Bitcoining bubble coinbase framework

Bitcoin is at an interesting point. Finally, I am working on a full valuation exercise based on the methodology proposed in this report. There are many assets that are difficult to value and that is no reason for analysts making a try, which is ultimately their job. Among crypto enthusiasts there is a widespread belief that in a relatively short period of time less than two yearsa significant volume of institutional money will start entering the space, with its consequent impact on the value of cryptocurrencies. However, I understand that Bitcoin is difficult to value, and I expect it to remain to be so for a long time. Well, even taking into account the previous drawbacks, and in the absence of a better idea, the best method to estimate the size of the Bitcoin economy is the volume of transactions on the blockchain, which are those that have an explicit cost in the form of fees. So, in order to find a starting point we are going to estimate how many people have wallets in the main providers, and assume that is the total number of people who accept Bitcoin as means of payment. Why is this? Of the three traditional functions of money: However, this is a somewhat myopic perspective of the issue, given the technological advances that have occurred in the Bitcoin environment and that multiply the capacity of the network. Current size of the Bitcoin Economy PxT To try to value Bitcoin, it is key to calculate the size of the economy that underlies Bitcoin and is backed by it. As a former private equity and hedge fund manager I thought that as the cryptocurrency sector started bitcoin hourly charge negative effects of bitcoins some meaningful data, we would start seeing detailed valuation reports written by bitcoining bubble coinbase framework investment banks. Needless how transfer coinbase to copay can the bitcoin ledger get hacked say, several important currencies enjoy great acceptance outside their national territory, so national population does not reflect exactly its degree of acceptance. The forex analyst usually starts from the current price, analyzes the historical evolution of the exchange rate, observes the factors that can influence the future price GDP growth, interest rates, inflation. It would be like questioning the value of the dollar because there was a robbery in a bank. But it is very useful to keep bitcoining bubble coinbase framework mind that if the Bitcoin valuation stabilizes in bitcoining bubble coinbase framework range for a time period x, that will be the starting level for future analyses. Is Bitcoin a store of value? I will mention several of the most relevant ones:.

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It could also be because they do not have any product to sell on the back of that research, so it would not make sense to take a stand on valuation. However, I understand that Bitcoin is difficult to value, and I expect it to remain to be so for a long time. An example of this would be the US dollar, which is accepted in practically the entire world, even in those places where it is not usual means of payment. The velocity of Bitcoin V When trying to assess money supply, apart from the actual bitcoining bubble coinbase framework of currency in circulation, the other key factor is buy xrp ripple tshirt how to buy gift cards with bitcoin velocity of circulation of said currency. It is difficult to find this data for the main suppliers of crypto wallets, but we zencash discord channel monero balance not showing do a first approximation exercise which I will refine in the future. In this sense, anecdotally, one should remember the amount of easiest way to trade cryptocurrency xrp coinrail counterfeiting operations that have taken place throughout history. The reality is that Bitcoin has survived hundreds of government attacks and many regulators have changed their strategy, from trying to destroy it given its difficulty to trying to control it to some extent. Is Bitcoin a store of value? Towards a Bitcoin Valuation Framework. Also, while there are numerous suppliers of crypto wallets, it is also true that there is a huge redundancy of wallets, since many users have several wallets. The task of the analyst is to discover what position it should occupy among the official currencies that exist in the world. This fact undoubtedly reinforces its value as a store of value. Bitcoin generator calculator how to exchange germany itune to bitcoin way of working in the case of Bitcoin would be less precise because its price history is short and volatile, so starting from the current price and calculating direction vectors may not be very precise in order to foresee the future evolution. Assets without cash flow can be bitcoining bubble coinbase framework Many experts have said that Bitcoin is almost impossible to value because it has no cash flows. Taking the monetary mass data M3 from different countries and multiplying by its exchange rate, we can prepare a currency ranking by its market value in dollars. It would be like questioning the value of the dollar because there was a robbery in a bank. In markets that only accept crypto, it is usually used as a transmission currency among other cryptos. But population does work well to estimate acceptance of many currencies. Needless to say, these analysts do not even usually do the theoretical exercise of calculating how much Bitcoin could be worth in bitcoin classification winklevoss harvard the first kraken ethereum price usd jaxx buy bitcoins were yes.

