Hbar Coinmarketcap

by Apr 13, 2019Hbar

How to Determine Market Valuation for Hbar Cryptocurrency
Summary: Understanding the method used by financial investment institutions as well as retail investors is critical in determining things like hbar price analysis and future hbar coinmarketcap. The market capitalization is just one of several methods of determining a numeric valuation of an asset, such as a cryptocurrency. Hbar price is directly determined by this valuation method as are many other digital assets, such as bitcoin, ethereum and EOS. Hbar is the utility token in the Hedera Hashgraph crypto network and is used to make financial transactions using the coin, as well as smart contracts, and secured file storage. In order to calculate the coinmarketcap of hbar, a simple formula is used. The total circulating coins in the market are the tokens that have been made available by the platform for use. This number is then multiplied with the spot price, or most current trading price based on the largest and most liquid exchanges in the world. The hbar price x circulating coins = total hbar coinmarketcap. This analysis is fairly straightforward and simple. In some cases, consideration of the entire potential supply of coins is used to assess the long term possible market cap valuation.  However, this is not used in the cryptocurrency market due to multiple reasons, mainly, because the coins are necessary for transactions. Meaning, that if the tokens are not available for use, as in a treasury, then they should not be used to assess the total value of the platform It is helpful when determining what value the coin is at in the most up to date manner. This simple crypto valuation formula can then be followed in charts to determine the best time to buy hbars or sell them based on technical analysis. Price prediction is difficult in itself and takes a
Investors:  hbar price x circulating coins = Total hbar coinmarketcap.  Avoid using the TOTAL supply of coins in the market cap calculation of hbars since they are not used by the user for transactions and are considered an unconventional analysis of coin valuation. Coin metrics, release schedules and much other specific information regarding Seed, SAFT and institutional investors are listed below.
Discussion: There are many methods that a cryptocurrency investor can use to value a particular coin and platform. Using the method of circulating coins times the current trading price is the fastest and easiest way to enumerate its value in monetary terms. However, there are many things to consider in the process of estimating the usefulness of a cryptographic network that will certainly help estimate a coin’s long term value and future price prediction. Cryptocurrency is quite a new financial technology and is forming a wholly unique lexicon, or dictionary of new terms to describe its properties and use cases. The first use case is obviously as a medium of value exchange, innovated by bitcoin as an exchangeable token. However, the Hedera Hashgraph network has extended those possible use cases to a whole new global level addressing many business use cases. Being familiar with the financial metrics will help an investor not only buy hbar at good prices, but also understand the larger market of tokens. Many of the terms and formulas that are used in this ecosystem are actually borrowed from traditional financial markets, such as stocks, bonds, commodities and exchange currencies. We will explore these and define the subtle differences and compare them to the crypto universe. REF:https://www.investopedia.com/ask/answers/122314/what-difference-between-market-capitalization-and-market-value.asp The wisest valuation strategy in the crypto space is to consider both a platform’s overall value proposition, or value statement (e.g./ hashgraph hbar allow users to make micropayments that bitcoin cannot do) as well as its technology. Just looking at hbar marketcaps or hbar prices does not allow an investor to see the larger vision that the network may be able to grow to. The Hedera Hashgraph technology is able to provide a large amount of currently unavailable services such as digital micropayments, smart contract execution with high throughput and secured file storage with confirmed deletion. These are amazing propositions that no current cryptocurrency platform can do at full scale. However, it is important to parse the differences between circulating supply coinmarketcap calculation and total coin supply market cap analysis. Traditionally in stock markets, such as the New York Stock Exchange, listed companies publish their total amount of shares issued, total amount of shares outstanding (or available) and the market sets the price. Combining the circulating shares with a multiple of the current share price generates the public marketcap value.  