Alt Coin Thread (Vertcoin, OMG, CVC, PAY etc).

Dohnjoe

kaymin wrote: »

Ultimately the value of anything is the present value of the future cash flows it will generate. Companies and economies generate underlying positive cash flows - this is what supports the value of a company and an economy's currency. Crypto currencies generate no underlying cash flows and therefore have zero value.

What if a company produces a product that creates a cash flow but has raised all it's funding via ICO? (issuing crypto tokens to investors)

What is the difference between a real share and a digital token representing one? Both can give voting rights and dividends, and you don't really "own" a portion of Coca-Cola by holding a few shares

If the performance of the company increases, the perceived market value will also increase, which will result in the tokens increasing in price (they become more desirable)

The company gets to grow and the investors get to grow their returns via increased token (share) value and dividends

A share system indirectly incentivizes and generates future potential cash flow in the same way a token would

Is there really a fundamental difference between the two?

hmmm

Dohnjoe wrote: »

What if a company produces a product that creates a cash flow but has raised all it's funding via ICO? (issuing crypto tokens to investors)

What is the difference between a real share and a digital token representing one? Both can give voting rights and dividends, and you don't really "own" a portion of Coca-Cola by holding a few shares

Well actually you do. Underlying the shares is a real company, with real turnover and real profits, which are paid to the shareholders. This is kind of basic stuff.

If I raise money selling magic beans, that's it - I've raised money, but there is no underlying business which generates profits on the back of this money.

Cryptocurrencies are magic beans, and the very definition of a pyramid scheme - they need new investors to generate money. I know most of you know this and hope to be out before the crash, but if anyone is reading this and doesn't know what I'm talking about you need to keep your money out of cryptocurrencies.

kaymin

Dohnjoe wrote: »

What if a company produces a product that creates a cash flow but has raised all it's funding via ICO? (issuing crypto tokens to investors)

What is the difference between a real share and a digital token representing one? Both can give voting rights and dividends, and you don't really "own" a portion of Coca-Cola by holding a few shares

If the performance of the company increases, the perceived market value will also increase, which will result in the tokens increasing in price (they become more desirable)

The company gets to grow and the investors get to grow their returns via increased token (share) value and dividends

A share system indirectly incentivizes and generates future potential cash flow in the same way a token would

Is there really a fundamental difference between the two?

There's no fundamental difference between the two but which crypto currencies are backed up by actual cash flow / profit generating businesses? I'm interested in comparing the value of the crypto currency to the fundamental value of the underlying business

WhiteMemento9

Green shoots happening.

grindle

kaymin wrote: »

Crypto currencies generate no underlying cash flows and therefore have zero value.

hmmm wrote: »

Cryptocurrencies are magic beans, and the very definition of a pyramid scheme - they need new investors to generate money.

You both haven't kept a track of what's been happening at all. So much nonsense.
ICOs are quickly replacing VC funding and IPOs for new tech or fintech ventures - actual businesses are running in the backgrounds of these coins providing value, utility which a customer may want and thus the price rises as the utility is proven as a necessity for it's users.
The value for the dev team is through a percentage of the tokens usually kept locked up for periods of time and/or fees per token use.

kaymin wrote: »

There's no fundamental difference between the two but which crypto currencies are backed up by actual cash flow / profit generating businesses? I'm interested in comparing the value of the crypto currency to the fundamental value of the underlying business

Most companies (projects, rather) aren't fully set up yet as this was the year of the ICO boom, everything is a beta product mostly being crowdfunded, some haven't even had their ICO yet but have Ivy League devs and Peter Thiel backing them so quality is presumed if not outright guaranteed:

BAT
SUB
DICE
BNTY
OMG
SALT
XRL
RLC
REQ
ARDR
IOTA
FUN
BNB
GEMS
NMR (please nobody buy this, the token has a great use for the hedge fund's aims, zero reason for speculative investment right now - it's designed to let data scientists dump their coins when the competition ends)

There are many more that have utility and will rise though use, these are just a few. Again, most coins crap, some good.
You need to get past the idea of shareholding, not every coin has dividend sharing, you have to take into account the liquidity of the token and the use of it.
How you decide to value any of those lies in your perception of what kind of disruptive effect they could have in their respective industries, but you're more than a bit biased towards the traditional corporate status quo and don't seem to understand that utility provided is a value in itself.

