If you want your token to be used as money, the only relevant metric is liquidity: how many USD/EUR/etc. are deposited into exchanges, bidding on/selling for the token in question right now?<p>To prove my point, imagine I have created a crypto currency with 2^128 currency units, and I sell you one currency unit for a thousandth of a cent. Result: my crypto currency is now the "biggest" in the world, with a market cap of ~10^35 USD.
I've been following Siacoin development very closely for the last couple of months. Their devs seem like one of the few remaining people in crypto that actually care about developing a working product/coin, vs just abusing the unregulated market and getting filthy rich.<p>Kudos to the team for getting on the front page of HN. I'm sure this will raise awareness of their product at least a little bit. Just looking at the coin itself, looks like it jumped 10 points since this blog appeared.
Are these valuations really that outrageous compared to startups? Yes they're really early, but the ETH platform is a huge force multiplier in terms of decentralized scaling engineering that you don't have to do, not to mention the intrinsic benefits it has.<p>If you think in terms of valuing based on how far a project has gone it seems crazy, but if you think in terms of valuing based on how far away it is, that actually lines up reasonably in my mind. $100M for a decent shot at eating a big chunk of a $10-100B industry in 2-3 years? I've seen crazier things in SV.<p>Obviously a lot of these are scams, but there's some good ones, and I mostly agree with which ones the market has picked.
Lots of people are seeing these ICOs as easy money. It is unbelievable how many people will invest their money (mostly bitcoin gains) into unproven teams without a product and barely a white paper. Unhappy investors from events like this may draw more attention of the SEC or CTFC.
"Market cap" is a basically ridiculous measure to use of crypto assets. It implies a realisability of price that really just isn't there.<p>Trading is too thin and the price is too volatile, even for the most-traded one, Bitcoin. Consider the recent Bitcoin flash crash on GDAX, where BTC dropped from $1184 to 6 cents - this was courtesy about 100 BTC of trades.<p>Then there's the Bitcoin "price", which is a weighted average ... including exchanges like Bitfinex, where the USD "price" includes a huge premium because you literally can't get hard currency out of Bitfinex for the foreseeable future.<p>It's a hyped number to pretend this stuff is worth more than it is and attract attention.
Enterprise value is better than market cap. Market cap doesn't accurately reflect currencies, which is why they have M numbers like M2.<p>The point in this article is that, currently outstanding currency tokens relationship to future inflated outstanding tokens is wildly different between currencies, and not accounted for in the "market cap" measurement. Thus, what many should be looking at, and aren't, is the known future inflation of the particular system.<p>When you understand that you're going to be diluted, your current tokens ecosystem price should reflect that knowledge. Their suggestion for better understanding what the "value" of a cryptotoken should be understood as is good.
I keep smelling "pump and dump" when it comes to cryptocurrency. Perhaps when the bubble bursts the honest people will be able to get to work developing something worthwhile?
Is there a reasonably safe/reliable/cheap way to short Gnosis? I'm guessing not, because there's a pretty easy $10-20 million to be made here and some hedge fund probably would have done it already if possible.<p>I wonder if a smart contract could be created on Ethereum to securely borrow Gnosis. Perhaps with Eth as collateral. Anyone with experience building Ethereum contracts care to enlighten me?
There is not a bubble. Gnosis value has been cut to $100MM. The markets are working efficiently and punishing ICOs on valuation. Many ICOs have failed and not raised money. The market is focusing on these mega projects and not looking at the whole picture.