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Ethereum Valuation

8 Answers - Why Does Ether (ethereum) Have Value? - Quora

8 Answers - Why Does Ether (ethereum) Have Value? - Quora

What could be a good reason to start investing before 2018? ETFmatic offers free investing accounts until April 2018 if you fund your account before December 31! Originally Answered: What factors will determine the value of ether and ethereum? Like Bitcoin, the fiat value of ETH is determined by those who buy and sell it alone. The currency is used to pay for smart contracts within the Ethereum network, so one might say that Ether tokens are backed by the value that these smart contracts provide. So far (June 2016), nearly all value is speculative as smart contracts have not yet found a killer app. WePower - blockchain based green energy trading network. WePower token is backed by green energy. Token grows with platform expansion. Backed by biggest funds. Originally Answered: How do we value something like Ethereum? How do we value things in general? Intersubjective value theory holds that you probably factor in predictions. Predictions on what your future will look like with or without the trade, predictions what others will think your future will look like with or without the trade, predictions on what the future of others might look like if they made the trade or didnt. Heuristically, you look at what everybody else is giving up (price) compared to your opportunity costs (costs). Value comes from evaluations between things, in addition to evaluation of others between these things, not the thing itself. Continue reading >>

Valuation Paradigms: How Do Ethereum, Bitcoin And Litecoin Compare?

Valuation Paradigms: How Do Ethereum, Bitcoin And Litecoin Compare?

Which is better, to invest in bitcoin or ethereum and litecoins? I wanted to expand on this answer and give you a few paradigms when thinking about how to value popular cryptocurrencies. Each paradigm comes with a different perspective and, ultimately, a different recommended investing strategy. Before I get into that, Ill briefly discuss the history of the three cryptocurrencies in this post. Background: Recent History of Blockchains Skip to the next section if youre already familiar with these blockchains. Bitcoin was the original cryptocurrency blockchain, creatingthe entire industry we are talking about. It was released in 2008 and has the most marketing power behind it. Despite the ecosystem growing widely, Bitcoin is still the most recognized and widely used brand in the industry. Litecoin was an early altcoin created to improve on Bitcoin. These improvements were rather minor, and didnt deviate too much from what Bitcoin already offered. For the longest time, Litecoin was considered the silver to Bitcoins gold. Recently, Litecoin has made significant headway by implemented a protocol known as Segwit , which Bitcoin has struggled to implement in their chain. Ethereum was a completely new blockchain architecture, different from Bitcoin and other competitors. They included the Ethereum Virtual Machine in their nodes, which processes complex smart contracts and allows for newapplications. Ethereum has opened itself up to become the primary platform to delivering decentralized services of all kinds. There is no rightanswer on how to value each blockchain. Instead Ill give you a couple of lenses you can view this industry through and the value implications they have. One way you could understand the value of these currencies is by tying their value to their future use Continue reading >>

I Created A Valuation Model For Ethereum (eth) : Cryptocurrency

I Created A Valuation Model For Ethereum (eth) : Cryptocurrency

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Ethereum And The Rise Of The Price Of An Ether