Dohnjoe

hmmm wrote: »

Well actually you do. Underlying the shares is a real company, with real turnover and real profits, which are paid to the shareholders. This is kind of basic stuff.

I don't think you read my post.

smacl

kaymin wrote: »

Lol - I wouldn't touch cryptos with a bargepole - that's the advise I gave someone that asked me about them when bitcoins were $3000. Was I wrong - well, I see zero value long-term so my case has yet to be proven.

So even now, with all the doom and gloom going on, if the person you were advising chose to ignore your words of wisdom they'd be more than three times better off. Not quite getting your point here and can't imagine the person you were advising being any too chuffed with you either.

EagererBeaver

grindle wrote: »

some haven't even had their ICO yet but have Ivy League devs and Peter Thiel backing them so quality is presumed if not outright guaranteed

That, in my opinion, is very dangerous thinking. Quality is guaranteed because smart people are involved? More importantly, smart people being involved is no guarantee of success. Look at all the billion dollar unicorns they have emerged in the tech space over the last few years. So many of them yet to turn even a single cent of profit.

Dohnjoe

kaymin wrote: »

There's no fundamental difference between the two but which crypto currencies are backed up by actual cash flow / profit generating businesses? I'm interested in comparing the value of the crypto currency to the fundamental value of the underlying business

It's pretty new, mostly startups that use an ICO or selling tokens directly on the market as funding in order to produce a blockchain related product or service. They can then partner with or sell to industry (e.g. Stellar, Ripple, Vechain)

Some crypto exchanges (profit making trading platforms) issue tokens similar to shares to fund their startup/expansion. They can even offer to funnel profits back to "share" holders via dividend or reward systems

kaymin

grindle wrote: »

ICOs are quickly replacing VC funding and IPOs for new tech or fintech ventures - actual businesses are running in the backgrounds of these coins providing value, utility which a customer may want and thus the price rises as the utility is proven as a necessity for it's users.

What exactly is the utility you refer to?

Which tech other than blockchain has been funded by ICOs?

hmmm

Dohnjoe wrote: »

Some crypto exchanges (profit making trading platforms) issue tokens similar to shares to fund their startup/expansion. They can even offer to funnel profits back to "share" holders via dividend or reward systems

So crypto-exchanges, which make money by charging fees for people buying and selling magic beans, are funding themselves by selling a new type of magic beans?

You know full well what you are doing

Jim Ellis

Most of the alt coins seem to back in the green, some double digit growth percenetage last 24 hours. (stellar/dash/ripple/neo/nem).

grindle

EagererBeaver wrote: »

That, in my opinion, is very dangerous thinking. Quality is guaranteed because smart people are involved? More importantly, smart people being involved is no guarantee of success. Look at all the billion dollar unicorns they have emerged in the tech space over the last few years. So many of them yet to turn even a single cent of profit.

"if not"

You missed that bit. It certainly indicates quality level of production.
Terrible products like Snapchat reaching insane valuations makes as much sense to me as Cardano's cap, and some of the better unicorns you may be talking about (not turning profits since forever) are actively destroying their competition.
Amazon only recently started posting profits!
Would you have gone short on Amazon for the last decade? Presumed they'd fail? Say they have no value because negative cashflow?
Maybe you would have, and that's why you wouldn't deserve to gain from their domination.

kaymin wrote: »

What exactly is the utility you refer to?

Which tech other than blockchain has been funded by ICOs?

Depends on what the token wants to do.
BAT is a token aimed at micropayments and advertising on the internet, you get paid a piece of what used to be Google's AdSense fee to see less spammy ads if you choose to have ads enabled.
The token can also be used to contribute towards every website you visit in proportion to the time you spent looking at them.

I'm not sure what you mean by "Which tech other than blockchain has been funded by ICOs?"

kaymin

grindle wrote: »

Depends on what the token wants to do.
BAT is a token aimed at micropayments and advertising on the internet, you get paid a piece of what used to be Google's AdSense fee to see less spammy ads if you choose to have ads enabled.
The token can also be used to contribute towards every website you visit in proportion to the time you spent looking at them.

