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Title: Producing financial metrics for a virtual company, such as Bitcoin Post by: obzbluejeans on September 21, 2014, 11:20:51 AM 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 Title: Re: Producing financial metrics for a virtual company, such as Bitcoin Post by: Nagle on September 21, 2014, 05:52:40 PM You need to read more financial history. Read up on "blind pools", "pink sheet stocks", and "shell companies". There's a long history of tradeable financial products with no assets or revenue behind them.
Title: Re: Producing financial metrics for a virtual company, such as Bitcoin Post by: odolvlobo on September 21, 2014, 06:38:45 PM I think your idea of treating bitcoin as a company might have been an interesting exercise, but it is not very useful because it doesn't provide any new insight. In fact, it has lead you to a false conclusion.
Quote ... Bitcoin employs a highly unprofitable and a non-sustainable business model where the company pays more in fees than it brings in as income. It is however possible to produce a virtual company which is designed to be profitable for shareholders. Such a company would reduce its share issuance ... Bitcoin is sustainable. Bitcoin is reducing its share issuance. Income will equal expenses and Bitcoin will no longer be unprofitable when the block reward is reduced to 0. In my opinion, the fact that income always exactly equals expenses (at some point) and that there are no assets or liabilities make treating Bitcoin as a company moot. Title: Re: Producing financial metrics for a virtual company, such as Bitcoin Post by: obzbluejeans on September 22, 2014, 05:34:01 PM Hey there, thanks for commenting and thanks for taking the time to read the paper ;D
The consensus algorithm used to deploy Bitcoin (where we use mining) makes perfect sense for the first virtual currency. However there are now more advanced methods which can be used to achieve consensus without diluting the value of each individual coin (for example DPOS). see https://www.youtube.com/watch?v=uo979iaLvEs&list=UUchU0j9bXOa_E1xbxB5MqbQ I do comment on the fact that these metrics may not be hugely helpful for Bitcoin but would become helpful once we start looking at various virtual currencies or DACs. For example we can use these metrics to compare Namecoin and .p2p (http://bitshares.org/industries/domains/) to help evaluate which is a better investment. Without these metrics how would one quantitatively decide which of the two is the better investment. |