Do GRIN and BEAM fit the Stock-to-Flow Cross Asset Model?

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“Gold and silver, like other commodities, have an intrinsic value, which is not arbitrary, but is dependent on their scarcity, the quantity of labour bestowed in procuring them, and the value of the capital employed in the mines which produce them” — David Ricardo (19th century)

Introduction

PlanB recently published a cross-asset version of his original Stock-to-Flow (S2F) model [1]. In the new analysis [2], PlanB solidified the basis of the S2F model by removing time and adding other assets like silver and gold. This new model, called S2FX, enables valuation of different assets with a single formula. In this article, I discuss how MimbleWimble coins fit this formula and estimate their future price.

Mimblewimble coins

Mimblewimble (MW) is a the name of a cryptography protocol, which provides an excellent framework for a blockchain that has good scalability, privacy, and fungibility [3]. Tested for decades, MW uses elliptic-curve cryptography that requires smaller keys than other cryptography types. Unlike Bitcoin and Ethereum, there are no addresses on a MW blockchain, and the network’s data storage is highly efficient. In practice, MW needs about 10% of the data storage requirements of the Bitcoin network. This makes MW highly scalable for storing the blockchain, significantly faster, and less centralized. One key aspect of MW blockchains is the possibility to…