Cryptoasset Valuations

Recently, an increasing number of crypto market participants and observers have become interested in a framework for valuing cryptoassets. Over the years many a dinosaur has proclaimed bitcoin valueless, an asset worse than tulips (at least with tulips you got a flower). Now they’re trying to figure out how valuable these assets really are. That’s a big win for the magic internet money community.

In this piece I share some early attempts at crypto valuations to give perspective on how early we still are, then discuss the theory I’m currently using and why, before walking through a fictional bandwidth coin valuation that includes a link to the actual model. Each section operates as a standalone, so feel free to skip amongst them.

Early Days of Cryptoasset Valuation

The first time I attempted to value bitcoin was at ARK Invest, where I started as a buy-side analyst in 2014. ARK became the first public fund manager to invest in bitcoin in September of 2015, and to do so we had to have some basis to justify current prices ($200’s), or at least quantify the potential for significant asset appreciation. Other asset managers will have to do the same as part of their fiduciary duty, which is one reason everyone’s become so interested in cryptoasset valuations. Below is an example valuation from a paper I wrote with Dr. Arthur B. Laffer to complement ARK’s 2015 investment, which serves as a nice starting point.

While an overly simplified assessment of value, this graph gets across a few key concepts, mainly total addressable market (TAM), percent penetration of that market, velocity, and number of coins outstanding…

Read More: Cryptoasset Valuations – Chris Burniske – Medium

Quelle: welt.de

Von Anja Ettel, Holger Zschäpitz

Die Studie der EZB-Ökonomen kommt zu einem wenig schmeichelhaften Ergebnis. Selbst 18 Jahre nach der Euro-Einführung zeigt sich noch ein starkes Nord-Süd-Gefälle. Die Hauptschuld tragen bestimmte Mitgliedsländer.

Als Motor der Integration ist Europas Gemeinschaftswährung gescheitert. Das haben jetzt ausgerechnet Ökonomen der EZB in ihrer Studie erkannt. Die Hauptschuld für das wirtschaftliche Elend tragen bestimmte Mitgliedsländer.
Wenn die Ökonomen der Europäischen Zentralbank (EZB) etwas Wichtiges erforscht haben, laden die Währungshüter vor der Veröffentlichung gern Journalisten zum Hintergrundgespräch. Schließlich veröffentlichen die zahlreichen EZB-Volkswirte so viele Studien, dass die meisten Papiere ohne ein solches Briefing sang- und klanglos in der breiten Öffentlichkeit untergehen würden.

Auch das aktuelle Papier, eine Langzeitbetrachtung über die „reale Konvergenz in der Euro-Zone“, war der EZB eine solche Hintergrundrunde wert. Immerhin geht es um eine der besonders heiklen Fragen der Währungsunion.

Quelle: Infografik Die Welt

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Source: cuvialabs.com

Joel Monegro wrote an insightful piece on crypto-economics called “The Fat Protocol” .  In it,  he concludes that unlike the Internet which is monetized at the application level,  the Blockchain is monetized at the protocol level.    This is analogous to owning a piece of TCP/IP and deriving an economic benefit every time it is utilized.   We created the Monegro Index as a homage to Joel and to clearly illustrate and track this crypto-economic principle.

The economic implication of “The Fat Protocol” are many.   As an investor in a Blockchain application or sub-token,  you are giving up protocol token for app tokens,  which are arguably much less valuable.  As a blockchain app developer,  you are giving up app tokens in exchange for protocol tokens.   Unlike the Internet,  there is an economic disincentive to standardize.   Interesting to see how this all shakes out.

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Source: simplytradingtips.com Twitter Google+ Pinterest Email SumoMe

My look when I see candlestick

This was the exact reaction I had when I understood the power of reading candlestick charts and how reading them helped me become the boss of my own finances.

By the end of this post you will have a firm understanding on everything you need to know about candlestick charts as well as how to read candlestick charts like a pro. This guide will serve you as your personal reference when it comes to understanding candlestick charts; so bookmark this page right now.

Let’s begin!

Trading is a game, a game of war. It is the war between buyers and sellers, where Candlestick charts are scoreboards which indicate who is winning.

Candlestick charts need various data to form their shape; data about the sessions’ OHLC (Open, High, low and Close) price action. Each candlestick represents a single session, and a session can be of 1, 5,15, 30 minutes to hours or even days and weeks.

Reading candlestick charts and finding their patterns are as easy as learning how to drive. We might feel confused at first, but soon after the initial phase it becomes the easiest thing to do.