Ethereum And The Rise Of The Price Of An Ether

Ethereum And The Rise Of The Price Of An Ether {{article.article.images.featured.caption}} Opinions expressed by Forbes Contributors are their own. The author is a Forbes contributor. The opinions expressed are those of the writer. This story appears in the {{article.article.magazine.pretty_date}} issue of {{article.article.magazine.pubName}}. Subscribe The Ethereum virtual currency logo is displayed on an automated teller machine (ATM) at the Coin Trader bitcoin retail store in Tokyo, Japan, on Wednesday, Aug. 30, 2017. The value of Ethereums currrency is increasing alongside Bitcoin and Litecoin, and the price of one Ether is currently at a high of $625.25 USD, according to CoinMarketCap, despite the CryptoKitties drama. 2018 will welcome a range of regulatory requirements and financial institutions are launching new products on the blockchain in order to simplify compliance, and this is where the Ethereum blockchain is becoming increasingly popular. A project named the Massive Autonomous Distributed Reconciliation program (Madrec) was announced this week and will be led by UBS with involvement from Barclays, Credit Suisse, KBC, SIX and Thomson Reuters. For a while now, financial news has been dispersed with updates of how banks are experimenting with cryptocurrencies and this announcement is one of the most recent, after Bitcoin futures began trading. Unlike Bitcoin, however, Ethereum has always been spoken about in a more positive way and has become the second largest digital currency in two years. After being launched in 2015, the value of Ethereums currency, otherwise known as Ether, has increased by more than 6,800% since the start of the year, according to The Telegraph. With Ether being the third most valuable digital currency and the virtual currency with the Continue reading >>

Ethereum: The No. 2 Cryptocurrency Is Like The Currency Of An Innovative Country

Ethereum: The No. 2 Cryptocurrency Is Like The Currency Of An Innovative Country

Ethereum: The No. 2 Cryptocurrency Is Like The Currency Of An Innovative Country This article is an introduction to the Ethereum framework, and its cryptocurrency Ether, for beginners. Ethereum substantially differs from Bitcoin due to its much broader use case, being essentially a platform to execute smart contracts. It is therefore also a play on blockchain in general and on the internet of things. Being the no. 2 cryptocurrency by market capitalization, it is certain to be included in passive cryptocurrency products soon to be launched, generating incremental demand. While it is a long-term play, interested investors may therefore want to start building positions now. Virtually everybody not living under a rock is by now aware of the existence of Bitcoin (BTC), the biggest cryptocurrency, with US$100 billion total market value as of the time of this writing, although probably a majority of people has no deep understanding of what it is and how it works, as evidenced by remarks such as those recently made by the CEO of a major global bank . The set of people familiar with Ether, the No. 2 cryptocurrency by value (currently US28 billion), will be significantly smaller, with even fewer people understanding its workings, specifically the Ethereum framework of which it is a vital part. This article sets out to provide a brief overview of Ethereum, including discussion of a potential valuation framework. Based on the underlying fundamental attractiveness of Ether as well as the fact that its inclusion in soon-to-come passive cryptocurrency investment products is virtually guaranteed by its no. 2 status by market capitalization, investors may well consider starting to accumulate a position. Like Bitcoin, Ether is essentially a digital asset that lives as a credit position Continue reading >>

Why The Price Of Ethereum Has Risen By 5,700% During 2017

Why The Price Of Ethereum Has Risen By 5,700% During 2017

Why The Price Of Ethereum Has Risen by 5,700% During 2017 The price of the Ethereum networks native token, Ether has risen by over 5,700 percent in 2017. The market valuation of Ethereum recorded a 64-fold increase from $700 million to $45 billion, officially becoming the best performing cryptocurrency in the market year-to-date. Billionaire hedge fund investor and former Fortress executive Mike Novogratz expressed his optimism in regards to the short and mid-term price trend of Ether, stating that Ether is at an optimal position to lead strong rallies and sustain upward momentum. Just in the last few days ethereum has started to move, and I actually think its going to put a new high soon. I think we end the year at close to $500 in Ethereum, said Novogratz. Several analysts believe that the Ethereum market cap has risen mostly due to the exponential growth of the initial coin offering (ICO) market. By the end of 2017, ICOs are expected to have raised a total of $3 billion, given that more than $2.8 billion has been secured by ICO projects throughout the past 11 months. But, another reason for Ethereums rise this year is the increasing amount of activity from Ethereum developers who work on implementing new technologiesto improve the network. One notable project is thelatest Byzantium hard fork which saw the integration of Zcashs ZK-SNARKs, effectively enabling private or anonymous transactions to be processed on the Ethereum network. Currently, it is not possible for commercial decentralized applications to settle anonymous transactions on the Ethereum network. But, the Ethereum development community has made significant progress with the technology, given that a confidential ZK-SNARKs transaction has been processed on the Ethereum testnet. In a study released in July Continue reading >>

