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RE: Charles Hoskinson Steemit AMA
I have a basic question regarding bitcoin. If market cap of bitcoin is only 10 billion, and we are seeing many fin tech and block chain start up projects started. Most of these start up projects are originally funded with bit coin and their valuations are priced in bit coin. Wouldn't you expect the market cap of bit coin to valued much higher based on what can be seen as a tech boom in blockchain companies? My questions is then, what is a fair valuation for bit coin price based on simply the number of start up projects that are in place so far in 2016?
First, I'm not sure if your question is quite accurate. Many of the startups in the blockchain space have been funded from VC capital that came from fiat. Second, they occupy a bet on the technology and its overall profitability, not necessarily the particular implementation that is Bitcoin. For example, Ripple Labs isn't connected to Bitcoin and could survive without it.
In terms of a fair price, I think you need to examine the total population, how engaged they are, the merchant adoption, custom infrastructure such as hardware wallets and atms, the rate of evolution of the underlying protocol and how resilient the system is to negative events. With these factors in minds, Bitcoin looks fairly attractive and I suspect will continue to grow at a nice pace. Whether it obtains a value on scale with gold or other value store commodities is difficult to say, but that's what makes it fun.
Not my AMA, but I'd like to add that valuation depends on whether you consider Bitcoin now or after the release of the lightning network and other important sidechains like Liquid and Rootstock. This is important because Bitcoin now and then are totally different things. Today's Bitcoin has pretty much hit its maximum capacity and can't scale to become a mainstream payment network. All it can do is improve in quality and security, which is its strong selling point right now. Today's Bitcoin is fairly valued at 10B USD IMO. Tomorrow's Bitcoin is a totally different thing: with Lightining it becomes a potential competitor of global realtime payment network like Visa and Amex, with Liquid it becomes a settlement backbone like SWIFT, and with Rootstock it becomes a direct competitor of Ethereum. It also ceases having scalability issues since on-chain traffic becomes almost exclusively dedicated to large transactions, lightning settlements and side-chains traffic. Tomorrow's Bitcoin could easily command a trillion dollars market cap.