Comparing Bitcoin with banks is, IMHO, inappropriate. Banks are an investment vehicle working by delegation and trust. The vast majority of financial blunders are made by banks and their centralized decision making, NOT by individuals. Bitcoin is very different, you can't move significant amounts of money similar with how banks are doing, like in time and volumes. So I don't think it helps us understand the phenomenon if we're comparing Bitcoin with banks. It certainly is a currency, but it's not following the traditional ways of processing money. I do not know which these ways are and for what is worth I think we're assisting at the very birth of these processes as we talk.
On what grounds your affirmation about the "normal" Bitcoin pice ($200)? Very curious how you got to that one...
No, act in good faith in this thought experiment. As modern banks have not existed before the big bang as a source of primordial evil, they got invented for a reason and it was the increased amount the new world had in gold currency.
Core developers have told that soon as Bitcoin increases in value Bitcoin transactions will mostly be done by banks (financial institutions) on chain, and almost everybody that has not a significant amount of Bitcoin would have to use off chain alternatives like the lightning network. Coinbase already is valuated as the first banking system of Bitcoin, naturally owned mostly by NASDAQ, just like blockstream.
We are in the early days of Bitcoin banking as mainstream adoption is not completed and BItcoin is relatively distributed as of now.
The bitcoin network has a value by developers, foundation association (like the Linux Foundation does) and by hashing power.
9 million terahashes per second. By ASIC miner machines the average cost is close to $200/TH. This is close to 1.8 billions of dollars in computational power. Cost of running the network as of electricity depending on place of the world, in 24 hours is close to 10 millions of dollars a day. Add a couple more millions per rent and other operational costs.
The foundation must be close to 500 millions of dollars. So, for an operational year, as most companies are valuated on average (remember Linux is distributed and yet it has not added price) that's 3 - 6 billions of dollars. Divide in 16.5 million bitcoins and there you go.
The rest is branding. So yeah, 65 billions of dollars in branding and trading pumping. But don't worry it will increase in value more, a lot more.
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As somebody who went through the process of selling a company which he founded and grew, I dare to think that your valuation process is highly biased. You're confusing value of assets (Bitcoins) with shares in a company (a potential company that is the Bitcoin "manager"). In our case, there's no such thing, but even in that case, any due diligence process will take into account far more than just the rough, financial numbers. There are things like intellectual property, social impact, market contingency and alike. And it will take into account, primarily, the market price for any goods or assets.
And the market price right now for Bitcoin is tickling the $4000 mark. It may be that the market is inflated right now, but if you ask me, I don't think it is. Of course, a correction may be due, but the influx of value in the network gained too much momentum to be stopped or to fall abruptly.
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Yeah, valuation as shares is what I did. It would most likely not apply as it's open source. It would actually be chaper as an open-source valuation. Intellectual property applies maybe to Satoshi, but not to Bitcoin as it's open-source, the impact is already in the foundation equation. That's the reason Blockstream has probably applied for defensive patents, as of now Bitcoin can claim nothing extra for valuation.
Most of the current price is branding and over-trading small volumes.
This market is not due for a significant correction (I prefer the term fall in price, is less biased) is most likely getting ready for an explosive expansion. If the price is what you worry about, don't. It will increase beyond your wildest dreams. The consequences of this will most likely not be paid by us.
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