What makes you an investor?
Did IOHK or anyone receive funds from your “investment”?
Did you read any investment policy,
Terms & Agreement?
We are speculators, buying utility cheaper now with the aim of selling it higher after certain time.
We are like Guys who buy 1 GByte data prepaid upload card for 10 USD because we believe it will be sold for 20 USD in the future. Does this make us investors of the Telecom infrastructure & in the Telecom company? Hardly.
For you an investor is defined by:
Is that correct?
Perhaps you should view this recent video by IOHK:
Then tell me again what makes one an investor.
Your statement doesn’t make any sense and altogether false… While I was geographically excluded from participating in the ICO, my current ADA holdings contribute to the present and future valuation of ADA. Furthermore, 25% of my future staking rewards will be set aside for the governance, growth and sustainability of Cardano ecosystem. I think these are classic and accurate qualities of an “investor” in a project.
I respectfully disagree, being an investor is about so much more than owning tokens bought in an ICO. For example i know numerous people on this forum who have invested a very large chunck of their time and energy into growing the community and setting up meetups etc.
Investing time which is an arguable more precious resource than ADA tokens shouldn’t be compared to speculating. I want to add that the motivations of those people are a long shot from speculating in the market, even though it is the hard work they put in that makes speculative behaviour by others possible to some extent.
The video was linked just to understand or to have different perspective of the current systems which are a kind of mix of the Keynesian economics and monetarism e.g. governments try to manage economic growth with spending and central banks try the same with printing money and set interest rates.
The Cryptocurrencies are very different.
Yes, a static sytem. with controlled supply that has a deflation nature, which is non sustainable either (check Japan).
They’re bootstrapping it /w inflation i.e. supplying money (until the cap is reached) to secure the system (economic incentives to stake i.e. reward system).
Tax is very important part of the crptocurrency systems as nothing free, for example there is taxation in Cardano already, the transaction fees which will be the only constant source of the system (secure the system and/or Treasury) after some time.
No.
What I am saying that when you are buying tokens you are not really addig value to the project, ecosystem or either to IOHK unless you do this at the ICO stage. Just buying ADA at some price level doesn’t really influence the long term valuation, I would personally not consider buying-in to be a value and make you an investor.
When you start to transact or use your tokens for anything then you start to add value. And once the debit card is out I would highly advise everyone to apply and start using it on a daily basis.
Staking is a better question. You definitely contribute to the core infrastructure of Cardano, on the other side you increase the passive ADA volume being locked up. I do have this issue with the Proof-of-Steak protocol that it encourages you to passively lock up your ADA. On the other side hopefully staking rewards will be low enough to encourage you to use your ADA in other context, such as moving it into microloan DAPPs.
An investor to me is who gives once or multiple times over a period of time some sort of value (whether monetary or other it doesn’t matter) to the venture in exchange of future benefits expected with certain risk level.
So according to my understanding you should go beyond buying a token and sitting on it for years with the hope of selling off at some point. This I see as a speculator.
That’s correct.
Sincerely, I was always looking for people who wondered about the current economy, and the fraud that we live in the society created by the banks. I am very happy that some people have the idea of the path that we will follow in the future, ADA only simplifies what we already know, the only option that is viable, is that they have a taxation so that they do not become a FIAT money anymore. Thank you for your interesting discussions that make me discover that we are not all here by chance, but we believe in something that makes a lot of sense that it is the “world economy” failure and I think that in the next 20 years these failures will be more visible in the society. As our partner said the economy is very simple, the problem is the framework created by society due to the complication of banks and governments to try to maintain a system that unfortunately will not work for not having a “value” greater than his words . They bet against us now is the time we should bet against them, with the argument that they have something that will have no value in our future society, capital will change ownership, more precisely it will not have an owner like other things created for the nature that makes us survive and always have their value. The Cardano project understood this very well, and in my opinion the people who understand this idea and share it in the forum help that the Cardano Project.
Sorry, a few typos. This is not my profession, I’ve been studying the different financial systems since the 2008 disaster, which was disheartening to say the least.
I do enjoy the dialogue.
I will be honest, the over all system that Cardano seems to be creating appears to address flaws in the existing systems by taking a heuristic approach. We are using someone’s untested theory which gained prominence with decision-makers, (who should have known better) this is our inheritance.
It’s about time someone does this without a personal motivation that’s out of proportion to the overall good.
But, it’s the overall protocol that will service the world that I’m interested in, that is self-sustaining, and I see ADA as the asset representation, which is expendable. There are some missing pieces for me that I haven’t figured out. The Cardano protocol is a product that everyone should be on and want to use. The world is the consumer.
Money is simply an idea backed by confidence. I think Cardano is creating this. It’s not done yet. It’s hard for me to think about the separation of the currency from the protocol, the product. I have not settled this for myself yet.