I'm not sure what you mean by "Which tech other than blockchain has been funded by ICOs?"

I have to say, their business strategy seems a little flaky:

'In the ecosystem, advertisers will give publishers BATs based on the measured attention of users. Users will also receive some BATs for participating. They can donate them back to publishers or use them on the platform. This transparent system keeps user data private while delivering fewer but more relevant ads. Publishers experience less fraud while increasing their percentage of rewards. And advertisers get better reporting and performance.'

Has anyone valued this business to justify the $500m+ current valuation? How many advertisers / publishers have they signed up? Have they any revenue?

grindle

kaymin wrote: »

I have to say, their business strategy seems a little flaky:

'In the ecosystem, advertisers will give publishers BATs based on the measured attention of users. Users will also receive some BATs for participating. They can donate them back to publishers or use them on the platform. This transparent system keeps user data private while delivering fewer but more relevant ads. Publishers experience less fraud while increasing their percentage of rewards. And advertisers get better reporting and performance.'

Has anyone valued this business to justify the $500m+ current valuation? How many advertisers have they contracted? Have they any revenue?

Personally I think it's overvalued right now as the way you should be thinking about it is more... How much is that industry worth per year? What kind of cap should this token have if it takes X% of that market's turnover? People are certainly pricing in with very forward speculation.

Many publishers contacted & added, many don't want to be named because Google would look at them...unfavourably.
"Over 150 publishers have joined Brave Payments. Wikihow, Archive.org, and Smashing Magazine have given us approval to use their names. Other large name publishers will be added."
Apart from the ones contacted and already approved ANY site that you decide to donate to will have those funds tagged for them - an incentive to use the system when there's already money waiting for you to claim.

Their revenue will be a percentage of the ad fee, so they have a reason to commit to making it a success.
You can ignore the crypto side of the business completely and use their Brave browser (mobile is best, desktop a bit buggy) for yourself. Great for ad-free browsing and you can completely disregard the valueless magic beans.

Pussyhands

Looked at my portfolio earloer and was down 55%....surprised to see I've made like 20% of ky original investment back. DBC up 30% in the last day.

Dohnjoe

hmmm wrote: »

So crypto-exchanges, which make money by charging fees for people buying and selling magic beans, are funding themselves by selling a new type of magic beans?

You know full well what you are doing

So you seemed to ignore the part of my post that was about revenue/profit generating companies (or didn't read it)

Then ignored that part again in another post to labour the same point

Hmmm

Some of these coins are straight up ponzi's, some of them are indirect ponzi's, some of them are nonsense coins, many are "digital gold" with value derived from artificially created scarcity (which the market places a value on) some of these coins represent tokens or shares in a profit-making startups, enterprises or businesses

If you started up a blockchain related business tomorrow offering services to Irish companies, funded with a token-distribution, and started gaining revenue from providing those services. That token would have a tangible market value. The only question would be if the market value fairly represented the value of the company.

Compare that with the art market. All paintings are simply pieces of paper with paint on them. The market determines value based on a variety of factors. But fundamentally, the underlying assets are worth almost nothing.

I fully agree with the magic bean part, but the market has determined that some beans are worth more than others (based on a variety of factors) and apart from that some (which I have demonstrated) are virtually as tangible as shares in profit-generating companies

hmmm

If you started up a blockchain related business tomorrow offering services to Irish companies, funded with a token-distribution, and started gaining revenue from providing those services. That token would have a tangible market value.

Name me one single company funded by ICO that is offering services to Irish companies and making a profit.

The token by the way has no value - it is not a share in the company. You might as well fund your company by selling cheap plastic trinkets in return for 50 quid notes, at least then you'd have a plastic trinket rather than a worthless crypto hash.

kaymin

grindle wrote: »

Personally I think it's overvalued right now as the way you should be thinking about it is more... How much is that industry worth per year? What kind of cap should this token have if it takes X% of that market's turnover? People are certainly pricing in with very forward speculation.