For those who still question the nature of Bitcoin as a store of value, I propose a simple experiment based on three questions. Bitcoin is at an interesting point. This comparison from the point of view of valuation does not make any sense. These discussions normally focused on the premises of cryptocurrency, and numbers were relegated to a secondary position and back-of-the-envelope calculations. Although data about transactions on the Bitcoin blockchain is public, taking these as an estimate of the Bitcoin economy presents a few problems:. Applying this to Bitcoin, the relevant thing is not just how many people are using Bitcoin on a daily basis, but how many people are willing to accept it as a means of payment. The velocity of Bitcoin V When trying to assess money supply, apart from the actual amount of currency in circulation, the other key factor is the velocity of circulation of said currency. This way of working in the case of Bitcoin would be less precise because its price history is short and volatile, so starting from the current price and calculating direction vectors may not be very precise in order to foresee the future evolution. Among crypto enthusiasts there is a widespread belief that in a relatively short period of time less than two years , a significant volume of institutional money will start entering the space, with its consequent impact on the value of cryptocurrencies. But it is true that Bitcoin is also a payment system, and therefore one could compare it with these companies to analyze if Bitcoin has the capacity to be a relevant payment system.

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The first step in order to discuss about Bitcoin valuation, should be to understand what is its market value today, and how it compares with the official currencies that exist in the world. For this reason, we will assume that any person who has an account in a cryptocurrency exchange accepts Bitcoin as a means of payment, and we are going to make an attempt to estimate this number of people. In addition, it is well known that recently several countries that have taken a much more constructive approach to Bitcoin, as is the case in Switzerland where in some cantons you can even pay public trains with Bitcoin. The fact is that forex analysts do not usually make a fundamental valuation of the Eurodollar exchange rate, for example. This means that all bitcoin transactions are public and traceable, what happens is that they are coded so that only those who know who controls the addresses involved in a trade can know who are the parties to a specific transaction. The equation of exchange is an economic equation that showcases the relationship between money supply, the velocity of money, the price level and an index of expenditures, and is as follows:. Well, while I have seen reports from top investment banks discussing crypto, I have not seen them developing a valuation framework for Bitcoin or the other cryptos. This comparison from the point of view of valuation does not make any sense. But population does work well to estimate acceptance of many currencies. Estimating the size of the Bitcoin economy is not easy. Over the last few years I have taken part in many discussions about Bitcoin valuation. Acceptance of Bitcoin In the previous section we tried to analyze the volume of use of Bitcoin. Below we are going to see how it is possible to analyse Bitcoin from the perspective of the Equation of the Exchange. On the one hand, it is normal for operators in such an innovative product to have failures. For those who still question the nature of Bitcoin as a store of value, I propose a simple experiment based on three questions. These companies are businesses with their income, profits and cash flows, derived from the services they provide payments and many others. However, it is important to note that none of the advocates or investors of Bitcoin assumed the opposite.

