I'm wondering if current prices are high or low. Most people I talk try to explain to me how the price chart looks like (just like at the other bubbles, right?)...

Is there any means how we can do more of fundamental valuation (just like for a stock) for Bitcoin? I'm not too much into chart analysis, I want to get a feeling of the real fundamental value.

The only information I found on that the BofA thing that is much talked about: http://www.forbes.com/fdc/welcome_mjx.shtml

Frankly, this doesn't seem to be a very well thought-through fundamental valuation.

Also, I've seen this: http://bitcoin-valuation.org/fair-value-bitcoin-28823/

I would be interested in opinions if these sources are OK to be considered, and I'm also interested what other factors there are to consider.

Thanks in advance for your help!

  • Any more views on this? Any opinion / explanation / feedback appreciated! Dec 21 '13 at 22:03

Recognizing that Bitcoin has no INTRINSIC value, we look for its USE value, so to speak. The primary value of BItcoin is the reliable and indefeasible transfer of property title (money) between two users. Ever since the first use of the Nakamoto protocol in Jan 2009, there has been a proof-of-concept that has remained valid for almost five years and continues to function through extreme volume and market volatility.

This proven ability for reliable performance is the principal value of Bitcoin. Were it to be compromised, or made to fail massively, the value of a bitcoin would collapse, until it could be repaired, or perhaps to never recover.

Other subordinate values-in-use can be analyzed in like manner, but as long as this primary value is intact, the price of bitcoin will continue to rise as it will continue to be useful, and thus valued for its use.

  • Thanks, David. That's valuable information. To complete the answer to my question, I would love to get some views from people on how to quantify the fair value of Bitcoin at a given point in time. What would be the "formula" to calculate it? Though it's clear that it cannot be 100% covered by some formula because it's judgement, my question is what are the input parameters and how would they influence the value of Bitcoin. In what respect are the two sources I mentioned in my question right and in what respect wrong? Dec 17 '13 at 6:09

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