blightcoin: Value of technology vs value of ledger

[sfultong]

I'm going to run an experiment in the value of cryptocurrency, by creating an altcoin based off litecoin that starts with a snapshot of the bitcoin ledger.

I want to see how much the current market cap value of litecoin is determined by its technology, vs how much from its user base.

I believe that ultimately all altcoins should start from a snapshot of the ledger of the cryptocurrency with the largest market cap at the time.

[cecivup]

How many litoshis will an address need to hold to be included in the snapshot?  I assume you are going to exclude addresses containing small amounts of dust.

[sfultong]

I haven't quite decided. I did notice that when taking a snapshot where I filtered out transactions under 10000, the size of the snapshot file was about half that of an unfiltered snapshot.

[gjhiggins]

I'm going to run an experiment in the value of cryptocurrency, by creating an altcoin based off litecoin that starts with a snapshot of the bitcoin ledger.

I assume that you are aware of CLAMS (BTC/LTC/DOGE snapshot) but others may not be.

I want to see how much the current market cap value of litecoin is determined by its technology, vs how much from its user base.

vs how much from its (completely different) distribution model. Modelling weaknesses stemming from necessary assumptions will prohibit any reliable quantitative analysis.

I believe that ultimately all altcoins should start from a snapshot of the ledger of the cryptocurrency with the largest market cap at the time.

Any support for that? - like addressing the fact that coins “coins issued/available” != stocks/shares and that in the context of cryptocurrency the concept of “market capitalisation” is actually just a seductively simple metaphor that brings no reliable predictive power?

Cheers

Graham

[sfultong]

Well, market capitalization isn't the best measure, it's true.

For the best chance of success for a cryptocurrency, we want to have the greatest emotional investment in its userbase. The amount of wealth each user has invested in that cryptocurrency could be used as a rough measure of emotional investment, so the sum of wealth invested (market cap) is the measure I use to determine what ledger has the best chance for users of cryptocurrency in general of accepting.

This approach also has the benefit of giving us a clear answer to the question "how do we protect wealth when a cryptocurrency becomes obsolete?" I am less inclined to invest in cryptocurrency in general, if I think I need to keep up with all the latest technologies and divest of the old ones in order to sink wealth into new ones. This (what seems to be the current trend) is very flawed from an economic perspective.

[gjhiggins]

For the best chance of success for a cryptocurrency, we want to have the greatest emotional investment in its userbase. The amount of wealth each user has invested in that cryptocurrency could be used as a rough measure of emotional investment, so the sum of wealth invested (market cap) is the measure I use to determine what ledger has the best chance for users of cryptocurrency in general of accepting.

Just too vague to be useful empirically. Using tokens as a proxy for emotional investment may make sense to an economist but from a psychologist's perspective it is a profoundly flawed approach. At the least, any notion of “amount of wealth” is unavoidably relative to local conditions which makes the whole thing opaque and ineffective either as a source of potential insight or as a measuring rod.

There just isn't enough intellectual/theoretical support to allow an empirically testable hypothesis to be proposed.

Cheers

Graham