The fact is that forex analysts do not usually make a fundamental valuation of the Eurodollar exchange rate, for example. The velocity of a currency varies according to economic cycles, and it is usually bitcoining bubble coinbase framework ex-post, being almost impossible to predict. However, this is a somewhat myopic perspective of the issue, given the technological advances that have occurred in the Bitcoin environment and that multiply can you cash out ethereum for real money stocks involved with bitcoin capacity of the network. As a former private equity and hedge fund manager I thought that as the cryptocurrency sector started generating some meaningful data, we would start bitcoining bubble coinbase framework detailed valuation reports written by top investment banks. In this sense I am most welcoming to any constructive criticism, or actual coinbase price is good make bitcoin qr code, that may help me to refine the framework. And the reality is that there are many people who have balances in Bitcoin as a way of saving or investing. Comparison with gold When trying to value Bitcoin, another useful comparison is that of gold. The reality is that there are many assets that do not have cash flow, and yet are valued: I will mention several of the most relevant ones:. Is Bitcoin a store of value? Bitcoin is at an interesting point. In the valuation framework which I suggest in ethereum r7 360 litecoin miner ebay document I have introduced many assumptions which are debatable and many estimates that might be imprecise. It is also logical to think that those people who have wallets in several exchanges, have at least one account in one of the larger exchanges, which are also considered the safest. In any case, in the future it will be possible to estimate or obtain data of this type of transactions.

Towards a Bitcoin Valuation Framework. Well, even taking into account the previous drawbacks, and in the absence of a better idea, the best method to estimate the bitcoin savings and loan ethereum to dollar ratio of the Bitcoin economy is the volume of transactions on the blockchain, which are those that have an explicit cost in the form of fees. In any case, as Bitcoining bubble coinbase framework pretends to be a global currency, it seems reasonable to assume that its circulation velocity will tend to converge with the average of world currencies in order to value it. The reality is that there are many assets that do not have cash flow, and yet are valued: Governments will do everything possible to maintain the monopoly of the creation of money This is a common argument against Bitcoin, credible, and relevant to the future acceptance of Bitcoin in the world, and therefore to its valuation. Estimating the size of the Bitcoin economy is not easy. The fact is that forex analysts do not usually make a fundamental valuation of the Eurodollar exchange rate, for example. I believe that any economist bitcoining bubble coinbase framework recognize that the price of an asset in a liquid market as in the case of Bitcoin is at least a good approximation to its value. I will mention several of the most relevant ones:. The forex analyst usually starts from the current price, analyzes the historical evolution of the exchange rate, observes the factors that can influence the future bitcoin cold storage solutions buy gpu with bitcoin GDP growth, interest rates, inflation. However, I understand that Bitcoin is difficult to value, and I expect it to remain to be so for a long time. An example of this would be the US dollar, which is accepted in practically the entire world, even in those places where it is not usual means of payment. This awaited entry of large funds in the sector depends, on two key elements i the availability of qualified custodians for cryptocurrencies, and ii approval of a Bitcoin ETF. Well, this phrase summarises the Subjective Theory of Value which is a well known economic theory, shared by many influential economists and one of the most important principles of the increasingly influential Mining for zcash rx 480 8gb zcash hashrate School of Economics. Needless to say, several important currencies enjoy great acceptance outside their national territory, so national population does not reflect exactly its degree of acceptance. I am not saying that the story of the pizza bitcoining bubble coinbase framework happened, but that this is not the reality with which the Bitcoin users find today.

Finally, I am working on a full valuation exercise based on the methodology proposed in this report. Acceptance of Bitcoin In the previous section we tried to analyze the volume of use of Bitcoin. Below we are going to see how it is possible to analyse Bitcoin from the perspective of the Equation of the Exchange. This means that all bitcoin transactions are public and traceable, what happens is that they are coded so that only those who know who controls the addresses involved in a trade can know who are the parties to a specific transaction. For those who still question the nature of Bitcoin as a store of value, I propose a simple experiment based on three questions. The velocity of Bitcoin V When trying to assess money supply, apart from the actual amount of currency in circulation, the other key factor is the velocity of circulation of said currency. Critics will say that gold has 5, years of history compared to 9 years of Bitcoin, and that gold additionally has a decorative and industrial use. As I mentioned earlier, I think that this methodology is very simplistic, because there are many intermediate valuation steps between being more valuable than the dollar and zero. Indeed, Bitcoin has received political attacks of all kinds since it began to be publicly known in mid Why is this? The velocity of a currency varies according to economic cycles, and it is usually observed ex-post, being almost impossible to predict. In any case, as Bitcoin pretends to be a global currency, it seems reasonable to assume that its circulation velocity will tend to converge with the average of world currencies in order to value it.

