They are actually, in a more fluid market, one and the same !!!
Sure there may be companies that are “under” or “over” valued to the extent that information about their fundamentals and the value of their speculative growth/risk is unseen by the public.
You could say that market cap //=// value for a lot of companies on the “Dow Jones” … but you are splitting hairs there … in the crypto world , we just haven’t reached a real market yet . When Ada becomes fungible and marketable it’s present value will begin to approach it’s market cap in a real way
A venture or company’s value is normally defined Price x Units
Unless you are wanting to get in to the nitty gritty of “enterprise value” and include debt + equity
At the same time , “cryptomarket cap” and the “enterprise value” of Ada are not transparent or useful at the moment
For a moment forget about blockchain and decentralisation. Say a conventional publicly traded company decided for whatever reason to issue their own currency. Seems to me there would be no necessary relationship between the “market cap” of the currency, and that of the shares. (I know very little about such things but I’d guess the market cap of the currency might be considered part of the company’s working capital.)
At this stage in the evolution of crypto we express our belief in a project by buying the associated currency so market cap is related to the perceived value of the project, but only quite loosely. It seems to me that, for any crypto that does NOT remain primarily a store of value, the price will become more and more closely related to the uses as these grow, and less and less related to the perceived value of the project as a whole.
Great excellent points. I agree substantially in the with the latter half of your analysis !
On the former though , are we not indeed owning shares of cardano by owning Ada?
Consider the company that owns an online game … the company’s stock / market cap value is considered the value of the game and maker. Then there is a currency inside the game , suddenly it is for sale on eBay , and it acquires it’s own “market value” … in this case , who really owns this coin ? We know its calculated market cap is wrong, because it is dependent on marginal demand , and , truly , all of the currency is “controlled” by the parent company , even though one may claim temporary exchange rights on eBay or whatever market.
So is cardano Activision or “WOW gold”?
I think it has attributes of each on it’s trading markets, and part of how “cryptomarket cap” webpage is flawed …
But, wouldn’t you be more inclined to agree owning Ada is owning a share in the cardano ecosystem? Like a stock ? When you buy Ada , do you gain ownership and control over it ? (After full rollout) … if you are a trader in Warcraft gold or USD , you are always at risk of the “truest owner” seizing/‘sleazing’ your funds. If you own alphabet or Microsoft, on the other hand, you arguably retain all the rights and property you purchased.
I am hoping cardano is working on distributing ownership and voting rights … and I believe they are !
Soon after posting that I realised it was oversimplified, even missing out some important crypto features altogether, and when we consider Cardano staking and governance model… well maybe you’re right.
Shares are very specific type of property holding, representing an ownership of a company and in most cases a vote on important decisions. It also has properties such as divident payouts. https://www.investopedia.com/terms/s/shares.asp
Crypto’s are in general NOT shares. Even coins that use a Proof of Stake type of consensus and pay out/mine/generate a divident type of gain, are not shares. One example where a token could represent a share is for example Dash, where ownership of 1000 Dash allows for the set-up of a Masternode and a vote on proposals. Or Ark, where you can vote on a delegate with your coins for a certain approach. Neo tokens generate Gas and allow a vote as well, but the intricacies of these are beyond me.
I’m not an expert (far from it) on asset class definitions and particularities. I would just be careful to assign asset properties of existing assets to crypto’s
I agree it’s insane to try to classify their asset nature so to speak .
But, I think while the commodity definition may fit some coins semi accurately, I would never put my money in a commodity , because by definition of the asset class, a commodity has no future revenue stream to the investor.
Cardano has a guaranteed revenue stream (like a bond) at first … and its mission, like ethereum, is to explore and enable value propositions… I would call that “seeking an ROI” … (like a stock?)
I am a commodities averse investor, because I believe over the long long run , they don’t deliver expanding continuous value to the owner. But here I am in Ada … maybe I will just take the staking interest and then leave, if cardano is “fake” … … I do plan to put some money in alphabet and agi coin too (a synergistic pair) , in my next rebalancing …
Maybe Ada is just a commodity ?? I would like to hear other opinions.
