Fiat was once backed by gold — that made sense. If crypto is to succeed, it needs to be backed by a fundamental value and not mostly by speculation aspects.

Jan Brody
Jan Brody
Sep 5 · 5 min read

How to value crypto assets?

There are several methods how to evaluate a company. You can use a discounted cash flow model taking into consideration how much profits the company will generate in the future and discount those numbers to today’s value. Most of the companies in the world — traded on stock exchanges or public firms, are evaluated in this way. You can alternatively look at the value of the company’s assets — when you break it down into real estate, equipment, machinery, and compare for how much similar assets are being sold, or you can evaluate a company or a startup project based on your belief that it has developed a unique solution which one day in the future will turn into a profitable business. The last method is mostly used in the startup world. Investors believe that something revolutionary is being developed and they attach their personal value to it hoping for the riches.

But what about the crypto space? How can one tell that the value of Bitcoin and other altcoins is high or low? Bitcoin was created as a protest. Not many people know that Bitcoin was created as a reaction to the 2008 financial mess caused by the subprime crisis affecting the mortgage industry in the US due to borrowers being approved for loans they could not afford. This created a domino effect, since the world has reached a phase where everything and everybody is connected to each other. The trust in the worlds’ financial system was questioned. This is when Satoshi Nakamoto created Bitcoin, and its main idea for an alternative world, where people have the values they created under their control — in their computers, online or offline wallets. As the Bitcoin infrastructure strengthened, people were able to exchange it for fiat and other cryptocurrencies, store it safely via smart devices, renowned businesses started accepting it as a form of payment, its value was going up. Traders and bots caught up later looking for buying low, selling high strategies and bringing their added values to the value of Bitcoin and crypto.

But what is next for crypto values? Is the bet on a deteriorating political situation in the world and booming stock markets enough? No! It is not! Most of it, unfortunately, are speculation aspects — as we saw when crypto market cap collapsed from 800 billion to 100 billion USD during 2018.

Crypto communities are currently busy with creating ways to add real values to the blockchain, coming with hundreds of real word use-cases and offering their communities ways to interact with the blockchain. Some blockchains enable their communities to raise capital via ICOs on their chains, others offer a variety of smart contracts or anonymous transactions so people making them cannot be tracked. All of these use-cases are fostering innovation and progress to our society hoping for the world to listen and turn its eyes on this booming and exciting space.

What if the blockchain is backed by real assets registered as Non-fungible tokens (NFTs) ?

The community at Crown Platform is also taking its own approach to create value for its community members, contributors and strategic partners. Since its launch in October 2014 as a Bitcoin clone, it has demonstrated that the community can make steps towards creating a progressive environment, where smart ideas are pushed forward and made into reality. One of the ideas bringing real value to the Crown blockchain (next to the decentralised governance budget system and our tailor-made MN-PoS mechanism) is without a doubt the Non-fungible tokens framework (NFT). You can read the NFT technical article drafted by the Crown Platform tech lead Artem here:

“Since the beginning of the Crown Platform evolution, we wanted to build a public blockchain solution that will enable simple and fast integration with a modern distributed ledger technology. Back in August 2017, the foundational ideas of what the platform should look like were laid down. Since then, we’ve been working hard to realise those ideas and transform them into a tangible form.”

NFTs offer unique characteristics which make them different and digitally scarce. Take plane tickets for example — although they look the same, they contain passenger info which is unique. The same is actually true for other assets such as cars, buildings, legal contracts, patents — basically most physical and digital assets in the real world are non-fungible: and therein lies the huge opportunity for NFTs. NFTs have unique properties as one asset is not equal to another asset in the same set, as it is with the fungible tokens. Most tokens such as cryptocurrencies are fungible — they are mostly monetary and interchangeable, the same is true for money. One US dollar is the same as another one.

But back to our NFT framework, in simple words it is a registry subsystem which enables the community to register physical or digital assets on the Crown blockchain. Several Crown community contributors are currently working on use-cases such as a blockchain-enabled asset register for luxury goods, a startup intellectual property protection tool, and artists are starting to register their digital art on the Crown Platform NFT testnet.

Looking at this from a philosophical perspective, assets (with their underlying intrinsic values) are being registered (currently on testnet) on the Crown blockchain. This creates a situation where those who register them, trust that the Crown code and community will make their best effort to keep this information secure and immutable so they can use it as proof that they hold ownership of these assets.

Now imagine that the few use-cases that the community is currently building, will bring many, many more assets (with their own bigger underlying values) to the Crown chain. Can fundamental value derived from the potential trust created by registering assets as NFTs back the value of the blockchain?

Crown Platform

Crown is a digital token and blockchain platform enabling independence serving individuals & businesses. We are focused on legal compliance and transparency utilizing our decentralized governance model.

Jan Brody

Written by

Jan Brody

Crown Platform

Crown is a digital token and blockchain platform enabling independence serving individuals & businesses. We are focused on legal compliance and transparency utilizing our decentralized governance model.

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