Candlestick charts are thought to have been invented by a Japanese named Homma. Since they were developed by the Japanese they are also known as “Japanese Candlestick charts”, and they were later introduced to the western world by “Steve Nison”.

Abstract: In this piece we revisit “The DAO” and the events following its failure.  We analyse what happened to the various buckets of funds inside The DAO, on both sides of the chainsplit which it caused.  We identify US$140 million of unclaimed funds still inside what is left of The DAO.

Key points

  • The DAO hacker appears to control tokens worth approximately US$60 million.
  • There are currently around US$140 million of unclaimed funds still inside The DAO withdrawal contracts.
  • In June 2017, the US Dollar value of funds unclaimed inside The DAO was higher than the value of the amount initially raised in May 2016.
  • A deadline is approaching, 10 January 2018, after which some of the funds, around US$26 million, may no longer be available to be claimed.

The DAO marketing material from May 2016

Source: DaoHub

Overview

In the early summer of 2016, one project generated a substantial amount of excitement and buzz in the crypto space, “The DAO”. DAO stands for Decentralized Autonomous Organization, and to the confusion of many, “The DAO” consumed that entire moniker for itself. The DAO was to be an autonomous investment fund, investing in projects determined by the token holders.  The fund was to be governed by a “code is law” philosophy, as opposed to the centralized top down control mechanisms in traditional investment funds, where key individuals matter.

Many believed this novel approach would lead to superior investment returns.  Although it is a unique and potentially interesting approach, in our view, expecting strong investment returns at this point may be somewhat naive.

The fund raised Ethereum tokens worth approximately US$150 million at the time, around 14% of all the ether in existence, with investors presumably expecting spectacular returns.  The downside risk was expected to be minimal or zero, since one was supposed to be able to withdraw one’s Ethereum from The DAO, whenever one wished. In reality, doing so was a complex and error-prone process.

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As the interest for blockchain projects and cryptocurrencies is exponentially growing, OmiseGO appears to be one of the strongest and most exciting projects out there. Still, as it involves fairly complex notions, it is hard for the beginner looking for an introduction to find a clear and complete guide: OmiseGO’s website provides all necessary documents, and especially the “white paper”, an in-depth explanation of the whole system, but although being an extremely well thought and precise document, it would be a lie to pretend it’s not a hard read at first sight.

There are also some good quality reviews already, but while they can be very useful, they usually focus on one specific point of the matter, such as commercial partnerships, without taking the time to introduce the whole of the project to someone that would be completely new to it.

So I decided to write the comprehensive guide that would take everything from the start and be clear for anyone to read, while at the same time exposing everything in the most precise and accurate way, in order to give this very ambitious project the wide audience and understanding it deserves.

As I’m taking things back from the basics, if you feel like you are already clear about some points, feel free to skip them and directly move to the points that interest you. I have tried to give a clear architecture to this article, clear titles and an introductive summary, so that you can browse easily through this guide if you don’t want to read it from the beginning to the end.

Please note that whatever you read in this guide, it is made only for explanational purpose, and is not in any case an investment advice: I am not entitled to this, I don’t wish to, and the choice one makes with his or her own money is his or her own choice. Investing in any project and especially in the crypto world is always a high risk operation, and I have no recommendation to make about it. Even the part titled “Why invest in OmiseGO” is to be considered a mere exposition of what can be the reasons to invest in the project if one chooses to, but not an advice pretending you should, or should not.

I’m only trying to clearly explain what OmiseGO is, what it is building, and what it can be in the future, while answering in a same article to many questions I’ve seen and answered separately on dedicated forums.

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Zug is a region of Switzerland that has come to be known as Crypto Valley, due to the jurisdiction’s pro-fintech enterprises, and its accommodating laws and regulations.

The canton of Zug is a region of Switzerland that’s become known as “Crypto Valley” –  a moniker allegedly coined (pun intended) by Ethereum co-founder Mihai Alisie. The Ethereum Foundation is headquartered in Zug, along with many other fintech enterprises. There are plenty of reasons that so many startups and tech companies are drawn to the city, and they’re quite deliberate.

Zug is continually working to live up to its name as the Crypto Valley. It’s not just startup companies looking to make things easier on themselves, but the entire Zug ecosystem promotes innovation and provides opportunities that other cities and countries lack.

