A common notion in investing is that of value investing versus speculation. This is used as a basis for discussing supposedly differing strategies of asset allocation for different types of investors.
As with many man-made differentiation, this is just an easy way for the human mind to falsely dichotomous a continuous spectrum to make it easier to understand. In truth all investments have a risk of failure and a large potential upside, so-called value investments are just those with a larger distribution of likely events around the less extreme outcomes.
Chainlink is an early stage investment and is useful because of its strong fundamentals to discuss value add and value capture in the early stage space. This can be extended to investments in general with the appropriate caveats that certain aspects of value add and value capture apply more or less to early versus established investments...
When looking at a traditional investment the value add is simple to see and the likelihood of novel, unforseen value add is low but is not zero. Coke is likely to continue producing coke and expanding its consumer beverage portfolio, but is unlikely (but possibly could) invent a novel class of consumer good that it could then monopolize. Value capture in Coke's case is also easy to see as a percentage of overall market share for consumer beverages, which may grow or shrink any given year depending on overall economic forces giving people disposable income.
Value add and value capture are dependent on two differing proposals: how much marginal utility the end consumer gets from the item and how much of that marginal utility it transferred to the producer.
In healthcare there are markedly different value capture models for US versus EU medical devices and drugs despite essentially identical patient level value adds. Since EU countries are able to set drug and device prices as monopolistic buyers, they have no reason to allow drug and device manufacturers any real value capture. Since the US healthcare system is "paying" for all of the medical device/drug development, there is no downside to this approach, so long as the US exists. For this reason novel drugs and devices often don't seek IP protection in EU nations as it does not add value for the producer.
Chainlink enabling real world utility in smart contracts has a strong case for both types of value add and a very strong case for value capture...
Ian Diaz
We know. Fuck off. This is newfag cringe
Charles Harris
In early stage projects valuation is made not only on what portion of an existing market might the investment capture, but also on what novel markets might the investment generate (and proportionally capture). Chainlink has the immediate value of automating back end B2B and B2I systems. This requires two networks working in conjunction: an execution layer like ETH or a competitor where the key utility metric is that of an adequate number of participants so that 100% uptime and a 100% tamper-proof state can exist and an oracle layer with a working monetization scheme that incentivizes real world access to relevant inputs and outputs.
The combination of these two layers results in an endpoint that adds that amount of value. The question then is what amount of that existing value is captured by each layer and what additional currently non-existent value will be created by the existence of the two layers in combination?
Sebastian Moore
In determining proportional value capture, the question is one of replicability. Returning to the Coke example, Coke maintains high proportional value capture because of the portions of its product which cannot be easily replicated, namely its brand name recognition and its bottling apparatus. This becomes even more powerful when the product's sources are limited as in the case of the diamond cartel.
A cryptographically secure distributed network is no longer novel and the execution layer will become an increasingly crowded space. In these instances there generally exists a price to quality spectrum in which there is a small variety of options but relatively low margins.
Contrast that with the oracle layer. Once the most important real world inputs and outputs are incorporated into a layer, that layer is the most appealing to add any new needed real world input an outputs. There are a limited number of these real world inputs and outputs which are valuable in that they are scarce. An API providing the price of a publicly traded asset will likely have low value, one allowing for bank API access or access to protected shipping information will have high value.
The oracle layer is then a de-facto monopoly. Moreover, of the two necessary layers it is proportionally less replicable, making it the major candidate for value capture in the space...
Isaac Wood
The most interesting portion of early stage investing is in attempting to value long-term new markets enabled by a technology. At the advent of the internet, the value add was in marginal improvement to existing data transfer like mail to email, live stock prices and live news. The notion of social media or streaming on demand video did not become a profit center until the technology had become well known in its base use cases.
Chainlink's base use cases are insurance and derivatives (essentially smart contracts triggered by easily identifiable, objective triggers). Chainlink's main value case, however, will be not in the technology you will see it replace in the coming years, but in the novel markets it enables and proportionally captures. The crux of this is that nobody here will be able to identify these until the technology is well established in its initial use case.
Fortunately, there is a solution to addressing these situations in the setting of largely incomplete information: estimating proportional scarcity.
It's safe financially to buy a coastal house because there is a low likelihood that more coast will be created in the future. Similarly no matter how good smart contracts become, people will stop eating food. For the last hundred years or so the majority of marginal value add has been in optimizing middleman services (eg banking, tech). Widespread availability of smart contracts at a low cost changes this equation. Instead of Amazon's middleman services being rare, they will be easily replicable. This is important to understand over the coming decades because you will need to de-risk if Chainlink does end up doing what it intends to do...