For example, if Apple, Inc. has a total of 5 billion outstanding shares and its share price is at $200 US dollars, then the math of 5B x $200 USD = $1 Trillion USD. This is the most common metric used by Wall Street in evaluating a company’s market value. Another method to consider is a company’s enterprise value, which is calculated much differently and is not used in current cryptocurrency coinmarketcaps. This approach takes all the assets, or owned valuables in a company (e.g./ buildings, vehicles, bonds, equities, etc), and adds them to its debts, or things it owes ( e.g./ bank loans, outstanding payments for rent, etc). The enterprise value is different because it counts debt as an asset in a way, indicating that the debt may help add value to the company’s revenue potential. For example, if Apple, Inc. has a book value of all its assets at $1 Trillion USD and a debt amount of $100 billion USD, its enterprise value would be equivalent to $1.1 Trillion USD. This would be the monetary value it would require to be completely acquired by a qualified buyer in order to have full access of ALL of its potential revenue. REF: https://www.investopedia.com/terms/e/enterprisevalue.asp In the cryptocurrency world, the main metric used for valuation is the simple marketcap formula as described above. Due to many dissimilarities between digital assets such as hbar coins and stocks, the enterprise valuation method is never used. Another calculation that is also avoided, but could be applied to both crypto and stocks, is the diluted marketcap. This valuation method takes into account the totality of available coins in cryptocurrencies and all outstanding, or tradable shares of a stock. Diluted marketcaps take into account any minted tokens or all possibly mineable coins. This is not used because it refers to an either unpredictable number as in the ethereum network that has no hardcap (fixed supply of coins) or to a supply of coins that will not be available for use. If a coin cannot be used in the network, then its utility is zero. This would imply that a stored coin in a treasury would not be in the liquid supply and therefore not add value to the total crypto marketcap calculation. It is strongly recommended that investors follow convention within the cryptocurrency space in regard to circulating supply rather than the fully diluted marketcap. This is a method that no crypto coin currently does. What’s more is that most equities also avoid the use of this method due to its inherent skewed outcome. INVESTORS: It is recommended to use the conventional value analysis of circulating supply of hbars x hbar price to determine hbar coin market cap. In example, hbar supply 2.33 billion (at open access) x hbar price $0.12 (SAFT price) = $279.6 Million USD in estimated hbar market cap. Since it would be unconventional to count every single minted hbar coin in the entire platform, this method of valuation is not recommended. The grand majority of coin valuators do not take this approach and will only mislead an hbar investor. We will discuss the potential future of hbar price and marketcap in the following portion of the article.
Hbar SAFT Fund Raising: As with all developing technologies, early investors are recruited to fund the platform until it is ready for public access. The investment structure of Hedera Hashgraph’s earliest founders did not match the current trend in cryptocurrency. Hashgraph did not run an ICO, or Initial Coin Offering. This is a borrowed concept from conventional stock markets which offer Initial Public Offerings, or IPO’s. This is a complex legal security offering, hosted through a financing bank or institution and has a hefty price tag. The Hedera SAFT offering followed a less common pathway in order to avoid any kind of regulatory scrutiny in the largely unregulated cryptocurrency market. The Securities Exchange Commission, or SEC, is the US federal regulatory body responsible for overseeing the fund raising of all securities in the market, including stocks, bonds, or any kind of public investment sale. Since cryptocurrency has not been formally regulated nor has been even semantically defined by the SEC, the administration of Hedera Hashgraph felt that the most prudent fund raising would be the least risky with the most amount of self-scrutiny. This method was the SAFT offering in August of 2018, and stands for “Simple Offering of Future Tokens”. REF:https://www.marketwatch.com/story/what-is-a-saft-a-crypto-fundraising-method-drawing-regulatory-scrutiny-2018-05-10
The SAFT fund raise raised frustration with the cryptocurrency community who were eager to invest in the more popular ICO model of funding. However, the management of Hashgraph found this to be too uncertain and that taking that risk could put all investors as well as the platform at threat of SEC scrutiny. The net result was that the SAFT raise was unfortunately, per the SEC’s strict guidelines alone, restricted to accredited investors only. Many unaccredited investors that were initially interested in the Hashgraph algorithm were turned away and even felt that Hashgraph was somehow accountable. The prudent decision by Hedera admin was likely the best choice going forward in this very uncertain emerging financial technology.
