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RE: The Value Chronicles Episode 10 – Glossary
The income stream gets discounted into the capital value of the token. You are buying coins at mining cost ($100) + profit today ($100), but tomorrow it could be mining cost ($100) + profit ($200). Think of buying a bitcoin as mining a coin at a different higher (currently) price than a miner. You could still apply the spreadsheet with assumptions to determine if the coin is likely undervalued.
Irrespective of whether you mine or buy a coin, you want to know its value. If you buy you can see it from the perspective of mining at different assumptions
Alright now I see your point more clearly, the mining cost is basically a floor price and the price that could be described as the absolute value of the coin. Any other price above that floor price is basically pure profit . Yeah I could definetly model tokens now that I see it from your angle. Thanks for taking the time to explain ! Do you work in finance ? You seem to be very well versed in this
I do, I basically work with cashflows model on a day to day basis. I also have a background in statistics
An investment banker ? Anyway its a great blog, its always good to have someone promoting financial principles; especially in crypto land.