Lets review some notes on valuation of crypto projects, using technical (network) valuation and community valuation.

The problem with predicting the movements of #cryptocurrencies or any other digital asset is that, since most of them do not generate future income (like stocks), it is not possible to calculate a long-term price or #LTV for them.

Valuation from the Network

However, using network effects as a valuation criterion, we can make some calculations. In theory, the more people own a token, the more valuable it is.

In the case of #Bitcoin, for #valuation it is possible to use:
– number of BTC nodes
– number of transactions
– transaction size and dispersion
– distribution of address balances

For this purpose #Metcalf’s valuation of #networks is useful.

“Metcalfe’s law states that the value of a telecommunications network is proportional to the square of the number of users connected to the system (n2).”

In the case of Bitcoin we can calculate an objective valuation based on the number of nodes in its network.

Valuation from the community

In this case its the #community that is the fundamental parameter.

In the case of #DigitalAssets such as cryptocurrencies it is the community of developers. And in the case of tokens it is the community of users.

Other elements used are:

– The White Paper
– The economics
– The team
– The project
– The potential

In any of the cases, in the end we are always talking about the ability to solve a problem in a scalable and non-replicable way thanks to the community behind the project.