INVESTORS: An accredited investor per the SEC’s definition is a person that earns at least or more than $200,000 USD per year per individual, or at least $300,000 USD for joint income, for at least 2 years in tax filings. Alternatively, an accredited investor can also be a person that has a total net worth of at least $1,000,000 USD. There are a few more definitions as well for larger businesses and venture capitalists as described in this link: REF: https://www.investopedia.com/terms/a/accreditedinvestor.asp In summary, the SAFT fundraising method of Hedera Hashgraph’s 2018 offering followed the strict and exclusionary SEC guidelines that effectively precluded many enthusiasts from joining the public investment round. However, an even earlier investment round in private was held by Hedera administration through a process known as a seed round. Seed investments, as the name implies, is one of the earliest ways an accredited investor can participate in a startup company. In most traditional seed offerings a private equity or investment firm represents many investors in a collected pool of funds that are used to invest in early technology. In the first round of Hedera Hashgraph’s private offering, institutional investors participated and funded a large amount of the raise.
COIN METRICS: The breakdown of coin metrics, seed and SAFT investments in the Hedera fundraise are as follows understanding that the fixed supply is 50,000,000,000 hbars: Hedera Treasury: ~31,500,000,000 hbars or ~63% of the Total Coin Supply (not sold yet) SAFT Investors: ~8,700,000,000 hbars or ~17% of Total (sold August 2018) SEED Investors: ~3,000,000,000 hbars or ~6% of Total (sold prior to SAFT) Other (employees, Swirlds): ~7,000,000,000 or ~14% of Total Total Fund Raise: ~$120,000,000 USD (saved by HH in USD fiat)
At end of the first year : 3 billion tokens (6.6% of Total supply) will be as follows: SEED Investors ~1 billion tokens SAFT investors ~170 million tokens HH Employees ~1.7 billion tokens HH Community ~50 million tokens
COIN RELEASE: The schedule of hbar coin release has a very fixed and regular distribution pattern. The design of this release is to ensure that the open access liquidity is adequate but is also not too liberal that it allows for mass dumping at market. A fixed program of release is comprised of several tiers based on investor preference at the SAFT round of investment as well as a more stringent plan for employees and founders. SAFT Release: The SAFT investor will have the following distribution and lockouts at Open Access to the network and First Coin Release: Investors of the SAFT price of $0.096 per hbar will receive: 20% of Total hbars on Day 1 20% of Total hbars in 1 year 20% of Total hbars in 2 years, etc until all released by 5 years Investors of the SAFT price of $0.12 per hbar will receive: 20% of Total hbars on Day 1 10% of Total hbars in 1 month 10% of Total hbars in 2 months, etc until all released by 8 months SEED Investors/Employees will also follow a similar schedule of: 20% of Total hbars on Day 1 20% of Total hbars in 1 year 20% of Total hbars in 2 years, etc until all released by 5 years
DISCUSSION: The release schedule of cryptocurrency hbar is set in a manner to prevent mass dumping at market and to create an internal incentive to all long-term hbar holders. Founders, employees and early investors will be locked into at least a 1-5 year plan that does not allow them to sell more than a small fixed percentage at exchanges at each release. This is a unique feature amongst cryptocurrencies, which typically have used the ICO route of fundraising and at open access are all immediately available for buying and selling at exchanges. This makes for a difficult price prediction of hbars and other coins due to this mass liquidity at day one. The coin metrics are designed also around the necessity to maintain a majority of them within treasury. This is a vital necessity of Proof-of-Stake consensus mechanisms (PoS). In order to prevent a Sybil attack, or 1/3rd majority attack, Hedera Hashgraph has arranged that 2/3rds of hbars remain in secured treasury under management of the 39-member Governing Council. This is true for any PoS system and cannot be avoided.
