Cryptoasset Valuations
Chris Burniske

Thanks very much for this. However I think there are limits to the extent that traditional macroeconomic metrics can be applied to crypto. As you’ve said, cryptocurrencies are the first “digital-native” assets — and along with that uniqueness comes uniqueness in financial attributes.

To give one example: A concept such as “velocity” has no bearing on an asset such as Factom/FCT, given that when FCT is used to access the Factom protocol, the FCT is burned.

Velocity is the rate at which money is exchanged from one transaction to another — but in the case of FCT, there is no “exchange” involved in the (non-speculative/trading) use of FCT.

Instread of exchange, there is an uncorrelated in/out bifurcation: When FCT are employed to use the protocol, they are burned. And, separately, new FCT are created at a constant rate of 73k FCT / month. So “velocity” does not apply to the FCT financial ecosystem.

To quote Factom’s founder, Paul Snow: “If people are spending 1 million dollars to put data into factom per [month], then 73K factoids should be worth 1 million dollars.” (This is of coures leaving the speculative multiple aside.)

Do you agree or disagree? Thanks again for prompting this very important discussion.

One clap, two clap, three clap, forty?

By clapping more or less, you can signal to us which stories really stand out.