as a currency.
£ is backed by (and by faith in) the British government which hasn't defaulted on its debt since 1692, by the UK economy and by its ongoing use.Why does "backing" it by another asset such as gold add anything? What does backing even mean and why is it even necessary? Without using the extreme example fallacy.

Sorry are u trying to argue metcalfes law isn't relevant because it's not a law of physics? 

We are talking about network evaluation, and it's the most relevant basic model we have.

U want information on crypto that generates income, again I repeat please read up on proof of stake.

I mean I made my point about why backing can be necessary as a means to mitigate hyper inflation, u can ignore or, or ask me the same question again.. I don't really have many points to make about backing other than the ability of central banks and governments just to print to infinity

Zola.

Every nation that went off the gold or silver standard (money redeemable in hard assets) has effectively defaulted on their debt. Now its a bit of a slow motion car crash as central banks just print and debase their nations currency over and over...a tax on its citizens... Forever raising national debt limits and getting deeper in the hole.

All fiat currencies die eventually.. Not to sound alarmist, but how does this madness end:

https://www.usdebtclock.org/world-debt-clock.html

Whether you are into "crypto" or not, you can easily see that the system we have is a bit borked. 

tebbins

HCIMbtw said:

tebbins said:

HCIMbtw said:

tebbins said:

HCIMbtw said:

Now to the questions - How do you value crypto? 

It's difficult, one argument I have heard put forward is metcalfes law, which essentially says the value of a network is proportional to the square number of nodes within it. Essentially valuing a decentralised system on its scale of use. But I believe with systems like ETH, SOL, DOT you can also model application for use in potential industries for trade. 

What is bitcoin backed by? 
Belief and finite supply. A lack of belief in the central regulation of FIAT currency, the ability of it to be printed in perpetuity without bEing underpinned by an asset.

You are buying shares in something? 
Yes and no, in some circumstances it can be like a share in terms of governance, but in other instances it is just a currency, and in other instances it is an asset running a network. 

Personally I see most value in the network crypto like ETH, SOL, DOT and others which underpins apps will be needed in future. If you own the asset you wont even need to sell it to generate value, you will be able to stake the asset. Where people who don't own it, pay to use your asset and you generate interest and passive income from allowing your asset to be used to run the network.

An NFT is essentially a collectible.
Why should "backing" or underpinning currency with an asset (which?) Make it worth more?
Your last para makes no sense.
Your para on valuations makes literally no sense, Metcalfe's law is not applicable to this... At all...

An NFT is essentially a collectible
An NFT isn't just a collectible, you are thinking about the narrow lens they are currently used for digital art I think, the stuff you can read about in mainstream media. 

An NFT verifies ownership of a digital asset and has a number of other uses I can get my head around practical commercial application of. Digital kills the second hand computer games market, I pay Playstation £40, download a game, it lives and dies on that PS4. With an NFT market in creation I could trade that game to somebody else, for a fee. 

Why would a developer support that? Well because when they issue the NFT they include a 20% royalty rate on any future sale, and thus the developer continues to earn revenue from an old publication, and secondary markets are established. Could work in music, art probably in other industries and a whole other load of areas I haven't thought of. 

Why should backing or underpinning currency with an asset make it worth more? 
I mean i'm not an ecomics expert, but pretty the answer is based around inflation.. Venezuela is probably a great example of what can happen when currency isn't underpinned by an asset 

Last para makes no sense
It makes sense to me, please read up on proof of stake to understand what I am talking about 

Metcalfes law 
'says that a network's value is proportional to the square of the number of nodes in the network. The end nodes can be computers, servers and simply users' 

Decentralised networks literally run through nodes hosted by thousands of users and developers across the world, it seems directly relevant to helping us understand the relative value of different crypto networks. And I believe the point I made around looking at the  use applications of the network style crypto would be your best bet at overlaying ££ value. Please feel free to explain why you think metcalfes law isn't relevant at all?

Re valuations - how does Metcalfe's law, when applied to crypto enable one to value a crypto asset and determine a fair price, if it is under/overvalued? This is a tendency in compsci, not a law of physics.

Name some crypto assets that generate income and how, in ways that are not just replicating existing capital markets using crypto assets as a currency.
£ is backed by (and by faith in) the British government which hasn't defaulted on its debt since 1692, by the UK economy and by its ongoing use.Why does "backing" it by another asset such as gold add anything? What does backing even mean and why is it even necessary? Without using the extreme example fallacy.

Sorry are u trying to argue metcalfes law isn't relevant because it's not a law of physics? 

No I'm arguing it doesn't enable putting a £ value on crypto assets. Please explain how it does. I'm also seperately making sure no one thinks it is an absolute law as with those of the natural sciences. 

We are talking about network evaluation, and it's the most relevant basic model we have.

U want information on crypto that generates income, again I repeat please read up on proof of stake.

You're the one asserting, post some links, demonstrate/provide evidence.

I mean I made my point about why backing can be necessary as a means to mitigate hyper inflation, u can ignore or, or ask me the same question again.. I don't really have many points to make about backing other than the ability of central banks and governments just to print to infinity

Again, what does a currency being "backed" by an asset such as gold mean and how is that better? People are welcome to accept anything as a currency for goods and services rendered. I disagree with the notion in modern economics that low but positive inflation is desirable, as until the post war Bretton Woods era (during which time inflation has been seen as secondary to full employment, security and stability concerns, you can also blame boomer demographics) the £ had held its value for centuries. In spite of that the £ continues to fulfil the basic functions of currency.

Zola. said:

Every nation that went off the gold or silver standard (money redeemable in hard assets) has effectively defaulted on their debt. Now its a bit of a slow motion car crash as central banks just print and debase their nations currency over and over...a tax on its citizens... Forever raising national debt limits and getting deeper in the hole.

All fiat currencies die eventually.. Not to sound alarmist, but how does this madness end:

https://www.usdebtclock.org/world-debt-clock.html

Whether you are into "crypto" or not, you can easily see that the system we have is a bit borked. 

Again, what is a hard asset and how is it any different from fiat?
Name a developed country that came off Bretton Woods and defaulted on its debt or is in an unsustainable debt cycle (don't even bother saying Japan). Explain inflation during Bretton Woods?
Cut it with the mystery and melodrama.