In the PoS cryptocurrency of hbar, the voting mechanism is directly tied to the amount of hbars that are at stake at each node. Initially this will be managed by the founding Governors, but in a reasonable amount of time it is expected to be fully distributed to all members that wish to be nodes as well. In the time between open access and this stage of community node hosting, a brilliant method of earning hbars will be made through the innovative idea of Proxy Staking.
Proxy Staking:  Staking in the digital asset world is the process by which a coin holder assigns its tokens to a node address and earns fees everytime it participates in the voting algorithm consensus. In Hedera Hashgraph’s Virtual Voting algorithm, any node is able to perform this function as well as allow other non-full nodes to assign their hbars to staking. This ‘proxy’ or surrogate way of a non-hosting node using their equity in hbars to help secure the network is rewarded every 24 hours in the network design.  All a user has to do is go into their wallet and pick a node to proxy stake and they will earn a return. The amount of that proxy staking will be determined at Open Access in the summer of 2019. The most remarkable feature of Proxy staking in Hedera Hashgraph is that a user is not technically bonded to the stake and is free to spend any amount of those hbars without penalty. Whatever hbar tokens are left by number in the proxy stake for 24 hours will earn a reward. This is not true with other PoS models, where the staked coins are not allowed to be used while in their stake position. This is yet another differentiating feature in Hedera unlike any other coin. INVESTORS: Proxy staking in Hedera Hashgraph is a uniquely designed investment structure that allows a user to both stake their hbars for voting consensus, earn a daily reward straight to their digital wallet, and yet still have the ability to spend some or all of those funds without penalty. The concept of Proof-of-Stake has been a future hope of many crypto platforms, but has been prohibitively difficult due to issues with the conversion from current Proof-of-Work security. Earning by staking is a two-fold way of financially benefiting from both the increase in marketcap of hbars by network adoption but also through the daily voting fee incurred. This return for adding to consensus should be comparable to traditional investments such as money markets, certificates of deposit and even dividend-bearing stocks. Wise investors will seize this new digital asset potential without having to ‘lock-up’ their funds from use.
BITCOIN MARKETCAP vs HEDERA HASHGRAPH: There is no cryptocurrency with more digital asset value than the bitcoin network. At its peak in December 2017, bitcoin reached a marketcap of nearly $320 billion USD based on its circulating supply of coins which is estimated at 16 million. The total coinmarketcap at the time was nearly $800 billion USD as well. This was an astonishing demonstration of bitcoin popularity and speculative value. However, the facts about Proof-of-Work systems like bitcoin are that they are not currently sustainable and are under regulatory pressure to decrease wasteful electrical energy and reduce the barrier for any person to join the network without having to buy a supercomputer. In china, bitcoin has been officially banned due to this excessive electrical energy waste, greater than many countries usage. REF:https://www.cnbc.com/2018/08/07/bitcoin-market-share-near-level-when-price-hit-record-high.html Since Hedera hbars have not been released at the time of this article, it is difficult to estimate what the hbar marketcap will be at open access, in early trading and in long-term value. It should be very clear to the reader that the Hashgraph algorithm is by leaps and bounds, stunningly ahead of ALL cryptocurrencies trading at market today. However, as investors and speculators, it is also important to make at least some preliminary projections in both hbar price and hbar coinmarketcap in the near future. In order for habrs to be in the top 25 of all cryptocurrencies, it must receive a total marketcap equivalent or above the current level of Basic Attention Token’s ~$380 million USD value. According the SAFT price of hbars as noted above, the total market cap of Hedera tokens is nearly at this level at $360 million USD. However, the SAFT fundraise occurred over 9 months ago at the time of this article. Moreover, many developments in the Hashgraph ecosystem have occurred since the initial coin minting and the SAFT raise, which are considered catalysts for higher price action.
