Satoshi Nakamoto (in the chung) on October 31, 2008 issued a white paper currency, on January 3, 2009, created the currency block creation, and in January 8, 2009 issued currency code, and began a journey, created a market capitalisation of $70 billion, now the currency (BTC) market,
The currency is the world's first scarce cannot copy of digital objects, it like silver and gold are scarce, can through the Internet, radio, satellite, etc to send,
"As a thought experiment, imagine a kind of base metals like gold scarce but has the following characteristics: dark grey and white, is not a good electrical conductor, not particularly hard [...]. For any actual or ornamental have no practical value.. And a special, magical property: can be by communication channels "- Nakamoto
Of course, this number is scarcity value, but how much value? In this article, I use the inventory - flow to quantify scarcity, and use the inventory - flow model to establish the value of the currency,
2. The scarcity and inventory flow -
Dictionary usually scarcity is defined as "a condition of not easy to find or get something for nothing", and "lack of something," Nick complained of scarcity has a more useful definition: "unforgeable cost", "antique, time and gold have in common? Because the original cost or the impossibility of history, their cost is very high, and difficult to forge this cost, [...] There are some problems in the process of implementation on a computer is hard to forge the cost, if you can overcome these problems, we can get a little bit of money, "complained the" precious metals and collection due to its high cost and has the unforgeable scarcity, that used to provide the value of money, the value to a great extent, independent of any trusted third party, [...] [but] you can't use metal online payment, therefore, if a deal can create online unforgeable expensive bits, depend on the minimum of the trusted third party, and then stored safely, in a similar minimum trust transfer and analysis, it will be very good, it is a bit gold, "- complained
COINS have hard to forge the cost, because the production of the new currency takes a lot of power, producing COINS (dig) are difficult to counterfeit, please note that this with legal tender and not counterfeit currency supply limit, those out of work (fiat or counterfeit currency) prove (PoW), with low hash value, or a small group of people or companies can easily affect supply, etc.,
Saifedean Ammous talked about the inventory - flow (SF) proportion of scarcity, he explains why the gold and currency, unlike copper zinc nickel silver and other consumer goods, because they have high SF (inventory - traffic),
"For any consumer goods [...] , production doubled can make any existing inventories, prices tumbling and holder, for the gold, lead to double the prices will be insignificant, inventories increased by 3% instead of 1.5%, "
"This is the last low rate of gold supply is its keeping the currency role in the whole human history, the root causes of" "gold high inventory flow than make the lowest supply price elasticity of goods," "existing in 2017 COINS inventory 25 times greater than in 2017, production of new COINS left and right sides, this is still less than half of the golden ratio, but around 2022, the currency of the inventory flow rate will be more than gold" - Aousous
Therefore, SF can quantify scarcity,
SF,
=inventory/flowInventory is the size of the existing inventory or reserves, the flow is the annual output, people also use supply growth rate (flow/inventory) instead of SF, and pay attention to SF,=1/supply growth,
Let's take a look at some SF data,
Gold has the highest SF62, 62 production is needed to get the current gold stocks, silver ranked second in the SF, 22, this high SF, make them money commodity,
Palladium and platinum and all other goods of SF, only a little more than 1, the existing inventory usually equal to or lower than the annual output, which makes the production become a very important factor, is almost impossible to get higher rates of SF, because once someone hoard them, prices, production increase, prices fell again, is very difficult to escape from this trap,
COINS currently has 17.5 million COINS inventory and 700000 annual supply, the SF is 25. This makes the currency monetary categories, such as silver and gold, the currency's current market value of $70 billion,
Currency supply is fixed, can produce new COINS in each new piece, when the miners found that satisfy a hash value can satisfy the requirement of PoW to effectively block, every 10 minutes (on average) creates a new blocks, each block of the first transaction, called coinbase, contains find miners reward, rewards include people for the the block in the trading and paying new COINS (called), subsidies from the beginning of the 50 COINS, per 210000 yuan (about 4 years) cut in half, and that is why "half" is very important for the currency monetary supply and SF, half also supply growth (in the context of the currency is often referred to as "monetary inflation) step by step and not smooth,
3. Inventory - flow and value
This hypothesis is that, in the study of SF, the measured scarcity directly promoted the value, can be seen from the table above, when SF, higher market value tend to be higher, the next step is to collect data and make statistical model,
Data
I from December 2009 to February 2019, calculated the monthly SF, and value of the currency (a total of 111 data points), you can use the Python/RPC/bitcoind directly from the query in the currency block chain blocks per month, the actual number of pieces in one area is different from that of number theory, because the block is not every 10 minutes to generate a (for example, in 2009, the first year of blocks significantly reduced), through monthly blocks and known piece of subsidies, you can calculate flow and inventory, I through any overlook the former one million SF, calculation of COINS (7 months) to correct the lost coin, more accurately adjust the lost coin, will be