James Nguyen
In summary: - Chainlink is the network best poised to be the majority value capture layer for smart contracts because it is the only portion of the smart contract stack that is, by necessity, scarce - Chainlink's value will increase as it proportionally captures value for existing markets and enables and captures value of new ones - Because of this, selling too early is a significant risk; setting time or price dependent endpoints to sell portions of your stack will help mitigate this - When it is time to take profits and invest those in safer investments which generate passive income off which to live, you will be doing so in light of the pendulum swinging away from middleman value and towards producer value
No Having read would have showed you how to decide when to sell Only because I fucked your whore mothers gaping whore asshole so many times turned me gay
Nathan Johnson
Unless you bought the ICO, you're the newfag Thanks user
Lincoln Martinez
>Widespread availability of smart contracts at a low cost changes this equation. Instead of Amazon's middleman services being rare, they will be easily replicable. This is important to understand over the coming decades because you will need to de-risk if Chainlink does end up doing what it intends to do...
what? how is that negative for cl?
Ayden Myers
Awesome breakdown fren. Based.
Nathaniel Reed
>brainlet
op means de-risk of services that will get fucked because cl?
Matthew Anderson
I just need it to hit $250 next year so I can retire before I hit 30 and go bald
It is not negative for Chainlink but it may be negative for your portfolio if you de-risk into banking or internet sector stocks No problem, happy you enjoyed it I mean that if Chainlink actually achieves its goal it will be very valuable. If that happens most people reading this thread will have the vast majority of their net worth in Chainlink. If you have a situation like that anyone but a complete fool will sell some portion of Chainlink to put into less risky investments. I'm saying when you do this, don't buy the very assets that Chainlink will likely undermine.
Julian Morales
If we're actually being realistic there is a significant, nonzero chance of Chainlink hitting $250 this year, but this chance is far below 50%. Better to work on building a good life to retire to now and being patient for a few years.
Been obsessed with CL and its implications for almost a year. Still learned a lot today. Thank you!
Charles Reyes
the chances of LINK reaching over $10 this year are exactly zero. that will never happen until staking is released, which is over a year away with 0% progress on pivotal tracker
Jeremiah Rogers
That's impressive Glad to be here Predicting an emerging market driven by inexperienced investors is nearly impossible, but I think people are thinking about Chainlink's future like people think about EOS or Nano. They should be thinking about a course like Bitcoin, for at least the next 20 years. I'd be willing to bet the percentage increase in Chainlink's value will be about the same every 4 years for the next two decades, barring outright failure
Jose Sullivan
COMPLETE NUFAG
Lincoln Thompson
Eric Holder had Paul Walker assassinated to cover up his gun smuggling operation known as Fast and Furious
Happy I was able to help The chance of staking being done and in the wild this year are low but nonzero. The chance of Chainlink being $10 without this is still high. The chance of Chainlink being above $10 when staking is live is very high. What block? Thank you for taking the time to participate Good on you
Colton Powell
>When it is time to take profits and invest those in safer investments which generate passive income off which to live, you will be doing so in light of the pendulum swinging away from middleman value and towards producer value
What exactly do you mean by this? Sorry I just got into this stuff this month.
Brandon Bell
ETH rise squeezed to a 6 month period would take us to about $80 this year.
Are you targeting that?
Joshua Cooper
Where do you see link in a year?
Charles Gonzalez
If your are to sell link, dont invest in something that will get btfo by chainlink/smartcontracts
Austin Evans
in my ass
Elijah Robinson
Damn, you know your shit. I appreciate the research you've put into this
Tyler Allen
467
Nicholas Stewart
Gotta admit almost tldr'd after skimming the first post but I'm glad I stuck around. I can't think of anything else that cant be replicated in crypto besides btc (longest chain) and chainlink (first mover, network effect).
Robert Williams
>nstead of Amazon's middleman services being rare, they will be easily replicable. This is important to understand over the coming decades because you will need to de-risk if Chainlink does end up doing what it intends to do...
qualtity thread, can you expand on this part please?
Bentley Cook
It means that if you are rich because of a smart contract investment, it means smart contracts work. Don't sell your investment to buy stuff it will kill (unless intentionally as a hedge). When you sell Chainlink buy stocks or ownership in tangible real world goods and producers. Again, market speculation in this market is foolish. I do believe that Chainlink will have more value than ETH once smart contracts mature. Depends on the major drivers of price: significant network utilization and implementation of staking With both, very high With one up from here by an order of magnitude With none red flags This Thanks for this No 100k? Good on you
Noah Robinson
The more you think about the value proposition the more compelling it gets, so long as 1. No major legal issues with the smart contract use case specifically (this appears unlikely given the players and early buy in from law consortia) 2. The most critical initial data and API providers don't get somehow poached
There is a very real chance a large number of people here make it big if they have the discipline to stage their sells. The greatest irony is that the same reason they got rich (making the right decision without exactly knowing why) will be how they enjoy making it. In other words most here will do well by becoming rich, but not for the reasons they think they will.
Sebastian Scott
Amazon currently offers easy shopping and rapid delivery for higher prices and submitting to their data use agreements. A competitor could make an Amazon competitor without storage costs through shipping, inventory, ordering and payments APIs that essentially made every producer a warehouse for that seller or for cases in which that isn't practical, made warehousing just another integrated part of the smart contract
Alexander Sullivan
Why not cash out into diverse income-generating ETFs? They'll naturally adjust themselves as the market shifts.
