Bitcoin and Steem are SEXY (and could be worth a LOT)

In 2013, a famous global macro trader named Raoul Pal did an epic write-up of his method for valuing Bitcoin. His letter costs a small fortune per year, but if you can afford it, you will make a small fortune per year, as he averages around a 30% return per year (noice). This particular letter he has released into the wild, and can be found here.

How much for a Bitcoin?

Essentially, Raoul thinks bitcoin is either worth zero, or a whole hell of a lot of money. He reckons a price potential of USD $1,000,000 per Bitcoin. His methodology for coming to this figure is equating Bitcoin to Gold mining and the current price of Gold. Adding to this, many people (including Raoul) think the price of Gold will continue to increase as governments around the world debase their currencies and play games with interest rates (the price of money) in order to deal with the EPIC global debt problem. This means, that if Gold goes up, Bitcoin's price potential increases as well, based on this methodology.

Bitcoin could be the foundation for it's own world
Part of Raoul's supportive arguments is the fact that besides use as a currency, bitcoin could be used as the foundation for a whole world of potential uses. This world of uses could add tremendous value to the bitcoin itself as people will need to buy bitcoin in order to be apart of it.

How much for a STEEM, a SMD, or an SP?

Steem is it's own blockchain based world. The three different types of Steem are:
STEEM: essentially the blockchain equivalent of paper money, most liquid
SMD: essentially the blockchain equivalent of convertible notes, semi-liquid
SP: essentially the equivalent of long term ownership interest, least liquid

Liquidity is a big factor in determining price. After all, something is only worth what someone else will pay for it, so there has to be a "someone" to sell it to. There are many more facets to determining price, not least of which is simply human psychology. But if we look at liquidity, STEEM will be the gateway to the Steem world.

A power-plant fueled by our heads
Given that STEEM is the gateway, and it's price determines the value of SMD and SP, that is all we need to look at. STEEM is rewarded by mining, posting, curating, market making, and commitment. At the moment, STEEM is not used to buy goods and services, however given that there are already markets where STEEM can be converted cheaply, this is a possibility. Given that people will have interest in getting paid for sharing thoughts and content, and given that thoughts and ideas are a renewable resource, STEEM should have an endless supply of fuel.

The Amazon stock price equivalent
Amazon is a fascinating company whose stock price continues on it's moon-shot trajectory despite not actually making much profit. However, anyone who uses Amazon knows it kicks ass, and continually delivers amazing products and expanding what it does. Their stock price keeps going up and up and up because their model is basically to break even while taking over the world, at which time, they will make all the money, leaving nothing for anyone else. I kid. But, Amazon can be related to the Steem world in that the Steem world is surely going to evolve and grow, be fueled by ideas, and the best ones get traction and it continues to grow. Additionally, the Steem world has a fuel base of quite literally anyone in the world. All looking to deliver and exchange value.

Skin in the game
One defining issue with our world today is the "skin in the game" problem. Think CEO's who tank companies only to get massive payouts when they are fired for sucking (insane), or Central Bankers who run monetary experiments with our hard earned currency (ridiculous speed insane). The Steem world solves this by allowing ownership in the form of SMD and SP. Anyone participating has an incentive to maintain the quality of content in the Steem world, thus supporting the value of STEEM.

So how much already?!?
My methodology is simple, because frankly, so am I. If Steem is it's own world, limited only by the imagination of it's users who have skin in the game, and STEEM is it's unit of account, then to me, the sky is the limit. It is hard to imagine the value approaching USD $1 million per STEEM, but then again, the full potential of the Steem world is only limited by our collective imaginations. If the Steem world evolves into a limitless ecosystem, it could provide tremendous value for being apart of it. And oh by the way, the process will be a compounding one. Moon-shots anyone?