[ANN] CoinFairValue.com - New Cryptocurrency Fair Value Model Launches

[pablomp]

I am happy to announce the launching of CoinFairValue.com!!

Years ago, thanks to the birth of cryptocurrencies, I came up with a brand new economic model. This model, built by rational thinking on top of praxeological axioms (like any other self respecting economic model), allowed for the determination of a true fair value of currencies for the first time. I published it a year ago here: https://steemit.com/bitcoin/@pablomp/cryptocurrencies-what-is-the-fair-value-of-a-currency

Almost one year has passed since and I am now glad to present to you CoinFairValue.com.



What can you do at CoinFairValue.com?

• You can check the current state of fair value of all the currencies in real time Coins will come ordered by fair market cap (yet another new concept). The main page table will allow you to:
  
  • Check how many times the market is pricing a currency over its fair value (what I call the Price to Fair Value Ratio, a related concept to P/E ratio in stocks).
  • Check how much the fair value of a currency is increasing / decreasing over time. Since fair value is a direct metric of the usage of a currency, that means you will be able to see if a currency is growing in usage or dying out.
• You can access each one of the coins and see more detail related to its fair value, as well as nice charts. The charts will allow you to download the associated data in different formats, such as CSV or XLS.
• You can learn about the fair value concept and the theoretical background on which it is based.

Short-term roadmap:

• Adding more coins.
• Adding more data.
• Improving user experience.
• Calculating and displaying aggregated data for the whole market.
• Adding more charts.
• Improving the learning section with more and better explanations.
• API.

Long-term roadmap:

• Running full-nodes server side.
• Adding per-user experience with personalised fundamental analysis tools.
• Adding request features forms.

I wish you a happy surfing at CoinFairValue.com.

Cheers!

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[pablomp]

Lisk and ICON have just been included!

Enjoy!

coinfairvalue.com

[d5000]

Thanks pablomp, good work!

Now I don't know if it's a bug or not (I suppose so) but today Ethereum and Dogecoin have negative "fair values" and "market caps". I think this can't be possible as in a quantitative-theory-of-money approach like yours - this would mean that the transaction throughput is negative? Or has it to do with the relatively high supply inflation and the lack of a "cap" (like Bitcoin's 21 million) of the supply these two coins?

I also don't understand why the EUR has a higher fair value than the USD, showing less transactions.

[pablomp]

Thanks pablomp, good work!

Now I don't know if it's a bug or not (I suppose so) but today Ethereum and Dogecoin have negative "fair values" and "market caps". I think this can't be possible as in a quantitative-theory-of-money approach like yours - this would mean that the transaction throughput is negative? Or has it to do with the relatively high supply inflation and the lack of a "cap" (like Bitcoin's 21 million) of the supply these two coins?

I also don't understand why the EUR has a higher fair value than the USD, showing less transactions.

Thank you  @d5000!! I am glad you like it.

Indeed it was a bug. Thank you very much for reporting it. It is now solved. Apologies for the inconvenience!

[pablomp]

I've just added a roadmap to the initial post 

[pablomp]

Aeternity coin added to coinfairvalue.com!!

[pablomp]

Announcing transactions charts 

[pablomp]

There have been significant improvements on the data used to calculate the fair value. Now the velocity of the money and the average value of the basket is also taking from the blockchains. If you know the website already, you will probably notice that they fair values have changed significantly. This is because of having reduced the uncertainty to a great extent. If you have any questions regarding how the fair value is calculated and why is it calculated that way, please, ask them to me here.

Thank you very much and enjoy coinfairvalue.com.

[pablomp]

Added many more charts to help the investors understand the source of the value of a currency.

[pablomp]

Last improvements and features:

• Transactions used for the fair value are applied a 1W EMA in order to filter their volatility.
• More data per coin.

[pablomp]

BlackCoin added to coinfairvalue.com!

[d5000]

There are still things I don't understand. Now, according to your website, several coins (including Bitcoin) have a fair value that is significantly above the current price. But the fair value seems totally unrelated to the transaction rate ...

An example: Stellar (with 5,688 tx/24h) has a fair market cap almost as high as Bitcoin's (201,660 tx/24h).

I also continue to not understand why the EUR is valued higher than the USD in your formula, if it has a smaller transaction rate. As your formula is QTM-based, should't it be the other way around? And shouldn't Stellar then have a much smaller fair market cap than Bitcoin?

Are you sure there isn't a bug still in your implementation of the formula? I remember that in your first presentation, Bitcoin had a similar or even slightly higher transaction rate than now, but you claimed it had a fair value of less than $500. In your website, however, the fair value magically increased to $13,000+ ...

[pablomp]

Hello @d5000,

There are more variables in the fair value equation than the transactions rate. Coin A having more transactions per day than coin B does not imply fair value of coin A has to be greater than fair value of coin B. Things like the Total Discounted Supply, the velocity of money ratio and the basket shift are fundamental variables in the determination of the fair value of a currency.