Ethereum Surpasses $1,000 For The First Time, Factors Behind Increase

Ethereum Surpasses $1,000 For The First Time, Factors Behind Increase

Ethereum Surpasses $1,000 For the First Time, Factors Behind Increase The recent surge in Ether price can be largely attributed to two main factors: the abrupt surge in the value of Ripple and the rising user activity of DApps. Ethereums native cryptocurrency Ether has surpassed the $1,000 mark for the first time, achieving a new all-time high merely five days into 2018. The recent surge in Ether price and the market valuation of the Ethereum Blockchain network can be largely attributed to two main factors: the abrupt surge in the value of Ripple (XRP) and the rising user activity of decentralized applications. In late December of 2017, Ripple overtook Ethereum for the first time in history, becoming the third alternative cryptocurrency with the exception of Ether and Bitcoin Cash to become the second largest cryptocurrency in the global market behind Bitcoin. As Cointelegraph previously reported , the South Korean cryptocurrency exchange market, which has accounted for nearly 50 percent of global Ripple trades over the past week, pushed the market valuation of Ripple from $40 bln to $120 bln within less than a month. The recent rally of Ethereum can be seen as its highly anticipated long overdue recovery and the early signs of competition against Ripple. Merely two days ago, Ripple became the first alternative cryptocurrency to surpass the $100 bln mark. Yesterday, on Jan. 4, the Ethereum network achieved a $100 bln market cap as well. Can the valuation of Ethereum be justified? Currently, the Ethereum Blockchain network processes more transactions than all of the Blockchain networks in the global market combined, including Bitcoin. According to EtherScan, the Ethereum network is settling nearly 1.4 mln transactions on a daily basis, which is substantially higher than Continue reading >>

How To Value Cryptocurrencies (including Bitcoin, Ethereum, Etc)

How To Value Cryptocurrencies (including Bitcoin, Ethereum, Etc)

How to Value Cryptocurrencies (including Bitcoin, Ethereum, etc) Cryptocurrencies are one of todays hottest asset classes to invest in. Bitcoin in particular has soared in price from pennies to thousands of dollars per unit in just a few years. But is it all a bubble, like the Dotcom era or tulip mania ? Or is this just the start of something bigger, or even revolutionary? I dont have the answers to those questions, but this article will provide a framework to help you think about how to value cryptocurrencies for yourself, including explaining a lot of the risks involved. Start here from the beginning or jump to the section you want: How to Value Bitcoin & Other Cryptocurrency Cryptocurrencies 101: A Blockchain Overview Bitcoin, the first cryptocurrency, was invented by an anonymous person or group named Satoshi Nakamoto and released publicly online in 2009 as open-source software and a white paper that explains the concept. Satoshi claimed to be a Japanese man in his thirties, but his identity has never been verified because all of his communication was via the Internet. He wrote with influences of British English, and had sleep/wake cycles according to his online activity that would presumably place him in North America, leading many to believe that hes not actually Japanese. Or maybe hes multi-ethnic. It might not even be a man. It could conceivably be a woman or a group of people. But most likely its a man using a pseudonym. And wherever he is, he has about a million bitcoins, worth billions of dollars now, which he has never spent. And he has gone dark; after having invented the concept, he no longer leads it and his whereabouts and identity are unknown. Anyway, Bitcoin was invented for the purpose of being a decentralized currency and method of payment. It does Continue reading >>

Ethereum Price Achieves New All-time High At $1,410, Market Shifts From Ripple To Ether

Ethereum Price Achieves New All-time High At $1,410, Market Shifts From Ripple To Ether

