Fermi Problem: Where Might Valuations Go... / Economics

[Zenaan Harkness]

On Tue, Mar 13, 2018 at 03:37:53AM -0400, grarpamp wrote:
> https://www.reddit.com/r/Bitcoincash/comments/83uxf1/finally_we_priced_cryptocurrency_bch_can_now/

Damn - a TLDR which says no more than "I'll try and explain, read
on"! Mofo!

So, having had to read the fine article, here's a tldr for those who
want it:

Proposed value of BCH:

 - treat it as a store of value, rather than inherently valueless
  - even logically this is reasonable, even "ability to facilitate
	transaction between two humans" is an inherent value for any
	currency

 - traditional fiat currencies: at least one G20 country's fiat shall
   experience hyperinflation (halve value inside a month) in the next
   30 years, and 28 other major currencies will be dragged into that
   quagmire with at least > 10% inflation for a period

 - start with M1 money supply, apparently ~$30T USD (globally)

 - 1% inflation hedge (i.e. hold this amount in DC/crypto) of this as
   a "reasonable hedge against future national inflation" -> $300BN

 - plus 'magical formula' hedge against hyperinflation -> $113BN

 - TOTAL = 300 + 113 = $413 BN (minimum baseline DC global valuation)

 - realistically, since various other actual purposes and values
   exist, DC's have a much higher inherent value proposition, e.g. a
   step towards decentralisation of currency creation, fluid (low
   cost, and low latency) cross border transactions (which PayPal
   certainly capitalized on), etc.


>From the article:

 Facts

 Hyper-Inflation is defined as when a nation's currency loses 50% of
 its value in less than a 1 month period.

 Over the last 30 years, 28 countries have entered a state of
 Hyper-Inflation.

 Over the last 30 years, 2 G20 countries have entered a state of
 Hyper-inflation.

 The 2 G20 Countries are Brazil (1990) and Russia (1992). Their M1
 money supply are approx 100BN and 300BN USD respectively.