f(x) = tech stocks market cap / bitcoin vague market value
Alphabet (Google) has a market capitalisation of 582 billion USD.
Assumptions: 1 million coins are lost due to mismanagement of passwords, private keys, death, PC hardware failure. 1 million coins belonging to Satoshi will never be used.
So we have about 15 million coins in the wild. A nicer round number. Current bitcoin price 1000 USD, hence 15 billion value of coins. Market capitalisation is still a different way of thinking. For now just accepting this term as similar.
Maths: 582 billion / 15 billion = 38.8 times.
Google is bigger than bitcoin by 38.8 times. Is Google a close alter-ego of bitcoin? Email is almost Gmail. Search is everywhere, used all the time. Google Now is in majority of Android world. Google Maps are used by shops, travelers, digital nomads.
Let’s try another.
Intel market cap is 175 billion USD. Intel is a gigantic hardware company. Every large PC manufacturer will buy their engine from Intel. They are in servers powering the internet, databases, Amazon services.
Maths: 175 / 15 = 11.67 times
Let’s try Amazon:
403 billion / 15 billion = 26.86 times
Let’s try the current USD in circulation (2013, paper and coins):
1.2 trillion / 15 billion = 80 times
Let’s find out how a big investor’s favourite non-tech company performs:
415.5 billion / 15 billion = 27.7 times
Nice new knowledge to know that Amazon is as strong as Berkshire. Amazon IPO was on 1997. That is 20 years. Berkshire existed a long time ago; Buffett took over is 1964, or something like that.
Amazon was a store. Online book store. Then online music store. Then a storage store. Then a delivery company. Then a conduit of online stores. Amazon survived the dot com bust. Amazon is active in advanced or developed nations. US, UK, Japan, Canada. The greatest nemesis of Amazon was eBay. In fact eBay was a sure de-facto winner by virtue of owning no physical warehouses. Amazon has to own, operate, rent, buy, manage, clean (yes warehouses need to be cleaned, painted!). eBay just slaps a percent on each sale. Then slaps another with Paypal. How could they lose?
So let’s look at eBay:
36 billion / 15 billion = 2.4 times of bitcoin
What? As a former disgruntled user of eBay, they suck because they don’t protect sellers, who are paying them fees to operate. With Paypal together, they took over 10% – 20% fees. Never once in a dispute, that I can say is fair. In fact I had to pay SquareTrade, to be a SquareTrade member to help me remove negative feedbacks (with another fee!) in my eBay profile. Each negative feedback will reduce your ratings from a perfect 100%. Once you get a negative, your ratings, sales all fall.
Amazon took time to consolidate. Firstly destroying book stores. Then destroying music stores, CD stores. Then destroying Blockbuster. Amazon improved on their customer services. On their warehousing management. Bezos was so good with that he even manage the virtual warehouses now. Amazon Web Services. He even created a line of tablets for consuming his books. Did eBay made anything special? Fees kept increasing. That was their only move. In a game of chess, Bezos wins even though he started with a rook down.
What other publicly listed companies should be compared to bitcoin (to try to derive and estimate bitcoin’s future value)? Send your suggestions.