Quote from: Peter R on April 15, 2014, 04:36:14 PM

Quote from: madhanreddyg on April 15, 2014, 01:57:12 PM

Hi Can any one tell who will decide the value of New Coins...

The value stored in the blockchain ledger used by a coin grows with the coin's user base and economy.

I've been working on methods to quantify this and I've found some startling relationships. The value V of bitcoin's ledger appears to follow Metcalfe's Law such that V is proportional to the square of N, where N is what I refer to as the generalized user base. Below is a log chart of bitcoin's Metcalfe Value versus its market cap over its complete price history:

The market price dances about the value trying to predict what will happen next.

Each community members adds a different ΔN-value to the coin. Someone like Patrick M. Byrne (CEO of Overstock) brings a large ΔN-value to bitcoin because his involvement has a pronounced effect on the coin's economy. Someone with 0.1 BTC that enjoys gambling at just-dice.com brings a smaller (but still positive) ΔN-value to the community.

The question is "what community should you join if you want your contributions to be maximized?"

Since

V = c N²,

by differentiating we get

ΔV = 2 c N ΔN = √(4 c V) ΔN.

This means that the value you bring to the community (ΔV) is proportional to how productive you are (ΔN) but scaled up by the square root of the value that already resides in the community. In other words, if you know yourself to have positive productivity and if you want to maximize the value of your contributions, you should join the community that is already the most productive.

Now that's an answer! It certainly agrees with common sense and logic. The more people use the currency, the more valuable it is to everyone. Thanks for your effort with this response.