Crypto Valley Zug As Silicon Valley 2.0

Zug has long attracted companies to its lakeside shores to enjoy one of the lowest tax rates in Switzerland. Zug’s allure is more than just the government’s minimal invasion of corporate coffers. There is a complex web of interconnected entities, all advocating innovation.

Zug’s startup enterprises, fintech incubation firms, and governmental authorities all seem to have open lines of communication; regularly collaborating with the mutual goal of fostering the economic expansion of Zug by supporting the growth of startup companies.

Zug Accepts Bitcoin Payments

In July 2016, the city of Zug (the capitol of the canton of Zug) started accepting bitcoin as payment for city fees. The city council allows bitcoin payments up to 200 Swiss francs (~$200 USD). As bitcoin is still relatively new, Zug immediately converts all bitcoin payments into Swiss fiat currency to minimize risk. The project was reevaluated at the end of last year, and the city council decided to extend its program of accepting bitcoin. Dolfi Müller, Zug’s mayor, released a statement, which, as translated by Google Translate, reads:

„It was an important experience for us to install and test the technology for bitcoin payments. We were able to [send a message to] Fin-Tech [companies] in Zug and express that they are welcome here.”

In the same release, the city council goes on to announce its plans to continue promoting digitization (regarding integrating emerging technologies into existing systems) and mentioned its interest in an “e-government.”

Regulatory Oversight

One of the most essential supporters of fintech startups in Zug is the Swiss Financial Market Supervisory Authority (FINMA). As a regulatory authority, FINMA could easily promote or obstruct the growth of businesses working with emerging financial technology, like blockchain-based distributed ledgers.

Switzerland’s Federal Council, the country’s head executive office, called for an easing of regulatory frameworks regarding financial technology at a November 2, 2016 meeting, in order to reduce barriers to market entry for fintech companies.

As part of the Swiss government’s pro-innovation push, FINMA defined its strategic goals for 2017-2020,  setting its priorities on proper business conduct, and approaching supervision and regulation in a way that should encourage emerging technologies. In laying out its goals, FINMA stated:

“The long-term success of Switzerland’s financial centre depends largely on its ability to innovate. FINMA is therefore adopting a more pro-innovation approach to regulation and supervision and will push for the removal of unnecessary regulatory obstacles for innovative business models.”

Funding Opportunities

Outside of government authorities, there are several fintech incubation firms helping to nurture startups, such as the non-profit organization Swiss Finance Startups (SFS). Founded in May 2014, SFS seeks to “create synergies, join forces and to drive innovation, inspiration and change in the world’s financial epicenter.” SFS is quite prolific, listing 192 member startups on its website. It aims to remain at the forefront of digitizing the finance industry, as suggested by its mission statement, which reads:

 “The future of Switzerland is to a large [extent] relying on a successful financial sector. Fintech is the future of the financial sector: Fintech is the future of Switzerland! And startups are the backbone of digitization and fintech innovation. Therefore, it is our mission to define a startup friendly environment in Switzerland that is based on collaboration and a strong network and gives young entrepreneurs the support and the freedom to be creative, courageous and [successful.]”

A similar non-profit entity, the Swiss Finance + Technology Association (Swiss FinteCH), works with fintech startups, providing support through its mentoring program. Swiss FinteCH regularly coordinates meetups and events, and organizes international outreach to fellow fintech hubs. Most interestingly, it has a regulatory advisory board, which provides strategic advice and suggestions to governmental authorities and other relevant stakeholders. The roles and responsibilities of the advisory board members are, in part, as follows:

•  Main source of contact for regulators and policy makers

•  Provide expertise and knowledge on urgent regulatory related matters

•  Provide unbiased insights (we represent the ecosystem) and ideas from a third point-of-view encourage and support the exploration of new ideas (sandbox)

•  Provide regular formal output to counsel governmental bodies

It even offers a map of “current [organizations], startups, corporations, associations and bodies involved in the Swiss FinTech ecosystem,” available on its website.

The Future Of Zug And Switzerland

Switzerland has long been a global financial center. It wouldn’t be surprising if it became the central hub of virtual currencies, as it is working to become the breeding ground for fintech innovation.

As long as regulations continue to be pro-innovation and as long as startups continue to work together, Zug should remain a hotbed for disruptive technologies. For blockchain technology to see widespread adoption, it will have to show the world all the benefits it brings. The best way to do that is to actually integrate blockchain-based solutions into existing industries and economies. Zug stands to be that proving ground.

Will virtual currency become “money 2.0?” In Zug, the answer may not yet be a resounding “yes,” but it’s a safe bet that Zug might answer, “We’re working on it.”

