ª will increase 100 times.
This, however, does not seem to be real. Q1 2014 Online Gambling Quarterly report published
by MECN states that, according to experts in this field of gambling, bitcoin has very little
the potential to increase their share in the profits obtained from online gambling 14
This is important because the websites offering bitcoin gambling provide the only one that makes sense
support for the price of this cryptocurrency. In a situation of a drastic drop in prices, these services are the only ones that can start buying bitcoins in order to maintain their continued operation. The rest
business entities accepting bitcoin as a form of payment have no interest
in buying bitcoins. From their perspective, accepting bitcoins is the form of advertising on which
they can lose, as in the case of accepting the services of websites offering group purchases. Bitcoin
gambling sites are the only ones who need bitcoins for business purposes in order to pay out winnings to their users.15 To keep their daily profit at 1 million
In USD, these services can count on a maximum turnover of 21 million bitcoins per day16 (currently these turnover are about 200 times lower). Assuming the profits from the activity
of these sites amount to 1% of the turnover which is 0.2 miles. btc for 1mil. USD or $ 5
for bitcoin. Below this price limit, the profits of these services are maintained at the level of 1 million.
USD per day will no longer be possible. As a result, the price of $ 5 per 1 btc is minimal
support for bitcoin price versus dollar. At this price, all bitcoins can be bought
for around $ 100 million saving the bitcoin gambling sites that in our model
have annual profits of $ 365 million.
In order to understand the current bitcoin prices, it is enough to repeat the above reasoning applying
current scale of revolutions. It amounts to about 100 thousand. btc per day, which is approx. 200 times less
less than 21 miles. This is 200 times the price of the $ 5 calculated previously. Thanks
this gives us a price of $ 1,000 per 1 btc, which is about 2 times higher than today.
Assuming that there is indeed a potential for bitcoin gambling services to generate
annual profit of USD 365 million, we can treat bitcoin as a kind of
stake in this gambling business. This allows for a more realistic valuation of bitcoin.
A project generating a constant annual profit Z can be valued using the discounted method
cash flow. In this method, future <a href="https://inwestujfinanse.pl/" itemprop="url" >inwestujfinanse.pl</a> cash flows are reduced to
adequately account for losses resulting from their remoteness in time. The easiest way to do this
type is simple capitalization. It is assumed that the investor will give a certain discount on R
(as a rule it is 10%) and estimates the flows that will occur after n years according to the easy
to understand the equation: (1 + R)
n · price of the nth flow = Z. Summing up the prices of all
so we get future flows
price = X∞
n = 1
WITH
(1 + R)
n
=
WITH
R
.
By agreeing to the standard R = 0, 1, we can see that, in simplified terms, the simple capitalization method
14 www.isa-guide.de/english-news/articles/110657.html
15 It is worth adding that these users (ie players) also provide a specific demand for bitcoin, supporting their price.
16 Assuming that trading in all available bitcoins will appropriately extend the time of confirmation
transaction.
13
consists in multiplying the constant annual profit by 10 and taking this result as the price
enterprise generating these profits. In our case, the price of the bitcoin gambling business is $ 3,650 million. Treating all 21 million bitcoins as
specific shares in this business17 we get that the price of one bitcoin is 3 650/21 = 173.8
USD, which is about 3 times lower than the current one.
Assuming that the previous bitcoin price increases were related to its use
As a gambling asset, we get a fairly small potential for further increases in the price of this currency.
In addition to consuming the advantage of attracting bitcoin production, the
also an investment advantage of bitcoin. Due to the fact that more than half of bitcoins remained
produced at a time when their price was 50 times lower than today, there are quite large
the risk of wanting to realize these profits. The only services that need bitcoins to run
they are too young and have not managed to generate adequate profits to guarantee the current price of bitcoin in the near future. Maintaining the price of bitcoins
above the current levels will depend on the further popularization of this cryptocurrency with
hope for an extension of its price increases, which will reduce the risk of profits from investment in
bitcoin.
4.6 F. Necessity to popularize
The popularity of bitcoin resulting from treating it as a token for the cultivation of gambling games
seems to be reaching its limits reflected in the stability of bitcoin prices against the USD. This popularity is not great and it can be easily diminished by the legislative framework towards
a gambling industry that uses standard currencies. It is very likely that bitcoin has already used almost all of its strengths (producing