Considering that since the SAFT, Hedera Hashgraph have announce multinational, mega cap companies such as Deutsche Telekom (parent company of T-Mobile, largest EU mobile phone telecom company), DLA Piper Global Law Firm, legal megacap firm servicing a global network as well as other international corporations. Magazine Luiza is the largest Brazilian Retail company, Nomura Holdings, a Japanese investment firm and Swisscom blockchain, an Information Tech Services company. REF: https://www.telekom.com/en https://www.dlapiper.com/en/us/ https://www.magazineluiza.com.br/ https://www.nomuraholdings.com/company/outline/ https://blockchain.swisscom.com/ LinkedIn: https://www.linkedin.com/company/telekom/ https://www.linkedin.com/company/dla-piper/ https://www.linkedin.com/company/magazine-luiza/ https://www.linkedin.com/company/nomura/ https://www.linkedin.com/company/swisscom-blockchain/ An additional catalyst since SAFT is the development of the open source wallet and Google Chrome Wallet Extension for use in internet web-based cryptocurrency transactions through standard web pages. This fully demonstrated the real time capacity and throughput transactional ability of Hedera to handle 2-3 second wallet transfers of micropayments. This is a major unmentioned development of the Hashgraph network. Many early users were able to send and receive hbars in lightning fast transactions, confirming the Hashgraph whitepaper and testnet claims. In the field of crypto currency investments, catalysts like these have spurred massive gains in coins such as bitcoin, ethereum, EOS and iota. However, Hedera is in a class in itself in regard to the top 5 critical features for the best network in the world: speed, scale, security, fairness and stability thru distributed governance. There is no doubt that if these developments are calculated in an hbar market cap analysis, then the trading hbar price will certainly be amazing.
HEDERA HASHGRAPH MARKETCAP ESTIMATION: Considering the last sale price of habrs through the SAFT sale, as well as the amazing progress in Governing Council members, public demonstration of the Hedera wallet, success of the fundraise and its valuation an investor would be wise to estimate a positive hbar positive.  A table below describes the different scales of hbar prices and corresponding market caps in this event. Many variables must be in order for the hbar price to significantly increase and the larger crypto market sentiment is important to consider if one is interested in buying hbars at open access.
CONCLUSION: There are many remarkable properties of the Hashgraph algorithm that should be included in an investor’s hbar price prediction model.  Foremost should be consideration of the 5 major technical breakthroughs achieved by Dr. Leemon Baird including: best-in-class speed (100K TPS), scale (millions of TPS with sharding), security (aBFT-bank grade level), fairness of timestamp, order and access, as well as the first Governing Council model in crypto. Understanding the market cap formula and following the Hedera network developments will allow an investor to more accurately hbar price action and marketcap. The future is bright for the Hedera public platform with many multinational, mega-cap corporations participating in the governance and dapp (decentralized application) development. Names as big as Deutsche Telekom, DLA Piper Global Law firm, Magazine Luiza of Brazil, Nomura Holdings of Japan and Swisscom Blockchain. The market value of hbar will certainly be determined by traditional metrics of valuation with a starting value of at least $360 million USD, nearly equivalent to cryptocurrencies near the top 25 coins on market. However, if one considers the incredible breakthrough DLT in Hedera, it should easily be a top 10 coin in a short period of time. Eventually, if adoption follows as expected by Hashgraph enthusiasts, the Hedera hbar could eventually rival the Bitcoin and Ethereum networks due to its superior tech, governance and corporate adoption through the Council Members. The most remarkable feature of the Proof-of-Stake design in Hedera is that any user can participate in consensus with proxy staking, or committing one’s coin in wallet to a Council node in the early phases of the platform. Stakers can earn a small percent of all transaction fees simply by assigning their hbars to a node. This is a truly breakthrough investment model in cryptocurrency and will certainly be a strong driver to adoption. Many new investors may find this staking system better than certificates of deposit, money markets, dividend-bearing stocks and other financial tools for long-term gains. The best kicker is that the coins in proxy stake can still be spent from the user wallet without penalty. Now that is a design that certainly begs for mass global adoption. Good luck to all.

Ħello Future.