Talking about only one of the values ​​is called hooliganism. What is the value of the Bitcoin network?

Yesterday, there were two articles discussing the value of Bitcoin, which I found very interesting. One article was about Blockchain CEO Peter Smith and Lightspeed Venture Partners partner Jeremy Liew predicting that Bitcoin is likely to reach unforeseen heights in the next 10 years. They said:

“For Bitcoin to be worth $500,000 by 2030, the number of users would have to account for a quarter of China’s population (or 5% of the world’s population).”

Don’t get me wrong, they are not doing a charade of predicting the price of the currency, but making an assumption. The two investment tycoons believe that if the price of Bitcoin wants to reach $500,000 by 2030, the number of its users needs to reach about 350 million (a quarter of China’s total population).

I believe that this assumption uses Metcalfe's law, which means that the value of a network is proportional to the square of the number of users it connects.

Let's not comment on the correctness of this calculation method for now.

Let’s take a look at another article, “How Much Is Bitcoin Worth #F1000”, written by yevon_ou (also known as the real estate “Ou God”) from the Reservoir Forum. The author wrote a lot of words and finally concluded that the value of Bitcoin is overestimated 1,000 times .

When people in the cryptocurrency circle see this conclusion, they are probably very angry.

In fact, you don’t have to. If you look at the “Currency, Seigniorage and Bitcoin” written by “Ou Shen” at the end of December 2013, you will see that at that time “Ou Shen” evaluated that: the market value of Bitcoin should be 100,000 US dollars, which was overestimated 100,000 times, and the real value should be 0.03 yuan.

In just 40 months, the market value of Bitcoin has only doubled, but "Ou Shen"'s valuation of Bitcoin has increased by a full 100 times.

Let’s talk about “Ou Shen’s” theory of value. He said: currency value = scope of currency use = scope of gun control . The theory is “if half of the territory is lost, the purchasing power of the RMB will be lost by half.”

So I would like to ask, which one would have a greater impact on the purchasing power of the RMB: losing Tibet (474,300 mi²) or losing [Shanghai (2,448 mi²) + Beijing (6,336 mi²) + Zhejiang Province (39,305 mi²) + Guangdong Province (68,688 mi²)].

The theory of "Ou Shen" tells us that the impact of losing Tibet is huge... (￣ε(#￣)

Let me ask again, what is the ranking of the economic size of Russia, the country with the largest land area in the world?

The theory of "Ou Shen" tells us that it should be the first... In fact, it has already fallen out of the top eight in the world (￣ε(#￣)

You may feel that you have found the truth, but in reality you are still some distance away from Metcalfe's Law.

The relationship between value and price

Many people confuse value and price. In fact, these are two different concepts. What "Ou Shen" is talking about is the concept of value.

We can summarize the relationship between the two as follows: value is the basis of price, and price is the expression of value .

The peasant is talking nonsense here, and here is his own theory:

Value A + Value B + ... Value X = Final Market Price (Not applicable if there is a price but no market)

So, today we see that the price of Bitcoin is around 8,200 RMB, so how does its value perform?

"Ou Shen" said that the value of Bitcoin is overestimated 1,000 times, and he actually refers to the value of Bitcoin payments (of course, this valuation is not entirely accurate).

The question is, does Bitcoin only have payment value?

There are some die-hard Bitcoin fans who only hoard Bitcoin and never sell it. This is called storing value.

There are a large number of short-term traders who are constantly buying and selling Bitcoin. This is called speculative value.

There are many black applications (pornography, gambling, drugs, money laundering) that use Bitcoin, which is called decentralized value + anonymous value.

Especially those black values ​​have attracted the attention of major governments.

Trying to judge the overall value of Bitcoin by only talking about one of its values ​​is like trying to blind the readers with one leaf.

Rediscussing the relationship between network value and number of users

We know that Metcalfe's law applies to communication networks, while the Bitcoin network is a value network. Considering the different value of each node (user), we cannot simply apply this formula to calculate the value of the Bitcoin network.

For example, the number of Dogecoin users may be similar to that of Ethereum (or even exceed it), but in terms of market capitalization, we find that the gap between the two is still very large.

Forgive my ignorance, but here is a crude formula for calculating network value: V=K1×n1²+K2×n2²+…Kn×nn² ; (K is the value coefficient, N is the number of users.)

Of course, you are welcome to correct my mistakes.