^"Worst reasonable case" is still LC being entirely fraudulent

I think the probability of that is low. All I said is that you have to look at the possibility. You don't have to assume it's 100% certain.

The way to do it is, estimate the probability of various possible outcomes and how much money you'll make in those scenarios.

So let's say there are three possible outcomes:

1) Labcoin is a total fraud. Let's say there's a 1% chance of this

2) The network is

**1PH **on November 1st and Labcoin has 0.05PH, or

**5%** of the network.

2) The network is

**5PH** on November 1st and Labcoin has 0.50PH, or

**1%** of the network.

And there is an equal likelihood of both 1 and 2, 49.5%.

Then what you do is calculate the expected value in each scenario and multiply it by the probability. In possibility 1, the value is 0%. In the other scenarios you assign a value to a network %. If we're going by the current ASICMiner valuation of 2.1 for 5% of the network (basing it off of with

blockchain's estimate over the past 4 days) and 400k vs 10 million shares you get:

400k shares/10m shares * 2.1/5 = 0.0168 as an expected share price @ 1% of the network.

400k shares/10m shares * 2.1 = 0.084 as an expected share price @ 5% of the network.

Now, you multiply both those values by 0.49 and add to get

** 0.049BTC **as the 'expected' share price with the given the above probability distribution.

But, obviously there are more possibilities then that. To do a real analysis you'd need to take the probability distribution function of the network hashrate, the probability distribution of the likely hashrate and then take the double integral in order to integrate over the the 'surface' of that 2d vector space to find the expected value of Labcoin on November 1st.

But that's assuming that "the market" will consider Labcoin to be capable of keeping (at least) it's share of the market as good as they currently think ASICminer will. We know the network will continue to grow and now we know that Labcoin plans on having about 0.2-0.3PH online by the end of the year. But guessing the hashrate in January is even more difficult then guessing the hashrate in November.

So, it is really difficult to guess the price. And of course Labcoin won't have the 'history' of ASICMiner for another year or so in terms of being able to keep up with network growth, so it likely won't be priced as high (But, the price of ASICMiner is dropping as well)