It's pretty simple guys. David Johnson talked about companies wanting to enter billions of entries. I am personally looking for Factom to CONSERVATIVELY have 1 billion entries per month within one year from now. Let's say 10 entries per EC so that means 100,000,000 EC's burnt per month just from companies Factom Inc is already talking to. At .001 EC/Factoid, that means 100,000 Factoids burnt per month. That means, within one year, I believe Factoids will be a deflationary digital currency.
I believe trying to value Factoids based upon the equations you guys are throwing around is very short sighted. It would be like trying to value Microsoft before they signed that first IBM contract to provide them the DOS operating system. Bill Gates had identified an ENORMOUS and HIGHLY LUCRATIVE niche that needed filled and he had put together the team necessary to execute on that vision.
How do I value Factom and how am I investing here? I am investing as if we're dealing with Microsoft, circa 1980.
Why would you assume anything other than one entry per EC, which is the current situation?
I think Factom is a great idea but I am not really sure to be honest how anybody is making money here, or why the Factoid cryptocoins issued at ICO have any real value. Once M3 starts, the price of those Factoids created by inflation (878K per year) can be priced at whatever "price" is necessary to make them generate the required number of ECs at 0.001 cent per EC to support the annual data rate. This "price" would burn all annual Factoid coins produced by inflation, and result in a sustainable steady state.
But....why do Factoids issued at ICO have any value at all in this steady-state scenario? ICO Factoids are not needed for burning to create ECs - that is taken care of by the inflationary Factoids. Thus ICO Factoids are functionally useless. There is no reason
other than a psychological one to tie the price of ICO Factoids we hold today to inflationary Factoids that will be created tomorrow and burned to create the necessary number of ECs to run the Factom project.
I don't disagree with the Microsoft 1980 analogy - but holders of ICO Factoids aren't holding shares of Microsoft, they are holding 5 inch DOS floppy disks that will never be sold.
ECs are kept at a stable price of around 1/10 of a cent.
876K new FCT are created per year w/ M3.
Given ECs fixed USD price, ECs are removed from the system at a rate directly proportional to Factoms real-world use.
If 1 billion USD is spent collectively to use the Factom system, in order for the supply of FCT to not be used up in the conversion process to EC, the price of FCT would have to rise (or stabilize) to $1,141 USD.
Fixing the conversion rate of EC-to-USD (or any other relatively stable fiat), while keeping the FCT-to-EC conversion rate dynamic does
not mean that the price of FCT (IOC or otherwise) is arbitrary or irrelevantwhich the floppy disk analogy suggests.
Basically, the price of FCT
has to rise; if it didnt, all existing FCT would be burned in the conversion to EC, and
there would be no more FCT! This is where supply/demand comes into play, resulting in the (base) price of FCT being directly proportional to the extent of Factoms use.
If people are willing to pay 1 billion USD to use Factom in 2018, then the price of FCT will have to be at least $1,141 USD, as described above, in order to prevent the supply of FCT from being depleted. Again, this is ignoring the effect of speculation, which could realistically only raise the price of FCT from its natural/base price.
tl;dr: FCT = investment of the decade.