Many publishers contacted & added, many don't want to be named because Google would look at them...unfavourably.
"Over 150 publishers have joined Brave Payments. Wikihow, Archive.org, and Smashing Magazine have given us approval to use their names. Other large name publishers will be added."
Apart from the ones contacted and already approved ANY site that you decide to donate to will have those funds tagged for them - an incentive to use the system when there's already money waiting for you to claim.

Their revenue will be a percentage of the ad fee, so they have a reason to commit to making it a success.
You can ignore the crypto side of the business completely and use their Brave browser (mobile is best, desktop a bit buggy) for yourself. Great for ad-free browsing and you can completely disregard the valueless magic beans.

BAT's don't confer any interest in the company according to their website. So the value of the BAT is not related in any way to the business that you've described above.

'Ownership of the tokens carry no rights other than the right to use them as a means to obtain services on the BAT platform, and to enable usage of and interaction with the platform, if successfully completed and deployed. The tokens do not represent or confer any ownership right or stake, share or security or equivalent rights, or any right to receive future revenue shares, intellectual property rights or any other form of participation in or relating to the BAT platform, and/or Brave and its affiliates. The tokens are not refundable and are not intended to be a digital currency, security, commodity or any other kind of financial instrument.'

Sparks43

Pussyhands wrote: »

Looked at my portfolio earloer and was down 55%....surprised to see I've made like 20% of ky original investment back. DBC up 30% in the last day.

Great to hear. Hopefully you get the chance to pull a profit and leg it.

grindle

kaymin wrote: »

BAT's don't confer any interest in the company according to their website. So the value of the BAT is not related in any way to the business that you've described above.

'Ownership of the tokens carry no rights other than the right to use them as a means to obtain services on the BAT platform, and to enable usage of and interaction with the platform, if successfully completed and deployed. The tokens do not represent or confer any ownership right or stake, share or security or equivalent rights, or any right to receive future revenue shares, intellectual property rights or any other form of participation in or relating to the BAT platform, and/or Brave and its affiliates. The tokens are not refundable and are not intended to be a digital currency, security, commodity or any other kind of financial instrument.'

The BAT token isn't meant to be a dividend sharer beyond ad-fees paid to you for seeing whichever ads you've seen.
What do you think would happen if it reached anywhere near widespread adoption?
Bearing in mind that even a 5% share of the browser market would be huge.
Do you think the token price would stay the same or rise? Speculate.

hmmm

grindle wrote: »

What do you think would happen if it reached anywhere near widespread adoption?
Bearing in mind that even a 5% share of the browser market would be huge.
Do you think the token price would stay the same or rise? Speculate.

What would happen? Nothing. You don't own the company or have any stake in it. The token is a worthless crypto magic bean.

Autochange

EagererBeaver wrote: »

This is the type of arrogant attitude that pisses me off. To be interested in crypto you don't have to be convinced of its future success.

Personally, I'd much prefer to hear all opinions when it comes to something I invest in rather than just a shower of spanners shouting "moon" and "lambo" all the time. Wouldn't you?

I don't reply to those who shout moon , lambo or anything else like that. No arrogance on my part either.

kaymin

grindle wrote: »

The BAT token isn't meant to be a dividend sharer beyond ad-fees paid to you for seeing whichever ads you've seen.
What do you think would happen if it reached anywhere near widespread adoption?
Bearing in mind that even a 5% share of the browser market would be huge.
Do you think the token price would stay the same or rise? Speculate.

No idea. All I know is fyffes shares doubled overnight during the dotcom boom when they launched an online portal to buy / sell fruit around the world. I remember talk of huge valuations if they captured only 5% of the market. Ultimately it came to nothing. Not saying the same will happen here but....

Also, I doubt advertisers would be willing to pay much to an individual for seeing an ad. How much does a google ad cost per search result? Pennies at best i'd expect. And that's ignoring Google/Facebook's response to any attempt by these scrapers pushing into their space.

Dohnjoe

hmmm wrote: »

Name me one single company funded by ICO that is offering services to Irish companies and making a profit.

?