With regarding to Stellar Lumens, there is indeed something strange with the data. There seems to be almost zero value in all of its payments transactions. I will temporary remove it from CoinFairValue until I can clarify what is going on. Thank you for notifying.

EUR shows as having a higher fair value than USD because their basket shift is 2. It means that a EUR trade, on average, is in exchange for a good or service whose value is double the value of the average one in USD. Nonetheless, keep in mind that fiat data is very sparse, so there is more uncertainty in the calculation of their fair values. I notify it within the website in different places.

Answering your last question, the reason is not that there is any bug in the formula. The reason is that before I was calculating the fair value imposing the following future assumptions:

• If two currencies are competing with each other, they will be competing for the same basket shift and, therefore, it makes sense to set the fair basket shift to 1.
• If two currencies are of the same nature (no staking), humans will have the same willingness to trade them in the future, when they are settled currencies. Thus, it makes sense to set their velocity ratios to 1. For the case of staking cryptocurrencies, I was assuming the collateral had a much lower probability of being moves and that allowed me to set an upper bound to the velocity ratio.

Now I don't make those assumptions anymore for several reasons:

• They are not very neutral, because they assume equality of market niches.
• They are not very reliable, because there might be more reasons than just the staking incentive for individuals having a different willingness to trade a their savings if they are denominated in one currency instead of another.
• They do not allow for comparing, for instance, Ethereum with Bitcoin.

And what I do now is I measure average of the basket shift and the velocity ratio of a pair of currencies and I this average as an input in the formula. This means I learn how a currency is being used instead of assuming how will it be used.

Anyways, I will add a feature (the fair value calculator) which will allow the investor to set all kinds of hypotheses on the future and use the fair value formula with these hypotheses. Anyone will be able the get their one fair values based on their one assumptions.

My apologies for the late response. I had a flue this week and I didn't use the computer at all.

I hope this clarifies all your concerns!!

Regards,

Pablo MP

[pablomp]

I have reviewed Stellar Lumens data. There is nothing wrong with it. Its fair value is very high because its velocity is very small. And its velocity is very small because a large part of its supply is locked. Keep in mind that there is always the high risk that part of its supply ceases to be locked.

Anyways, always analyse the long term trends on velocity, basket shift, and transactions. Fair values displayed at coinfairvalue.com are just a starting point for an investor, not a final answer. If you are a long term investor, do research.

[pablomp]

Golem added to coinfairvalue.com.

[d5000]

Thank you @pablomp for your detailed response!

I see, I will have to review your formula again. Last year when I first saw your article, I got the impression that the relation between transaction speed and "fair value" was pretty direct with some additional assumptions about the future supply, but I see I was wrong and I oversimplified your concept (probably the direct relation then was just a coincidence). The main reason why I was surprised, however, was the discrepancy between the $250-500 Bitcoin in your 2017 calculation and the $13K Bitcoin as of now (now it's even at 14,7 K!).

Regards, d5000

[konstant111]

Hi, friend you made a big deal, I like it, will the data match the coinmarketcap, what do you mean called fair value, the prices are different from the reality

[teguhpurwadi]

For me, right now, CoinFairValue.com is still just another place to get the information about coin value. I need to know more and look at further developments of this coin value source. I hope this can be one of my favorite places to check out my coin value. I will support this to be a good coin value source. 

[dkbit98]

Most of the coins have higher fair value then its current value.
But not Monero for example: Monero   $23.3   $124.24

Maybe your math needs some tweaking and updating.

How can new coins be added ?

[pablomp]

Thank you @pablomp for your detailed response!

I see, I will have to review your formula again. Last year when I first saw your article, I got the impression that the relation between transaction speed and "fair value" was pretty direct with some additional assumptions about the future supply, but I see I was wrong and I oversimplified your concept (probably the direct relation then was just a coincidence). The main reason why I was surprised, however, was the discrepancy between the $250-500 Bitcoin in your 2017 calculation and the $13K Bitcoin as of now (now it's even at 14,7 K!).

Regards, d5000

You are welcome @d5000! Transactions are still the main driver of the fair value. Indeed, what led me to think about and produce the theory of the fair value was the impressive correlation between the transactions rate and the price. The other ratios on the formula vary very slowly. That is why I am using long moving averages for them in coinfairvalue.com.

The fair value with respect to the USD can be, indeed, seen behind several optics. If you see bitcoin as something that will replace the USD, you can impose equal baskets and equal velocities, like I was doing before. Then you will have a much lower fair value. On the other hand, if you are more neutral and accept the specific usage bitcoin has been having, then you will have a fair value closer to the one shown at coinfairvalue.com.

Best regards!

pablomp