[nostrademons]

Adoption and projects using it. Like any currency, ETH becomes more valuable when you can spend it on more things. It's the base currency for a whole infrastructure of distributed trust & settlement; if useful economic activity occurs on top of that infrastructure, ETH gains in value proportionally.

[elhudy]

Ok, but the whole idea behind fundamental analysis is that you generate a specific value of worth based on your analysis. So what formula are you using to calculate a price point for Eth based on "adoption and projects using it"? Are you tracking all projects using it, and assigning it a dollar value based on a per project usage and cross-checking that against the number of ways you can use it? Or are you just guessing? Because if you're just guessing, that's not a fundamental analysis.

[nostrademons]

I actually am, to most of those points. I'm indexing every forum & blog on the web, then cross-referencing it with a big long list of crypto projects, then using that to infer which projects have an active, involved, growing community and which are scams or dead. Sentiment, activity, and viral mentions aren't a perfect proxy for adoption, but it's pretty close, and a lot more robust data source than technical analysis or previous prices, which by their nature will always be a lagging indicator.

Still in closed beta with a very limited set of testers - I've been working on a lot of the kinks in the data acquisition, which as you could imagine is a little tricky. If you want to get on the wait list, signup is here:

http://www.cryptolazza.com/

[JoachimSchipper]

That is very interesting, but it does sound like you’re measuring engagement (or, less charitably, the effectiveness of the self-organizing distributed boiler room of patio11 fame) rather than, say, assets and earnings.

I’d call the latter “fundamentals”, if only because I don’t see why engagement would provide a price floor at e.g. 1000 $/BTC rather than at 10k $/BTC or 100 $/BTC?

[tim333]

While engagement as in just tweeting doesn't provide a price you can do an estimate by (number of fans) x (amount they'd like to have invested) / (number of coins) = (estimated price)

eg 20 million BTC investors want to have $10k in BTC, 20 mil coins available => the price should be $10k

obviously some guess work in there

[elhudy]

That's fair; props on all of the effort you've put into that! I'd imagine one of the toughest challenges is subtracting the volatile "layman demand" and gamblers to get to that fundamental value derived from actual users.

[nostrademons]

The nice thing about indexing the whole web is that you also have a complete per-author picture of everything they've written. Shills often post the exact same message on many different sites, or talk exclusively about one project and nothing else. Gamblers & laymen tend to pop up abruptly when a project gets hot, and then quickly either disappear or move on to the next hot thing. When a veteran user with a reputation for detailed, often-quoted posts starts talking about a particular project, though, and keeps talking about it, usually there's something real there.

[blackstrips]

What are the chances those projects will generate income and pay for ETH?

Can those projects work without a blockchain? Would it be cheaper to just handle stuff with (digital) signatures and old fashion contracts?

[nostrademons]

My investing thesis for crypto is this:

The cryptocurrency projects that will survive and thrive will be those that let people do things that are insane, and yet they want to do anyway. It'll be new markets where currently no economic activity is taking place, because the participants cannot trust each other (or make use of the legal system to trust each other) enough for any rational actor to consider transacting. Cryptocurrencies, of course, alter that rational calculus by letting you put trust in an anonymous network of worldwide miners to secure your transactions.

Think of some of the biggest companies created in Web 2.0. Facebook - who in their right mind would give Mark Zuckerburg all of their personal data so they could hook up with that hot girl in the dorm across campus? AirBnB - people actually invite strangers into their homes to stay with them? Even the founder and first investor call that "The worst idea that actually worked." Uber - you're going to get in a car with a complete stranger and pay them to drive you places?

(Interestingly, all of these are markets that are well-positioned to be disrupted by cryptocurrencies. The key elements of an EBay/AirBnB/Uber-type marketplace are 1.) ability to connect latent demand for a service with people who can supply that demand 2.) ability to receive payment and 3.) a reputation system to ensure that the service was performed reliably. Right now, the UI & scalability properties of crypto are not good enough to let them replace these centralized marketplaces, but all of the information involved could easily be stored on a blockchain rather than a database, and with current Ethereum transaction costs at 0.07c and most of these tech companies taking a 20% cut, at some point the economic incentives to replicate them will become huge.)

We've actually had a couple of these killer apps for cryptocurrencies - buying drugs off the Internet, and ICOs. In both cases, any normal, rational person looking at the behavior is going to be like "What? Are you crazy?" In both cases, people do it anyway, presumably because they really really want to buy drugs without having to meet in person, and because they really really want to invest in startups but otherwise can't.

If you can service a market with databases, digital signatures, and old fashion contracts, you should service it that way. Blockchain is useless for anything that people are doing now, because if they're doing it now, there's already a way to accomplish it.

[tim333]

Not sure I buy the insane bit. Airbnb, Facebook, Uber, drugs on the net and ICOs were proceeded by traditional B&Bs[0], showing holiday snaps, taxis, traditional drug dealing and traditional iffy investments. It's just new tech either did things better or allowed skirting of regulations, licences and the like.

I think there may be a future in security token offerings, a more regulated less scammy version of ICOs, kind of like traditional stock listings but cheaper and less Sarbanes–Oxleyed.

[0] https://www.streetdirectory.com/travel_guide/212726/travel_a...

[wmeredith]

Sounds like you’ve invented coinrank. I dig it.