Ada in one sense is most certainly is a commodity to pay for the “infrastructure as a service” which is cardano. Since it is digital it could also operate in various other ways as well i.e. eCash , stable coin, etc who knows at this point what it evolves into.
I think it will be partly a commodity all the way through to the point when we could be said to be purely , or post blockchain-revolution , when it will really not have any growth or speculative value , and will then be “only” a commodity , and we would turn future ROI plays into new ventures …
But I would still maintain that for now , and into the mid term futures it’s value by enabling x, being y, and doing z, will be a growth on investment goal, more like a security , but still with commodity like properties.
Let us hope indeed. But, if money coming to you as the result of distribution of value is really yours , it is only just and ethical that you pay the politically agreed upon tax for that .
… until the time comes to renounce citizenship and move on to a more (cardano-like) free polity
I used to believe the consumption tax was the best, too, but after years of research and formal economics training, I’ve realized that this is not true. In reality, a consumption tax is deflationary and not the most economically efficient form of taxation for many reasons. This is why every prominent economist across the ideological spectrum from David Ricardo, Henry George, J.S. Mill, J.M. Keynes, Milton Friedman, Paul Krugman and many others have said that a pure land tax is the only truly just, economically and logistically efficient, and sustainable form of government “revenue.”
No Political Economy education is complete without reading Henry George’s Progress and Poverty. Nobody since Adam Smith has contributed more original thought and substance to the field of Political Economy than Henry George. If more people read and understood that book, we wouldn’t have so much poverty, political corruption, and economic dysfunction in our world today.
In 2014 the IRS deemed crypto to be property instead of a true currency. This means that they will charge a sales tax on buying it + capital gains tax (if owned for over a year, if not then it is taxed as normal income (should income be made from the coin)).
Interesting. What do you think that means in the case of “dividends” from staking? I guess it would be only a taxable event when you sold similar to dividends in stocks.
I’m not a tax advisor but that’s what i would assume @saline09 … Because how would the IRS know unless you either A. told them or B. cashed out, making a paper trail… Even if there is a law on the books it would be unenforceable at this point, just imagine trying to track every crypto wallet in the USA; assuming they could even tell that the wallet belongs to a US citizen…
One would think … if the dividend is just a gift of more shares but you don’t realize financial gain by converting … Then it would be subjected to the capital gains rate ? Isn’t there also a special dividend tax rate that is called a qualified dividend (for hodlers?). I haven’t invested outside a Roth , so I can’t say I have any experience
Don’t go around volunteering a bunch of information to see how smart you are at navigating an imaginary maze which the authorities themselves don’t even know exists yet.
Hello guys
I do appreciate all of your thoughts and that’s was so great when I dive in the space and I find thounds of peoples shared that with me ,
Guys this is something even not started yet the whole thing like whispering about the future , all what we need to know how we can pick the safe way because it’s just dark ,
What I believe these smart team they bring the future and planned very well to get there
Look at there points regulation, difficulties, scalability and so on , when you just have chance to look at they talk it’s just different guys Just the scalability it’s a much much big deal even higher than BITCOIN look just at BTC difficulties every one feel and experience that in this satuation for example ADA ths opposite as much it’s increased as muchas the transactions getting faster,
I don’t want to write more but I want to keep in mind ADA belong to the real future of cryptocurrencies and I know i will keep on mind all the time CARDANO my Ultimate coin simple because I see the future light through them they trying to solve the current problems and expecting the future and getting ready for it by sharing the ideas of smart people of all over the world
Thanks guys all the best
Ever feel the need to retract a statement? I had no business speculating on the future price of ADA as I really have no experience in analyzing such things, and although I will not attempt to move this post from the thread I will be retracting the above that I have quoted. (I do not know what I was thinking)
Nobody knows the future of anything crypto so your speculation is as good (or bad) as anyone else’s. The views of even the supposed experts in any field of endeavor vary wildly and often it is the outlier that turns out correct.