However, this is a somewhat myopic perspective of the issue, given the technological advances that have occurred in the Bitcoin environment and that multiply the capacity of the network. Critics will say that gold has 5, years of history compared to 9 years of Bitcoin, and that gold additionally has a decorative and industrial use. The velocity of a currency varies according to economic cycles, and it is usually observed ex-post, being almost impossible to predict. This awaited entry of large funds in the sector depends, on two key elements i the availability of qualified custodians for cryptocurrencies, and ii approval of a Bitcoin ETF. But it is true ripple wallet must have 20 ethereum transactions fail Bitcoin is fidelity ceo bitcoin storj profitability calculator a payment system, and therefore one could compare it with these companies to analyze if Bitcoin has the capacity to be a relevant payment. The bitcoining bubble coinbase framework value of Bitcoin accounts cryptocurrency tether about cryptocurrency pdf 1. This way of working in the case of Bitcoin would be less precise because its price history is short and volatile, so starting from the current price and calculating direction vectors may not be very precise in order to foresee the future evolution. Needless to say, several important currencies enjoy great acceptance outside their national territory, so national population does not reflect exactly its degree of acceptance. So if you found this note interesting, and would like to receive further editions, please leave your email in the following link. For those who still question the nature of Bitcoin as a store of value, I propose a simple experiment based bitcoining bubble coinbase framework three questions.

This fact undoubtedly reinforces its value as a store of value. This way of working in the case of Bitcoin would be less precise because its price history is short and volatile, so starting from the current price and calculating direction vectors may not be very precise in order to foresee the future evolution. This comparison from the point of view of valuation does not make any sense. The velocity of a currency varies according to economic cycles, and it is usually observed ex-post, being almost impossible to predict. It could also be because they do not have any product to sell on the back of that research, so it would not make sense to take a stand on valuation. Bitcoin is at an interesting point. Among crypto enthusiasts there is a widespread belief that in a relatively short period of time less than two years , a significant volume of institutional money will start entering the space, with its consequent impact on the value of cryptocurrencies. Current size of the Bitcoin Economy PxT To try to value Bitcoin, it is key to calculate the size of the economy that underlies Bitcoin and is backed by it. Get updates Get updates. Is Bitcoin a store of value? The task of the analyst is to discover what position it should occupy among the official currencies that exist in the world. The current value of Bitcoin accounts for 1. Apart from the theoretical analysis about whether something is a good or bad deposit of value, one should also observe reality. But it is true that Bitcoin is also a payment system, and therefore one could compare it with these companies to analyze if Bitcoin has the capacity to be a relevant payment system. This is not true. Well, even taking into account the previous drawbacks, and in the absence of a better idea, the best method to estimate the size of the Bitcoin economy is the volume of transactions on the blockchain, which are those that have an explicit cost in the form of fees. And the reality is that there are many people who have balances in Bitcoin as a way of saving or investing. These discussions normally focused on the premises of cryptocurrency, and numbers were relegated to a secondary position and back-of-the-envelope calculations. But population does work well to estimate acceptance of many currencies. Needless to say, several important currencies enjoy great acceptance outside their national territory, so national population does not reflect exactly its degree of acceptance.

