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Offline MrJeans

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Producing financial metrics for a virtual company, such as Bitcoin
« on: September 20, 2014, 07:40:57 PM »

I have written a white paper on producing financial metrics for Bitcoin.
I drew on many of the ideas from Daniel and Stan Larimer's ideas on thinking about virtual currencies as being DACs. I then tried to use this concept to produce common financial metrics which analysts would normally want to work with.

It shows many of the unsustainable issues Bitcoin has. If the same metrics are used to analyse the DACs the Bitshares community produces we will see much healthier financial state of these DACs compared to Bitcoin.

I'm sure the community will be able to think about this in a more advanced manner than what I have put together, however I hope this paper is interested and helpful.

http://bitpaper.info/paper/5664248772427776

Offline triox

Re: Producing financial metrics for a virtual company, such as Bitcoin
« Reply #1 on: September 22, 2014, 01:24:42 PM »
Great paper, this is a powerful message. If I may suggest a tweak: avoid mentioning Bitshares this early in the paper. FIRST analyze the economic model of Bitcoin and only then, when the reader is disarmed in his bitcoin fanboism, do the same for Bitshares. The contrast can be very powerfull. Oh, and include a few more charts and equasions. The reader ususally skips them, but they convey the mathematical clout.

Offline maqifrnswa

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Re: Producing financial metrics for a virtual company, such as Bitcoin
« Reply #2 on: September 22, 2014, 02:03:48 PM »
I have written a white paper on producing financial metrics for Bitcoin.
I drew on many of the ideas from Daniel and Stan Larimer's ideas on thinking about virtual currencies as being DACs. I then tried to use this concept to produce common financial metrics which analysts would normally want to work with.

It shows many of the unsustainable issues Bitcoin has. If the same metrics are used to analyse the DACs the Bitshares community produces we will see much healthier financial state of these DACs compared to Bitcoin.

I'm sure the community will be able to think about this in a more advanced manner than what I have put together, however I hope this paper is interested and helpful.

http://bitpaper.info/paper/5664248772427776

this is pretty good - the ideas are something I think could be interesting to share. Are you an academic by any chance? I think thinking like this might earn a spot in an economics journal/conference. I've been pushing this line of thinking for over a year, even before bitshares exist! Cryptocurrencies have value, but the P/E like you show is outrageous. You are paying today for the price it will be worth tomorrow...

These are very important ideas - and the response to "what backs bitcoin?" The answer to that question is the same as the answer to, "What backs Berkshire Hathaway?" It's the expected future returns on investment...
« Last Edit: September 22, 2014, 02:08:39 PM by maqifrnswa »
maintains an Ubuntu PPA: https://launchpad.net/~showard314/+archive/ubuntu/bitshares [15% delegate] wallet_account_set_approval maqifrnswa true [50% delegate] wallet_account_set_approval delegate1.maqifrnswa true


Offline MrJeans

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Re: Producing financial metrics for a virtual company, such as Bitcoin
« Reply #4 on: September 22, 2014, 03:13:06 PM »
Great paper, this is a powerful message. If I may suggest a tweak: avoid mentioning Bitshares this early in the paper. FIRST analyze the economic model of Bitcoin and only then, when the reader is disarmed in his bitcoin fanboism, do the same for Bitshares. The contrast can be very powerfull. Oh, and include a few more charts and equasions. The reader ususally skips them, but they convey the mathematical clout.
Haha yes you are very right. I was wondering whether or not I should mention Bitshares. It was just too tempting not to. But I moved it to much later in the text and as a footnote.
Yes I can add some charts.

I should have uploaded the article as a google doc so that people can edit at will but the website only allowed the upload if there was an attachment. Will see what other changes people want and then upload again. Thanks for your feedback!

Offline MrJeans

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Re: Producing financial metrics for a virtual company, such as Bitcoin
« Reply #5 on: September 22, 2014, 04:57:33 PM »
I have written a white paper on producing financial metrics for Bitcoin.
I drew on many of the ideas from Daniel and Stan Larimer's ideas on thinking about virtual currencies as being DACs. I then tried to use this concept to produce common financial metrics which analysts would normally want to work with.

It shows many of the unsustainable issues Bitcoin has. If the same metrics are used to analyse the DACs the Bitshares community produces we will see much healthier financial state of these DACs compared to Bitcoin.

I'm sure the community will be able to think about this in a more advanced manner than what I have put together, however I hope this paper is interested and helpful.

http://bitpaper.info/paper/5664248772427776

this is pretty good - the ideas are something I think could be interesting to share. Are you an academic by any chance? I think thinking like this might earn a spot in an economics journal/conference. I've been pushing this line of thinking for over a year, even before bitshares exist! Cryptocurrencies have value, but the P/E like you show is outrageous. You are paying today for the price it will be worth tomorrow...

These are very important ideas - and the response to "what backs bitcoin?" The answer to that question is the same as the answer to, "What backs Berkshire Hathaway?" It's the expected future returns on investment...
Thanks. I am a bit of an academic but in Virology haha. I am sure in this community many of us understand how the fundamentals of bitcoins 'business model' has some issues. pm me if you keen to publish a paper together then :)

 

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