I clearly provided a hypothetical example to explain a point

I provided a real example earlier which I'll repeat if you didn't bother to read the post

There are currently startups and companies funded by token sales that will be gaining revenue (like a normal company) by selling blockchain services/products (for example VeChain)

The token by the way has no value - it is not a share in the company.

To re-explain.

A Coca-cola share is a "share" in a company. While on paper you do, realistically you don't "own" a part of the company. However it can entitle you to certain things such as having a vote or being entitled to a dividend. It's value generally derived from the performance of the company

A crypto token is very similar. You don't "own" a part of the company. You can be entitled to vote or receive dividends. It's value generally derived from the performance of the company



As already mentioned, a painting is a piece of paper with paint on it. How does the market decide that the worthless asset (paper + paint) is worth something? it assigns value to it based on a number of factors

The market uses the same principles to apply value to anything else that does not carry underlying intrinsic value. Like cryptos.

"It's just a piece of paper with paint on it"

"It's just a magic bean"

Crypto tokens that actually act like shares backing a revenue generating company are different

"A Coca-cola share"

"A VeChain digital token"

I believe some of these are worthless, others are part of speculative hype, others carry subjective market value (similar to paintings), and other's carry value similar to the way shares do

grindle

hmmm wrote: »

What would happen? Nothing. You don't own the company or have any stake in it. You own a worthless crypto token.

So you're telling me that if people want this token for their own use (including advertisers) and you're willing to sell it to them so that they can use it, you haven't gained a value?

kaymin wrote: »

No idea. All I know is fyffes shares doubled overnight during the dotcom boom when they launched an online portal to buy / sell fruit around the world. I remember talk of huge valuations if they captured only 5% of the market. Ultimately it came to nothing. Not saying the same will happen here but....

The same could definitely happen, no doubt.
But within this sphere are the next Googles, FBs, Amazon, the next Fortress Investments.
Whether they've arrived yet, we don't know. Maybe, maybe not.

Nobody is saying every crypto is well-priced. Most are VASTLY overpriced in comparison to their current utility. Some don't even have a product yet they're worth billions - truly insane.

WhiteMemento9

Lads why take the bait. It is the same every time we have a correction. Loads of people flood the forum with I told you so and then crawl back into the hole after the market recovers. I don't really care but it makes the threads unbearable to read. Let them blow a bit of hot air and sit on the sidelines while you count the money.

hmmm

Dohnjoe wrote: »

To re-explain.

A Coca-cola share is a "share" in a company. While on paper you do, realistically you don't "own" a part of the company.

Total bollox. Shareholders own Coca Cola. This is business 101. You buy a share, you own part of the company - the value of the company is the total shareholders equity, divided by the number of shares issued and whatever speculative element the market decides to attach based on potential future profitability.

Token owners do not own the company that issued the token.

It's value generally derived from the performance of the company

You own nothing other than a crypto hash. You have no share in the company. No matter how much you write to try and justify yourself, we keep coming back to this fundamental and very simple point.

You are being taken for a ride.

kaymin

Dohnjoe wrote: »

?

To re-explain.

A Coca-cola share is a "share" in a company. While on paper you do, realistically you don't "own" a part of the company. However it can entitle you to certain things such as having a vote or being entitled to a dividend. It's value generally derived from the performance of the company

A crypto token is very similar. You don't "own" a part of the company. You can be entitled to vote or receive dividends. It's value generally derived from the performance of the company

But this is incorrect - the one example provided to my request for a crypto that is backed by a cash / profit generating business was the BAT. But it turns out the BAT isn't a share in the business at all. It doesn't seem like many people around here know what they're investing in.

grindle

hmmm wrote: »

You own nothing other than a crypto hash. You have no share in the company. No matter how much you write to try and justify yourself, we keep coming back to this fundamental and very simple point.

Try not to be so obnoxious.
Fine. You own nothing more than a crypto hash. Now somebody who's using the product wants to buy that off of you. What happens? Liquidity. Price. Supply. Demand.

kaymin wrote: »

But this is incorrect - the one example provided to my request for a crypto that is backed by a cash / profit generating business was the BAT. But it turns out the BAT isn't a share in the business at all. It doesn't seem like many people around here know what they're investing in.

So obtuse. Read above.
I never said you were buying shares in BAT.