Quelle: Zug: Switzerland’s Crypto Valley

The world’s richest man is arguing for taxing and slowing automation.

Robots are taking human jobs. But Bill Gates believes that governments should tax companies’ use of them, as a way to at least temporarily slow the spread of automation and to fund other types of employment.

It’s a striking position from the world’s richest man and a self-described techno-optimist who co-founded Microsoft, one of the leading players in artificial-intelligence technology.

In a recent interview with Quartz, Gates said that a robot tax could finance jobs taking care of elderly people or working with kids in schools, for which needs are unmet and to which humans are particularly well suited. He argues that governments must oversee such programs rather than relying on businesses, in order to redirect the jobs to help people with lower incomes. The idea is not totally theoretical: EU lawmakers considered a proposal to tax robot owners to pay for training for workers who lose their jobs, though on Feb. 16 the legislators ultimately rejected it.

“You ought to be willing to raise the tax level and even slow down the speed” of automation, Gates argues. That’s because the technology and business cases for replacing humans in a wide range of jobs are arriving simultaneously, and it’s important to be able to manage that displacement. “You cross the threshold of job replacement of certain activities all sort of at once,” Gates says, citing warehouse work and driving as some of the job categories that in the next 20 years will have robots doing them.

You can watch Gates’ remarks in the video above. Below is a transcript, lightly edited for style and clarity.

Quartz: What do you think of a robot tax? This is the idea that in order to generate funds for training of workers, in areas such as manufacturing, who are displaced by automation, one concrete thing that governments could do is tax the installation of a robot in a factory, for example.

Bill Gates: Certainly there will be taxes that relate to automation. Right now, the human worker who does, say, $50,000 worth of work in a factory, that income is taxed and you get income tax, social security tax, all those things. If a robot comes in to do the same thing, you’d think that we’d tax the robot at a similar level.

And what the world wants is to take this opportunity to make all the goods and services we have today, and free up labor, let us do a better job of reaching out to the elderly, having smaller class sizes, helping kids with special needs. You know, all of those are things where human empathy and understanding are still very, very unique. And we still deal with an immense shortage of people to help out there.

So if you can take the labor that used to do the thing automation replaces, and financially and training-wise and fulfillment-wise have that person go off and do these other things, then you’re net ahead. But you can’t just give up that income tax, because that’s part of how you’ve been funding that level of human workers.

And so you could introduce a tax on robots…

There are many ways to take that extra productivity and generate more taxes. Exactly how you’d do it, measure it, you know, it’s interesting for people to start talking about now. Some of it can come on the profits that are generated by the labor-saving efficiency there. Some of it can come directly in some type of robot tax. I don’t think the robot companies are going to be outraged that there might be a tax. It’s OK.

Could you figure out a way to do it that didn’t dis-incentivize innovation?

Well, at a time when people are saying that the arrival of that robot is a net loss because of displacement, you ought to be willing to raise the tax level and even slow down the speed of that adoption somewhat to figure out, “OK, what about the communities where this has a particularly big impact? Which transition programs have worked and what type of funding do those require?”

You cross the threshold of job-replacement of certain activities all sort of at once. So, you know, warehouse work, driving, room cleanup, there’s quite a few things that are meaningful job categories that, certainly in the next 20 years, being thoughtful about that extra supply is a net benefit. It’s important to have the policies to go with that.

People should be figuring it out. It is really bad if people overall have more fear about what innovation is going to do than they have enthusiasm. That means they won’t shape it for the positive things it can do. And, you know, taxation is certainly a better way to handle it than just banning some elements of it. But [innovation] appears in many forms, like self-order at a restaurant—what do you call that? There’s a Silicon Valley machine that can make hamburgers without human hands—seriously! No human hands touch the thing. [Laughs]

And you’re more on the side that government should play an active role rather than rely on businesses to figure this out?

Well, business can’t. If you want to do [something about] inequity, a lot of the excess labor is going to need to go help the people who have lower incomes. And so it means that you can amp up social services for old people and handicapped people and you can take the education sector and put more labor in there. Yes, some of it will go to, “Hey, we’ll be richer and people will buy more things.” But the inequity-solving part, absolutely government’s got a big role to play there. The nice thing about taxation though, is that it really separates the issue: “OK, so that gives you the resources, now how do you want to deploy it?”

Quelle: Bill Gates: the robot that takes your job should pay taxes — Quartz