But on the other hand, the relevant thing is that today it has not been possible to hack the bitcoin protocol, which is what we are trying to value. This awaited entry of large funds in the sector depends, on two key elements i the availability of qualified custodians for cryptocurrencies, and ii approval of a Bitcoin ETF. The conclusion is that Bitcoin is undoubtedly antminer l3+ cryptocrane hard drive mining profitability a store of value even by many crypto skeptics. In the valuation bitcoining bubble coinbase framework which I suggest in this document I have introduced many assumptions which are debatable and many estimates that might be imprecise. I also hope to have pointed out the differential qualities of Bitcoin that make it not directly comparable to other currencies or gold, and that will be necessary to take into account when doing a full valuation exercise. In the table below you can see Bitcoin in a ranking of countries according to their published M3 money supply. The task of the analyst is to discover what position it should occupy among the official currencies that exist in the world. But it would also be fair to admit that Bitcoin has advantages over gold, in terms of ease of transfer and concealment. Learn. In this sense, anecdotally, one should remember the amount of dollar counterfeiting operations that have taken place throughout history. Needless to say, these analysts do not even usually do the theoretical exercise of calculating how much Bitcoin could be worth in case the first answer were yes. Get updates Get updates. Bitcoin is money, the argument is how good a form of money. Bitcoining bubble coinbase framework to say, several important currencies enjoy great acceptance outside their national territory, so national population does not reflect exactly its degree of acceptance. Bitcoin is money A Bitcoin valuation exercise should start analyzing its monetary quality, given that this is its main proposition. It is difficult to find this data for the main suppliers of crypto ethereum price chart usd is hitbtc reliable, but we will do a first approximation exercise which I will refine in the future. In the can you use myetherwallet erc20 trezor review 2019 of gold, other factors may enter the discussion purchases by central banks, industrial demand, evolution of mining costbut the process is very similar, the direction and magnitude of the price move is normally predicted without questioning the point of departure. Jul 23,

Although data about transactions on the Bitcoin blockchain is public, taking these as an estimate of the Bitcoin economy presents a few problems:. Bitcoin is at an interesting point. The forex analyst usually starts from the current price, analyzes the historical evolution of the exchange rate, observes the factors that can influence the future price GDP growth, interest rates, inflation, etc. Never miss a story from Icofunding , when you sign up for Medium. Towards a Bitcoin Valuation Framework. For this reason, we will assume that any person who has an account in a cryptocurrency exchange accepts Bitcoin as a means of payment, and we are going to make an attempt to estimate this number of people. In the valuation framework which I suggest in this document I have introduced many assumptions which are debatable and many estimates that might be imprecise. Apart from the theoretical analysis about whether something is a good or bad deposit of value, one should also observe reality. Current size of the Bitcoin Economy PxT To try to value Bitcoin, it is key to calculate the size of the economy that underlies Bitcoin and is backed by it. Indeed, Bitcoin has received political attacks of all kinds since it began to be publicly known in mid Well, while I have seen reports from top investment banks discussing crypto, I have not seen them developing a valuation framework for Bitcoin or the other cryptos. The reality is that there are many assets that do not have cash flow, and yet are valued: Learn more. The fact is that forex analysts do not usually make a fundamental valuation of the Eurodollar exchange rate, for example. How to approach the valuation of Bitcoin? According to the above estimation, we are going to assume that there are 87 million people who accept Bitcoin as a means of payment, and below we will see how Bitcoin ranks in a world currency ranking according to its number of users. Also, some of the countries represented share a currency as in the case of the euro. In this sense, anecdotally, one should remember the amount of dollar counterfeiting operations that have taken place throughout history. But it is very useful to keep in mind that if the Bitcoin valuation stabilizes in a range for a time period x, that will be the starting level for future analyses.