Namely, I don’t think that ADA could be a valuable stable token, as I only see the value of Cardano/ADA going up. What I could see (and Charles mentioned just the idea of a stable coin as a distinct entity) if the project decided that the existing stable of pegged tokens out to be flawed fundamentally, by virtue of being linked to a sinking ship (I.e. any fiat mostly). Then, as the value of Cardano matured worldwide, which I think is inevitable, then I think that somehow (and I’m not sure how exactly) that the value of the Cardano project could be tied to the protocol itself in some fashion. Maybe there is a better idea than this.
I see dollar pegs as a short term stability play, but when the dollar tanks, then every thing attached goes down with it.
I appreciate the different viewpoints here. I think a non-technical presentation (which was suggested earlier) is a wise and needed bridge to common non-technical people.
I really enjoy Charles ‘s command of all these elements. But most people are not as literate, educated and informed (myself included) as people in his circle.
A video that diagrams the overall situation being addressed, (and Cardano ‘s solution) done in layman’s term (explain the big technological words ) as you lose peple’s Comprehension with each word they don’t understand. This is a vital bridge to gap to ‘reach’ every single person.
This will accelerate mass adoption (and education is something that I do know about, and it’s barriers).
Thanks for the exchange. It’s helpful
Ken
Hi Ken,
I didn´t sleep yesterday, so this might be totally wrong, but will still try to follow your thought process 
There will be all sorts of stable tokens spreading over the Cardano Blockchain, even existing ones and future ones. BTC will also come to the Cardano Blockchain. It´s all possible via the sidechains capability.
ADA will remain the fuel for the infrastructure mainly for staking & transaction costs.
As the Cardano Ecosystem is gaining adoption and the frequency of transactions will start to rise it will go on a strong delflationary path.
On a Web 2.0 analogy think about it as ADA will be the token, which you use to pay for Internet Data, while all other Tokens will be on top of it the various Internet Applications you might be paying for today (such as Netflix Online, eBanking, Dating App, Job Search App, eCommerce, etc.).
Cardano will defacto be like a global Telecom company today, providing you the very essential infrastructure to the Internet (well eventually to the Web 3.0 secure value network), while you will have all sorts of DAPPs using their own Token, Stable Tokens to provide a set of use cases and value proposition. For many DAPPs ADA will be also a sufficient solution, where the inflationary nature of the Token is not an issue.
Now imagine if today there was no Internet, and there would be a startup company with limited number of tokens, which will give you access to the Internet. Today there is approx. 600b USD per year revenue for the global internet service providers from selling data, which is still increasing (and will keep doing so with IoT & 5G on the horizon).
We should assume that the value networks, value flows on top of a Blockchain Infrastructure / Web 3.0 will be able to pay off at least as much infrastructure costs as the Web 2.0 Apps are doing. Eventually because you might have all the various types of assets, financial instruments in the World digitalized and all the value moving here it should be significantly more.
Nevertheless if you have a demand for 600b USD of ADA Tokens on a yearly basis, thats a demand (not price!) of almost 25 USD per ADA token per year. It´s more complex to calculate what this would mean for the price perspective, as this is a demand per year KPI and not everything would be in circullation / no 100% liquidity (due to staking and other reasons). We could maybe calculate with a 20 years lifespan of the Cardano Blockchain (Charles was mentioning 50 years though). But you can get an idea what to expect if everything goes according to the plan…
Add to this the demand on ADA which would not come from Web 3.0 infrastructure but other use of the token, such as value store, currency & value / utility token in DAPP apps.
Obviously there will be lot of other “Internets”, Blockchain infrastructures, where certain Use Cases will find different parameters to be much more adventegous & beneficiary to rely on so not everything will fit the Cardano Ecosystem. So the deman will be possibly less. Who knows
Still looking at Cardano as having the potential to become one of the leading Web 3.0 infrastructure providers, this is very attractive proposition.
I believe in the end there will be maybe max. 10 various public Blockchains, cryptocurrencies who provide general Web 3.0 infrastructure access. Well maybe even less. We should have approx. as many as leading infrastructure services (IaaS) cloud providers we have. There are a few global ones (AWS, Azure, Google, …) and couple of local ones on a country basis. I would estimate that Cardano would capture at least 10-20% of the global market.
So you could weight my previous calculation with this, but it doesn’t really make sense as the size of this market is still hard to estimate, that was an analogy and I believe it’s much bigger.
What you think? Does this sound logical?
Cheers
When one exchanges any value, in this case, fiat, they are adding value to Cardano’s ecosystem. The exchange of value has no time constraints, be it at the ICO stage or today, the fact that the Cardano entities, IOHK, Cardano Foundation, and EMERGO do not instantly get to convert our value is not a measure of worth except yours.
To all Cardano holders, when you exchange one from of value for Cardano Ada you are adding your value into Cardano’s ecosystem.
Don’t let anyone tell you otherwise, think it through, prove what I have stated for yourself, or don’t.
Transactions are but one form of value, not the only one. It seems you are referring to the “velocity of money” which is a measurement of circulation, in this case, Ada, which is a gauge, but again not the only measure, of value in Cardano’s ecosystems.
