All credits to: CHARLY FIGUEROA
In this article we will estimate a reasonable price for MIOTA, applying a very simple and conservative criterion . We begin
The proposed method is based on a comparison between IOTA and BITCOIN, therefore it is necessary to first estimate the future price of the BTC. For this we are going to compare the BTC with gold, since they are assets with very similar characteristics: both are considered a reserve of value (they are scarce) and can be used as money.
The total market capitalization of gold is 6.3 trillion dollars ( 1 trillion = 1,000,000,000,000 ), however to be conservative we are going to discount the value of all the existing gold in the form of jewelry that is around 50 % of said market capitalization. Therefore, we are only going to take into account the gold that is part of the financial market, which has a market capitalization of 3 trillion dollars .
The BTC has advantages over gold, since it is much faster and cheaper to move a BTC to any country in the world than an ounce of gold, it is also safer since all transactions are registered in the Blockchain, it also has its shortage Guaranteed (which in gold is not entirely true, can discover a large gold mine for example). However gold is one of the main assets hoarded in the reserves of Central Banks around the world and has gained confidence in the collective subconscious of most people.
What we are going to do then is take a conservative approach in which the BTC will reach 25% of the current market capitalization of gold. The maximum amount of BTC that will be created is 21 million, which will happen between the years 2030 and 2040 (a period of time that I consider reasonable for BTC to reach such market capitalization), then:
(US $ 3 trillion * 0.25) / 21 million = US $ 35714.3
Being very conservative we can expect BTC to reach a price of US $ 35714.3.
Now we are going to what interests us, to obtain the future price of MIOTA .
We start from the basis that the Tangle is superior to Blockchain . This is justified in the fact that the Tangle is scalable , so as more users are added the better the system works, instead in Blockchain the more people add up the worse it works, not to mention that the fees become higher ( for example, the current BTC fee is US $ 7 and the ETH fee is US $ 4.5) , while in IOTA the fee is always US $ 0 , no matter what happens.
The latter makes IOTA much more likely than any Blockchain cryptocurrency to be applied in large-scale uses in real life, which makes it a much less risky investment from that point of view .
The only exception to this is a cryptocurrency based on Blockchain designed to be applied at small levels, such as within a company or in small communities, in those cases the lack of scalability is not a problem since the number of users is small . A very good example of this is the FACTOM cryptocurrency.
As IOTA seeks to be applied in a massive way, I consider it correct to compare it with another currency that also has that objective, and what better than BITCOIN, the best known and most powerful cryptocurrency on the planet.
In the article “ Are you new to IOTA? Errors that you have to avoid “( http://www.iotahispano.com/2017/11/16/sos-nuevo-en-iota-errores-que-tenes-que-evitar/ ) we deduced that 100 MIOTA = 1 BTC , However, this equality was obtained from an approximation in order to simplify the calculations.
What we are going to do now is to be more precise and to use the true relationship between MIOTA and BITCOIN. The maximum amount of BITCOIN to be created is 21,000,000 and the maximum amount of MIOTA is 2,779,530,283 (all were created), then we do the following:
2,779,530,283 MIOTA / 21,000,000 BTC = 132.4 MIOTA / BTC
Or what is the same:
132.4 MIOTA = 1 BTC
As we said, the BTC can reach a price of US $ 35714.3, so we do the following:
(35714.3 US $ / BTC) / (132.4 MIOTA / BTC) = 269.7 US $ / MIOTA
Since Tangle is superior to Blockchain, it seems reasonable to say that the price of MIOTA should exceed US $ 269.7. However, it must be taken into account that BTC has the advantage of being considered a reserve of value, in addition to the fact that the BITCOIN brand is very strong all over the world, while IOTA is just beginning to become known.
What we can do then is apply a very conservative approach. Therefore, we are going to estimate that a MIOTA will reach 10% of US $ 269.7, which gives us a target price of US $ 26.97.
As a final clarification, I must remember that setting a target price is something very complicated and even questionable in the world of cryptocurrencies. It is a very new market and still need to develop more theoretical models to have greater security in estimating a future price.
The weakness of the proposed method is that it is based on a comparison with the price of BTC and gold , that is to say that the accuracy of this prediction depends on the behavior that two other assets will have in the future . That is why it was decided to take a VERY conservative approach , seeking to compensate the aforementioned. If someone wants to take a more aggressive criterion, that is, consider% greater, he is free to do so, but he should know that he is having a more limited margin of security and therefore a higher level of risk.
– OBJECTIVE PRICE OF THE MIOTA: US $ 26.97
– ESTIMATED GAIN:
(Estimated price / Current price) x 100% =
(26.97 / 4.44) x 100% = 607.4%
- Market capitalization of gold (where it says billions should be read as trillions, since the note is original from the US and in that country have a different numerical scale):
- Year in which all BTCs will be created :
– DISCLAIMER: the present text is not an investment recommendation, it was written for merely informative purposes, each individual must be responsible for their own investment decisions.