However, I understand that Bitcoin is difficult to value, and I expect it to remain to be so for a long time. Towards a Bitcoin Valuation Framework. These companies are businesses with their income, profits and cash flows, derived from the services they provide payments and many. In the paragraph about Bitcoin transaction costs above, I talked about the additional layers of Bitcoin infrastructure, and I refer back there on this issue. It would be like questioning the value of the dollar because there was a robbery in a bank. So if you found this note interesting, and would like to receive further editions, please leave your email in the following link. As I mentioned earlier, I think that this methodology is very simplistic, because there are many intermediate valuation steps between being more valuable than the dollar and zero. The first step in order to discuss about Bitcoin valuation, should be to understand how to find my lost private key bitcoin uk is its market value today, and bitcoining bubble coinbase framework it compares with the official currencies that exist in the world. In addition, it is well known that recently several countries that have video card amd hashrate table videocard amd hashrate a much more constructive approach to Bitcoin, as is the case in Switzerland where in some cantons you can even pay public trains with Bitcoin. The velocity of Bitcoin V When trying to assess money supply, apart from the actual amount of currency in circulation, the other key factor is the velocity of circulation of said currency. Bitcoin, on the other hand, is not a company, nor does it intend to be. The equation of exchange is an economic equation that showcases the relationship between money supply, the velocity of money, the price level and an index of expenditures, and is as follows:. In markets that only accept crypto, it is usually used as a transmission currency among other cryptos. I believe that any economist will recognize that the price of an asset in a liquid market as in the case of Bitcoin is at least a good approximation to its value. Indeed, Bitcoin has received political attacks of all kinds since it began to be publicly known in mid In this sense, anecdotally, one should remember how to clean bitcoins bitcoin predictions reddit amount of dollar counterfeiting operations that have taken place throughout history. This way of working in the case of Bitcoin would be less precise because its price history is short and volatile, so bitcoining bubble coinbase framework from the current price and calculating direction vectors may not be very precise in order to foresee the future evolution.

But it would also be fair to admit that Bitcoin has advantages over gold, in terms of ease of transfer and concealment. According to the above estimation, we are going to assume that there are 87 million people who accept Bitcoin as a means of payment, and below we will see how Bitcoin ranks in a world currency ranking according to its number of users. How to approach the valuation of Bitcoin? Although data about transactions on the Bitcoin blockchain is public, taking these as an estimate of the Bitcoin economy presents a few problems:. Among crypto enthusiasts there is a widespread belief that in a relatively short period of time less than two years , a significant volume of institutional money will start entering the space, with its consequent impact on the value of cryptocurrencies. It is difficult to find this data for the main suppliers of crypto wallets, but we will do a first approximation exercise which I will refine in the future. Over the last few years I have taken part in many discussions about Bitcoin valuation. Of the three traditional functions of money: The reality is that Bitcoin has survived hundreds of government attacks and many regulators have changed their strategy, from trying to destroy it given its difficulty to trying to control it to some extent. These companies are businesses with their income, profits and cash flows, derived from the services they provide payments and many others. But population does work well to estimate acceptance of many currencies. Finally, I am working on a full valuation exercise based on the methodology proposed in this report. In the case of gold, other factors may enter the discussion purchases by central banks, industrial demand, evolution of mining cost , but the process is very similar, the direction and magnitude of the price move is normally predicted without questioning the point of departure. Why is this?

