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RE: Steemit Crypto Academy Contest / S15W2 - Stock to Flow Model

in SteemitCryptoAcademy6 months ago

Greetings friend,
Your knowledge of the S2F model is commendable, bearing to the fact that you just learnt it from fellow participants posts.

The Stock-to-Flow (S2F) model is like a tool that helps us measure how scarce and valuable something is, especially for assets like Bitcoin. It compares the amount of Bitcoin that already exists (called the stock) to the amount of new Bitcoin being created over time (called the flow). By looking at how many Bitcoins are currently available compared to how many new ones are being made each year, we can get an idea of how scarce the asset is.

The Stock-to-Flow model gained popularity because it helps us predict or estimate the future value of assets, particularly for Bitcoin. It helps us understand how Bitcoin's scarcity might impact its value, similar to how we think about gold. The basic idea is that the rarer something is, the more people might desire it, potentially driving up its price. So, the Stock-to-Flow model is a way for investors and analysts to make educated guesses about how valuable an asset like Bitcoin could become in the future based on its current supply and the rate of new supply coming in.

Good luck and all the best in the contest pal.

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Yeah of course thats true for the stock to Flow model and am agreed on your comment.

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