Ethereum Price Achieves New All-Time High at $1,410, Market Shifts From Ripple to Ether Ethereum (Ether) has solidified its position as the second most valuable cryptocurrency in the market as it overtook Ripple (XRP) by a staggering $60 billion within a five-day period. Since January 4, the market valuation of Ripple decreased from $148 billion to $73 billion, falling by nearly 2-fold in a single week. On the contrary, the market valuation of Ethereum surged from $85 billion to $135 billion, recording yet another 15 percent increase in value today, on January 10. The recent surge in the price of Ethereum can be largely attributed to the sell-off of XRP, which was likely triggered by the markets concerns over the sudden spike in the market valuation of Ripple. The harsh criticism of Ripple by analysts such as ConsenSys entrepreneur-in-residence Ryan Selkis could also have led to the decline in confidence towards Ripple. On December 29, Selkis noted that the majority of Ripples partner banks are not actually utilizing the Ripple network to process billions of dollars on a regular basis. Given that the transaction volume of Ripple and its network of banks can be only two factors that could possibly justify its market cap, the markets interest in Ripple decreased in the short-term. Per a source at one of the major banks re XRP: I know of no banks that are a) using it, or b) would touch it in any way as it is controlled by a SV company and 20% of all XRP in existence were taken by the founders. The product that Ripple are offering to banks is simply a point-to-point messaging tool with some smart cryptography underneath to ensure that transactions are atomic. The liquidity model used is the same as correspondent banking. In response to the criticism of Selkis and Nathaniel Continue reading >>

The Hard Thing About Crypto Price Valuation

The Hard Thing About Crypto Price Valuation

The Hard Thing About Crypto Price Valuation Feb 15, 2018 at 03:45 UTC|UpdatedFeb 15, 2018 at 12:02 UTC Tom Goldenberg is chief technology officer at Commandiv , a combined stock and crypto trading platform providing investors with automated trade recommendations and rebalancing tools. The New York Times economist Paul Krugman keeps bashing bitcoin. Why would you trade such a volatile asset, he asks, if it lacks fundamentals ? "So, bitcoin just lost half its value. Where does it now stand relative to its fundamentals? Hard to say, because there aren't any fundamentals. More than ever, this looks like a pure bubble." Let's take a step back. How important are fundamentals to investing? When dealing with public stocks, we have access to a broad array of company data - revenue growth, price-to-earnings ratio, etc. From my own observation, I've seen that while fundamentals can be useful, they usually aren't enough to decide which stocks to trade. A few months ago, I saw that a trader asked the quant community on the investment-algorithm platform Quantopian to build a successful trading strategy with only fundamental data. The results were disappointing. The resultant strategy underperformed the S&P 500 by 155 percent, prompting feedback from a moderator: "Purely fundamental-based strategies tend to have long predictive horizons on the factors. Their infrequent nature makes them hard to evaluate as you'd have to wait years to develop enough sample points." In other words, fundamentals are good, and there are surely some good strategies that use them. But many professional traders are looking beyond fundamentals to make trading decisions. So, the absence of traditional fundamentals from crypto shouldn't by itself be a deal-breaker. Another way of assessing an asset's risk and Continue reading >>

