This post is the product of a four-hour, very enlightening conversation between Willy Woo of woobull.com and I. He’s a brilliant, creative Bitcoin data-wizard. We cover the mechanics and application of the NVT Ratio (Network Value to Transactions Ratio), a ratio Willy Woo invented to track bubbles and buying opportunities in Bitcoin and other Cryptocurrencies. We cover cryptoasset analysis and talk about the innovation and disruption caused by Bitcoin and Cryptocurrencies. Enjoy.
Introduction: Who is Willy Woo?
Willy Woo: “I’m specifically a Cryptocurrency researcher as I’m trying to find the underlying stuff that people haven’t figured out yet. If you go to Wall Street and stocks, there’s all manners of indicators and calculations you can do that are centuries old. Cryptocurrencies are new and I’m coming up with new stuff so we can start to understand this field. People talk about Bitcoin being in a bubble, there’s no intrinsic value and what I’m doing, is showing actually there is intrinsic value and here are the indicators. This is a new field of Cryptocurrencies, these metrics are what’s relevant here. We didn’t know how to value internet stocks in the 1990’s. P/E ratios was through the roof and people didn’t understand zero marginal cost of companies. What if you reach the world at zero cost, what does it mean and how to value that stuff? It’s the same thing with Bitcoin. These aren’t companies so there is no earnings. How do you value it?”
Willy Woo: “What I like doing is just getting the data and plot it against each other and try to look at correlations. Just go very empirical. Then you go “ah why is that happening?” And then you go a layer deeper and usually shit comes out.”
Norupp: “You always know what you’re looking for?”
Willy Woo: “I don’t know what I’m looking for, actually. I’m looking for patterns and trends. “What happens if I do this? Boom, whoa that’s interesting, what does it mean?” And you kind of develop a thesis behind what it’s showing you and then you do other things to try to prove that it’s right or wrong. Then you might come up with another bunch of questions and you just keep going down this rabbit hole and every now and then you come up with useful stuff.
Norupp: “Sounds cool. So, it’s experimentation.”
Willy Woo: “Yeah I think it’s like art. Art is grabbing other people’s ideas and go “oh that’s cool what if you change it this way”. It just keeps going.”
Full interview here: Willy Woo Interview: The NVT Ratio and Future of Cryptocurrencies
Originally published at www.norupp.com on October 19, 2017.