Topic: A fair valuation of bitcoin (Read 1115 times)

How did a troll snag the username "bitcoin?"

Fair value for a bitcoin? No such thing i'm afraid 

I brought some over valued coins at $100 recently on the expectation that other people after me will continue buying them. Thus on the expectation of future tulip buyers paying more than I did. What fun 

The value of the network and the bitcoin protocol is that it makes some things possible that without it they wouldn't be, so it brings added value to this material world. The usefulness of it is related with the resources it takes and the amount of traffic it has. That is: how much it is being used. That's why miners are paid, in bitcoins (rewards + transaction fees) to bring about this useful network and make it has efficient and secure as possible. In a sense we could say that the new bitcoins that enter circulation to the lucky miner's designated bitcoin addresses are like "shares" of a multinational network company - that theoretically could be sold as a whole, if all bitcoin owners - in a totally unrealistic scenario - accepted to sell their parts of its "ownership", so that it could to be used as corporate/private intranet network separate from the rest of the world/net.
And these "shares ownership", that in a sense is what the bitcoins provide - as an aanalogy - is what puts you in power and with privileges to operate it - this valuable network - accordingly to how much you own.
So yeah, bitcoins are backed by their demand only. It is the simple law of demand and supply that regulates its price in the trading markets. But still, they are valuable, because they bring about to this material world a whole new lot of possibilities, sprouting something that didn't exist before and that can compete in value with any other material resources, goods or services, with its market value established by its usefulness and scarcity and for that matter its demand and supply.
It is a real thing. Virtual currency only means it exists on the internet, in a digital network, and not on your pocket. Still, it is as material and able to compete for its market value, as anything else that holds value, usefulness and scarcity.
It is still pretty much in a legal gray area, as a currency-like commodity. But it has pretty much all the necessary attributes that we associate with money, and with the medium of exchange of excellence, which used to be gold, and is now becoming 'Bitcoin: the fastest growing currency in the world; Digital cash for the internet society without banks or financial institutions controlling it"

Good point.

I just take the value at the beginning of december because the price has been relatively stable in the previous months and from there the rally starts.

But of course I have no reason to believe that $13 in december was a fair value.

All of this is just an approximation. 

This is a good point, though I am still interested in seeing what would be the result of the above analysis.

Why do you assume the fair value in Dec 2012 was correct while at the same time assuming the current fair value isn't?
The same market which fairly valued it in Dec unfairly valued it now?

Maybe the fair value in Dec 2012 was $80 and it was suppressed either due to negative sentiment or by manipulation.   

Hi guys,

I already posted this elsewhere and I thought I might also share it with you. You can probably help me to find the exact data. Maybe this has been discussed before.

What I show below is a very rough estimate and it is a lower estimate of value assuming that a certain amount of money has to be spread over the existing bitcoins.


Beginning of December 2012 the quotation of BTC was about $13.

Since then, the number of BTCs went up from 10.498.000 to 11.982.000.

The increase of the number of wallets at bloxkchain.info is a good proxy for the increase of bitcoin users. In that period it has gone from 45.200 to 181.620 according to the data in the charts of blockchain.info.

(181.620)/(45.200) x (10.498.000)/(11.982.000) x 13 $ = [SIZE="6"]45.77 $[/SIZE]


In order to refine this computation it will be more accurate to use not the total number of bitcoins, but the number of bitcoins in circulation, i.e. substract the number of bitcoins that haven't moved in one year for example. This can be extracted from the blockchain. Anyone can point a linkk to this data? If the frozen BTCs represent about

Also, is there historic data of the number of wallets at blockchain.info?