Ethereum Reclaims Its Spot As The Second Highest Valued Cryptocurrency

Ethereum Reclaims Its Spot As The Second Highest Valued Cryptocurrency

Ethereum Reclaims Its Spot as the Second Highest Valued Cryptocurrency Ether resumed its place as second largest blockchain by total valuation. But is that enough to remedy the growing issues with the token? After over a week of Ripple controlling the crypto-news headlines, ether is back to making waves. Ether finally resumed its spot as the second-largest blockchain in total value. At the time of this writing, current valuation sits at $1,191.02 for Ethereum. Just days ago, Ripple's XRP managed to best ether. The return to 'prominence' for ether might be encouraging to some investors, but others have noted a slew of technical problems that not even rising values can fix. Most of these issues get discussed throughout internal dev channels, according to CoinDesk's reports . However, the issues could be closely tied to basic blockchain functions. A recent example comes in a software glitch used to figure out how much a transaction should cost to send. It's called the "gas oracle," and it's led to huge inflation of user fees. And by huge, some of Ethereum's algorithms have forced users to overpay for transactions by nearly 70 percent at times. One of Ethereum's developers even told CoinDesk "something odd has been happening with the estimated gas price." "While it's still possible to transact on the network at a fairly low price, the oracle started returning increasingly high estimates," said developer Nick Johnson to CoinDesk . These tech issues are also plaguing Ethereum's future projects, as insiders noted. Casper, the ecologically-friendly attempt for cryptocurrencies, is currently splitting into "incompatible forks," according to CoinDesk . And the issues don't just weigh in the minds of investors. Some of cryptocurrency's biggest leaders also struggle with the often Continue reading >>

Ripple Price Falls: Ethereum Now Second Most Valuable Cryptocurrency | Fortune

Ripple Price Falls: Ethereum Now Second Most Valuable Cryptocurrency | Fortune

Its been a fierce battle for silver in the cryptocurrency world in recent days. On Monday, Ethereum regained the title of second most valuable cryptoccurency after rival asset Ripple held its ground for roughly a week. Ripple prices fell roughly 25% Monday to $2.50, leading a broader sell-off in the cryptocurrency markets. Bitcoin values also fell roughly 7.6% to $15,000, while Ethereum prices rose slightly, 2.5% to $1,155 . That pushed Ripples market capitalization down to $98.5 billion, and lifted Ethereums value to $111.9 billion, according to data firm CoinMarketCap . Bitcoin, meanwhile, maintains its top spot with a valuation of $255.1 billion. It was a hodge podge of news Monday that helped shape those shifting dynamics. For one, reports have emerged that the Chinese government , home to the worlds largest Bitcoin mining operation, would push for an orderly exit from the cryptocurrency mining business, Quartz reported . Then, CoinMarketCap, a major source of information in the crypto world, decided to remove data from South Korean exchanges in its calculation of asset prices. Since cryptocurrency generally trades higher in South Korea, the removal looked like a sudden across-the-board sell offtriggering panicked selling from investors who were not immediately made aware of the change. First, it was due to capital flows with investors realizing their profits from cryptocurrencies, said Iqbal Gandham, Managing Director at cryptocurrency brokerage eToro in an email to Fortune. Secondly, a data adjustment by CoinMarketCap, the most popular site for cryptocurrency pricing data, removed South Korean exchanges from its site, which have been known to trade much higher than the rest of the world. This morning we excluded some Korean exchanges in price calculations due to Continue reading >>

Ethereum (eth) Could Hit $10,000 And Above In The Future

Ethereum (eth) Could Hit $10,000 And Above In The Future

Ethereum (ETH) could hit $10,000 and above in the future! Ethereum (ETH) had a pretty good run in 2017, pushing up from less than $10 to over $1000 in early January 2018. And even after the recent drop in crypto prices, ETH seems to be the only crypto that has held its value, falling by a lower margin than the rest. But for a new investor, It is a conundrum. Thats because many cant tell whether its still a good investment, or whether the Ethereum boat sailed long ago. Well, the answer is simple, its still early days for ETH. In fact, a valuation of over $10,000 for Ethereum is not improbable in the long-run. Heres is why. Unlike bitcoin and other cryptos out there, Ethereum (ETH) has more than just speculative value. It is designed to allow developers create applications that can have a real-world use. Anyone who has some programming knowledge, and a good idea can create something of value on the Ethereum platform. This aspect of ETH has played a key role in pushing up its value to over $1000. Now imagine what will happen once Ethereum gets true mass adoption. Its demand will be so high that even a valuation of $10,000 could be an understatement. Basically, Ethereum is still at the early adoption stages, which makes it a high growth investment, even for investors who come in, at current prices. If you have ever invested in the stock markets, then you know that one of the secrets to success is investing in a company that has a visionary leadership team behind it. Apple under the leadership of Steve Jobs and his team is testament to this. However, this rule of thumb is not just restricted to the stock markets, it also applies to crypto currencies. The developer team behind a crypto is a critical indicator of its long-term growth or failure. And on this front, Ethereum (E Continue reading >>