In reading this post value has been transferred, in viewing IOHK videos value has been traded, measurements do not contain our values.
Everyone is contributing by staking their Ada, by valuing Cardano’s PoS protocol action is needed, an action is not inaction, bound value, Cardano is not building idle vaults at a bank, they are enabling true decentralization without consuming 10,000 MW in the process.
When an Ada holder stakes they add value.
Now you are referencing the exchange of value outside of Cardano’s ecosystem again, by keeping the rewards low you believe that will encourage me to do what exactly? To not convert Ada to another form of value that I or anyone else deems appropriate is very presumptuous.
Read my points though, if your understanding remains the same then you have not understood what I am conveying, measuring value does not contain it.
PS
This post is titled, Funding: beyond 2020 if the price stays low. Your posts in this thread are off topic, start a new thread targeting one of your points, as all that is happening now is mudding the waters.
While offtopic its a damn interesting discussion. The locking up off ada during staking for me is a net positive temporary value because it creates a temporary limit on supply. The real interesting part of it (for me anyways) is if its really temporary if users are incentivized to keep staking and how this affects market dynamics. I think you will find (hypothesis) a slighly higher equilibrium between interest from staking vs value created and incentivizing users to sell ada to realize this temporary value increase. This assumes there is enough demand that the supply limit matters. I should add the fundamental value is as Jotun points out enabeling decentralization in an efficient way. For me it is interesting because I tought initially it would reduce transactions (velocity of money) but the more I think on it I am not so sure.
Ok, let’s stay off-topic, in Cardano’s PoS papers, perfect alignment of incentives happens when 80% of Ada staked is staked in pools, supporting the protocol; this speaks well to your points.
The velocity of Ada will need to separate out the staked Ada from the not staked to get closer to meaningful metrics.
I second that; taxation for holding reserves in ADA will destroy its “store of value” property.
Taxes go completely against the philosophy of “alignment of incentives”
In normal business operations new projects are not mandatory regardless of budget. When the budget shrinks projects get shelved.
So if price of ADA remains low past 2020, we will see less ambitious projects funded by the network. Scrutiny and vetting of project proposals will be much tighter and very few projects will make it through the process. That is business as usual.
What will matter really is how much public infrastructure will start utilizing the public block chains of Cardano.
Thank you. It is such a good research article and how well they use game theory… Ok I will not derail the discussion further.
Forget about taxing ADA Hodlers! The ecosystem should fund itself and should create so much wealth that keeps the project evolving and stay a step ahead of any other project. Besides I don’t believe that ADA will remain so low [ hope not ]. If it stays so low that means it has failed which I’m sure it won’t fail. ADA will rise at the right time. You will see that ADA will rise in value once staking starts. Forget taxing ADA hodlers!
To some extent the treasury model in which a small percentage of the total staking rewards goes to the treasury is like a tax at source already.
So, as long as there are staking rewards there will be a constant stream of revenue allocated to the treasury. There’s no point in taxes after that. How much buying power that allocation will have depends on the price of ADA in terms of FIAT money. There should be no effort to empower the treasury beyond that to enhance its buying power.
It will not. If by taking taxes, investing them smart back in the Ecosystem you further induce the delfationary nature of the cryptocurrency so the price raises enough, then you don´t. The value of your ADA holdings can raise even when the amount of ADA you hold is constantly decreased through taxation.
It´s all about the right balance of taxation, smart decisions on investments and quality delivey of any item in the Ecosystem.
You deviated a bit away from the root of our agrument being the speculator vs. investor comparsion. We can discuss the deviations in a spin off topic as you suggested if you like, please feel free to create it.
Let me put it again, if someone buys ADA today and comes back 3 years from now to sell his ADA holdings, he didn´t add value to the Ecosystem no matter how you try to explain that, this person is a speculator and not an investor.
If he tends to stake all or part of his ADA during this period as I wrote it´s a different question, though the value provided is still limited and highly depends on the size of his ADA holdings.
However if he “also” develops a micro-loan DAPP for Cardano in the meantime and puts it live and it gets sufficient traction, then he should be seen as an investor.
The worst thing that could eventually happen is to have the majority of the ADA holders follow this behavior pattern of staking everything and going away for years.
I hope we will have nice DAPPs where you will be able to regularly use your ADA and also the ADA Debit Card will come around. Once you engage with these you become an investor again.
I don´t think our opinion is that much different, I would just personally be much more demanding with a Cardano “investor” title someone wants to put next to his name depending on the value he brings to the Ecosystem. If you call everyone who holds ADA as an investor without further differentiation regarding their contribution to the Ecosystem, this doesn´t meet the standards I would set.
My problem with so called “investors” are that they tend to set common investor expectations & claims towards the Cardano venture, which doesn’t really apply in this cryptocurrency context. Anway this is another topic
I don’t know man; you can debate all year long but let give you a heads up - if you take this to general referendum in the community you will see very lopsided results - you will see a resounding no to this.
You probably completely ignoring opportunity cost of capital.