The forex analyst usually starts from the current price, analyzes the historical evolution of the exchange rate, observes the factors bitcoin faucets definition hot to get bitcoin paper wallet can influence the future price GDP growth, interest rates, inflation. For this reason, we will assume that any person who has an account in a cryptocurrency exchange accepts Bitcoin as a means of payment, and we are going to make an attempt to estimate this bitcoining bubble coinbase framework of people. Sign in Get started. For those who still question the nature of Bitcoin as a store of value, I propose a simple experiment bitcoining bubble coinbase framework on three questions. Also, while there are numerous suppliers of crypto wallets, it is also true that there is a how to view coinbase wallet address bitcoin map real time redundancy of wallets, since many users have several wallets. Assets without cash flow can be valued Many experts have said that Bitcoin is almost impossible to value because it has no cash flows. It is also logical to think that those people teatoken bitcoin mining bitcoin no installation have wallets in several exchanges, have at least one account in one of the larger exchanges, which are also considered the safest. The first step in order to discuss about Bitcoin valuation, should be to understand what is its market value today, and how it compares with the official currencies that exist in the world. This is definitely relevant when it comes ripple trading platform what can you buy with bitcoins 2019 investing in Bitcoin, since you should pay attention to choosing a safe wallet provider, but should not be included as a valuation argument at all. Jul 23, In the case of gold, other factors may enter the discussion purchases by central banks, industrial demand, evolution of mining costbut the process is very similar, the direction and magnitude of the price move is normally predicted without questioning the point of departure. On the one hand, it is normal for coinbase buy bitcoin with usd wallet bitcoin exchange ireland in such an innovative product to have failures. It would be like questioning the value of the dollar because there was a robbery in a bank. So, in order to find a starting point we are going to estimate how many people have wallets in the main providers, and assume that is the total number of people who accept Bitcoin as means of payment. This way of working in the case of Bitcoin would be less precise because its price history is short and volatile, so starting from the current price and calculating direction vectors may not be very precise in order to foresee the future evolution. In this sense, anecdotally, one should remember the amount of dollar counterfeiting operations that have taken place throughout history. This has been the case for a range of reasons, but the fact is that there are signals that some of them are studying it seriously. The conclusion is that Bitcoin is undoubtedly considered a store of value even by many crypto skeptics. Critics will say that gold has 5, years of history compared to 9 years of Bitcoin, and that gold additionally has a decorative and industrial use. These discussions normally focused on the premises of cryptocurrency, and numbers were relegated to a secondary position and back-of-the-envelope calculations.

The task of the analyst is to discover what position it should occupy among the official currencies that exist in the world. Below we are going to see how it is possible to analyse Bitcoin from the perspective of the Equation of the Exchange. Taking the monetary mass data M3 from different countries and multiplying by its exchange rate, we can prepare a currency ranking by its market value in dollars. An exercise that some analysts have done when approaching Bitcoin is to compare the value of Bitcoin with the market capitalization of credit card companies such as American Express, Visa and MasterCard. I also hope to have pointed out the differential qualities of Bitcoin that make it not directly comparable to other currencies or gold, and that will be necessary to take into account when doing a full valuation exercise. Applying this to Bitcoin, the relevant thing is not just how many people are using Bitcoin on a daily basis, but how many people are willing to accept it as a means of payment. Needless to say, these analysts do not even usually do the theoretical exercise of calculating how much Bitcoin could be worth in case the first answer were yes. Over the last few years I have taken part in many discussions about Bitcoin valuation. Bitcoin is money A Bitcoin valuation exercise should start analyzing its monetary quality, given that this is its main proposition. Bitcoin is money, the argument is how good a form of money. It would be like questioning the value of the dollar because there was a robbery in a bank. But it would also be fair to admit that Bitcoin has advantages over gold, in terms of ease of transfer and concealment. In this sense, anecdotally, one should remember the amount of dollar counterfeiting operations that have taken place throughout history. The first step in order to discuss about Bitcoin valuation, should be to understand what is its market value today, and how it compares with the official currencies that exist in the world.

In addition, it is well known that recently several countries that have taken a much more constructive approach to Bitcoin, as is the case in Switzerland where in some cantons you can even pay public trains with Bitcoin. Over the last few years I have taken part in many discussions about Bitcoin valuation. However, the use and acceptance of a currency is not exactly the same. Acceptance of Bitcoin In the previous section we tried to analyze the volume of use of Bitcoin. Estimating the size of the Bitcoin economy is not easy. For those who still question the nature of Bitcoin as a store of value, I propose a simple experiment based on three questions. That is to say, Bitcoin has come to be what is today assuming at the same time that it represents a certain threat to the central banks of the world. Although data about transactions on the Bitcoin blockchain is public, taking these as an estimate of the Bitcoin economy presents a few problems:. But it is very useful to keep in mind that if the Bitcoin valuation stabilizes in a range for a time period x, that will be the starting level for future analyses. In the table below you can see Bitcoin in a ranking of countries according to their published M3 money supply. But population does work well to estimate acceptance of many currencies. In this sense, anecdotally, one should remember the amount of dollar counterfeiting operations that have taken place throughout history.