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The market value of the Nxt network should reflect the present value of all future (discounted) cash flows.
more or less true. It's not just cash flows because the software also supports(and charges for) asset issuance, trades, and other upcoming features like credit and virtual corporations.
When I say cash flows I mean money, not shares of Nxt. If the software "supports (and charges for) asset issuance, trades, and other upcoming features like credit and virtual corporations," then the Nxt network should earn money for that service and distribute it to its share holders.
that's precisely what happens. The TX fees go to the owners of NXT in proportion to their holdings(roughly). It's a stochastic process.
I suppose the way Nxt earns money is by people buying Nxt (with bitcoin for example) for the purpose of consuming their Nxt tokens to buy some service (rather than forging). This is what gives you the "E" in the P/E ratio. So if it costs $1 to issue a "virtual corporation" and that $1 gets used up (distributed across the network to forgers), then the network earned $1.
I did some quick calculations and at a 10% cost of capital (cryptos are risky), the Nxt network would need to consume about $10,400 / day in fees (for transactions, issuing virtual companies and assets, etc.) to support it's current $38,000,000 market cap.
I did some quick calculations and at a 10% cost of capital (cryptos are risky), the Nxt network would need to consume about $10,400 / day in fees (for transactions, issuing virtual companies and assets, etc.) to support it's current $38,000,000 market cap.
you are quite confused sir. When we speak of P/E in NXT we're talking about how much TX fees you earn per NXT. What you just mentioned here is APPRECIATION or Capital Gains, that's not P/E.
-bm
