Valuation of Cryptocurrencies by Metcalf's Law by Joseph Lassan, flags 1 chain as 92% undervalued

What is Metcalf's Law? Metcalfe's law states that the value of a telecommunications network is proportional to the square of the number of connected users of the system.

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See the full thread here: https://twitter.com/LassenJoseph/status/1483919579256655875 or quoted below, all credit to https://twitter.com/LassenJoseph:

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Have you ever wondered if L1 valuations follow Metcalf's Law? If so, I did the hard work for you and ran the numbers to find out. We look at $BTC, $ETH, $BCH, $ETC, $DOT, $ADA, $DOGE, $DCR, $DASH, $ALGO, and $LTC. tldr; it's... not that great, but close in some cases. More below:

All data as of Jan 10, 2022. Here is the summary of the results if you don't want to look at visuals for each individual coin:

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Summary of actual Mcap vs Metcalf Prediction

First, the OG: bitcoin $BTC. It turns out this pretty well follows Metcalf's Law. It could be because there is little happening over the chain other than pure transaction volume. Predicts that bitcoin is 14.5% undervalued... could be accurate...

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Bitcoin

Next, the second OG (is that a thing?): etherum $ETH. This one also follows Metcalf's Law pretty well, which isn't a surprise since smart contracts do allow participants to add value over the network. Shows ETH overvalued by 32.4% (short term bearish?!)...

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Ethereum

Another oldie up next, bitcoin cash $BCH. Similarly to Bitcoin, the valuation of this blockchain seems to follow Metcalf pretty closely and shows that it's slightly undervalued by 10.6% (a day's volatility in crypto-world!)...

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Bitcoin Cash

Let's keep going with the OG forks (technically ETH is the fork, but moving on...) Ethereum Classic $ETC seems to show a sad story ???? and not a great prediction by Metcalf. Active users who still believe this is the main chain hodl on as the market cap slowly bleeds out. Yikes...

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Ethereum Classic

The final oldie that we will talk about before getting into more exciting things is Litecoin $LTC. A chain that's been chugging along since 2011 - longer than most everyone has been in crypto. Metcalf is either a bad prediction metric, or this chain is way undervalued, by 92.4%!

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Litecoin

Polkadot $DOT is a super interesting project and a technical one focused on a multi-chain world. What we see here is the emergence of hype. People were super pumped about this project when it first launched and then re-based their expectorations once the excitement wore off:

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Polkadot

Algorand $ALGO claims to be a scalable, AI, future-chain of some kind... idk. What I do know is that either a) Metcalf loses it here, b) my data is inaccurate, or c) this chain is severely undervalued by 86.3%... I don't think it's c.

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Algorand

The next chain is one of the most meme-y ones out there: Dash $DASH. It seems that Metcalf kind of tracks the market cap, but more tellingly, the market cap is still < Metcalf... perhaps because of the lack of utility of the chain? 54.9% undervalued based on this metric alone:

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Dash

Now, the final two that you've all been waiting for. First, we will look at Cardano $ADA, the most YouTube-influencer-pump-and-dump dumpster fire chain out there. Not surprisingly, Metcalf shows this chain is more than 93.1% over-valued:

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Cardano

Finally, the meme-king itself. Dogecoin $DOGE. The Elon Musk led chain is the second most overvalued by Metcalf at 51.2%. To be honest, any true investment analyst would say its intrinsic value is zero, but Metcalf knows nothing of financial analysis, only number of nodes:

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Dogecoin

So, I would recommend that you only look at this metric as a curiosity, or as a very light weighting in your fundamental analysis. It could be helpful on $BTC, $ETH, $ECH, or $BCH, but otherwise, I would steer clear. Also, thanks to @e_krispy31 for the assistance on research.

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