2 Reasons Why It's So Hard To Value Bitcoin, Ethereum, Ripple, Litecoin, And Other Cryptocurrencies

2 Reasons Why It's So Hard To Value Bitcoin, Ethereum, Ripple, Litecoin, And Other Cryptocurrencies

2 Reasons Why It's So Hard to Value Bitcoin, Ethereum, Ripple, Litecoin, and Other Cryptocurrencies Deciphering a fair value for virtual currencies may prove impossible. Since the trough of the Great Recession in March 2009, the broad-based S&P 500 has returned nearly 300%. This is among the best intermediate-term returns that investors have ever seen, considering that the stock market averages a 7% historic annual return, inclusive of dividend reinvestment and adjusted for inflation. But cryptocurrencies have one-upped the stock market. In fact, you could argue that the smorgasbord of virtual currencies has left the stock market eating their dust. Since the year began, the aggregate market cap of all cryptocurrencies has increased from $17.7 billion to north of $300 billion as of Nov. 29, a return of close to 1,600%.These are lifetime gains that cryptocurrency investors have enjoyed in just 11 months' time (assuming they've held since the year began). Explaining the swift move higher in virtual currencies It's hard to pinpoint a single reason why digital currencies have exploded higher. Rather, it looks to be a combination of factors that's led to their ascent. First and foremost, there's a lot of excitement surrounding the blockchain technology that underlies most digital currencies. Blockchain is the digital and decentralized ledger responsible for recording all transactions without the need for a financial intermediary. These open-source networks are deemed to be especially secure since it would be difficult to alter logged data without someone else noticing. This technology has the potential to be a game-changer for the financial services industry. Folks are also pumped about the use of virtual tokens as a form of peer-to-peer and business-to-business payment. A h Continue reading >>

Valuing Bitcoin And Ethereum With Metcalfes Law

Valuing Bitcoin And Ethereum With Metcalfes Law

Valuing Bitcoin and Ethereum with Metcalfes Law Bob Metcalfes 1972 sketch of his vision for the original ethernet. Credit:PARC. Keywords: valuation, metcalfes law, NVT, PMR, bitcoin, ethereum Data sources: etherscan.io , blockchain.info , coinmetrics.io current to Feb 9/10 (BTC/ETH) of 2018 Here we report that Metcalfes Law, and similar laws, nearly perfectly correlate with ETH and BTCs USD price This suggests that cryptoassets that have reached critical mass behave like online social networks such as Facebook with their value defined by their usage (as measured by daily transactions or active addresses) We examine the Network Value-to-Transactions (NVT) ratio a popular metric for potentially identifying when the USD price of a cryptoasset has exceeded or fallen below the value suggested by its underlying daily USD transaction volume We propose a similar formula the Price-to-Metcalfe Ratio (PMR) and propose that it may have some advantages over NVT; however, we recognize that more research is needed before an optimal PMR is determined Note: an earlier version of this article incorrectly stated the formula for Metcalfes Law as M^(1.5). This was a typo in the formula only. M was used for all calculations denoted as M. In the 1980s, Robert Metcalfe, the inventor of Ethernet, proposed a formula: the value of a telecommunications network is is proportional to the square of the number of connected users of the system (n) Since its inception, Metcalfes Law (M) as it is now known, has become an influential formula for studying network effects and valuing online networks. In 2015, Zhang et al . found that Facebooks revenue a proxy for its value was proportional to the square of its monthly active users (MAU). In fact, M best fit Facebooks value when compared with other similar Continue reading >>

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