Owen Edwards
Waiting is challenging because of the proportion of my net worth i have invested. I'm basically all in. It looks good, but there is still no absolute certainty
Ethan Rogers
Like drop shipping but handled through smartcontracts?
Adrian Sullivan
This is a reasonable but not optimal option. At current many of the most valuable publicly held companies are at risk to losing marketshare to smart contracts, if they succeed.
Indexing those companies not at risk may be wiser...
Liam Sanchez
This seems reasonable to me for a portion of what I cash out, I'll evaluate further when the time comes. I have my eye on other things like real-estate too. Some in precious metals, maybe fund a business.
I may also continue to look for tech start up gems too as an accredited investor. The mind boggles at the possibilities
Justin Nelson
If you have human beings that depend on you like kids you should deleverage If you're a single young guy start working on your social skills, it will help pass the time Like producer to consumer value exchange with the type of fulfillment (JIT production, dropshipping, local warehousing etc.) dynamic and automated as part of the underlying smart contract
Aaron Garcia
>Indexing those companies not at risk may be wiser That's an interesting idea
Eli Brown
No kids, i am in it until i make it or bust. I've done my homework and I think chainlink is probably the best place in the world to have my money parked right now
Justin Bell
Life really is great on the other side Wealth has the potential to really mess things up, but ironically the patience required to become wealthy generally excludes those who would ruin themselves. Life gets better in so many ways you didn't think of.
Sebastian Hall
If you see this become commercially available in the next five years, it was me Fair enough, good luck to us all
Joshua Garcia
Sounds like you could create a system of decentralized factories operating out of peoples' homes
Christopher Taylor
Ironically the actual manufacturing of goods would be one of the parts of the value chain least likely to change significantly. Efficiencies of scale prevent small batch production for most consumer things, even if there was a will otherwise.
Services on the other hand...
Jaxon Watson
$1000 eoy!
Bentley Cox
I am not so sure that chainlink will be the way banks interface with blockchains. Why can't banks interface directly with blockchains? why go through chainlinks network? Is it because it has to be tamperproof to transfer money to different bank accounts through TEE? Everything can eventually happen on the blockchain. At that point, there will be no reason to use something like chainlink. Chainlink will only ever be relevant during a transition period. Blockchain lack is privacy. That is the major thing that is holding it back. Privacy prevents most businesses to operate on blockchains because when their information becomes public it loses its value. Long term I would rather put my money in a privacy blockchain than something like chainlink is really just only another middleman and middlemen represents a cost.
Jose Barnes
...Anonymous (ID: 76FqLDIZ) 08/04/19(Sun)18:06:24 No.15112598 >I am not so sure that chainlink will be the way banks interface with blockchains. Why can't banks interface directly with blockchains? lmfao bro do you know the whole point of chainlink is what you said above. banks love chainlink because they can still use their old gay legacy systems but yet interact with the modern world thru the chainlink network, its an adapter they put on their api fucking retard
Robert Collins
Read the first few lines of this rambling undergraduate garbage and decided to save myself any further time.
Brayden Nguyen
>I'm saying when you do this, don't buy the very assets that Chainlink will likely undermine. Big brain plays. Good job thinking ahead, user. I spend my moonboi fantasy time trying to do the same.
Gavin Perez
>so-called value investments are just those with a larger distribution of likely events around the less extreme outcomes. Agreed
Charles King
I apologise for my outburst. Nice thread.
Tyler Adams
banks will do whatever is cheapest for them and gives them a competitive edge. It is always cheaper to not use a middle man. Jp morgan is already implementing their own cryptocurrency, many will follow suit, legacy systems won't last for very long
Hudson Sullivan
>it’s a faggot write a lot of bullshit episode Thanks for the lesson I guess, Vishnu Buffet.
William Martin
which is chainlink LMFAO
Zachary Richardson
based thread, thanks t. author of the ‘welcome to the trust market’ pasta (opinion if you have read it?), Lt. General tier holder
Lucas Ross
Learn to type in english you absolute pedantic pseud
Carter Cooper
Yeah let’s not try to ever have any kind of intelligent or stimulating contributions to any threads. Hurr durr Chainlink $1000 eoy.
Luis Thomas
Probably not this year, but eventually You should look more into the roots of the project And a method to comply with PSD2 And yet you chose to post It is important to dream sometimes Cool No problem and welcome You keep digging Very welcoming sir At least a very high likelihood I think I have read it, would you mind posting here? A fair few grammatical errors I'll agree Either way its fun Its just more fun this way
Michael Jenkins
what is it that you can do with chainlink that you can't do with blockchain alone? the answer is nothing. is its privacy? off-chain computation? in that case, then chainlink have many competitors, so why chainlink? there is no oracle problem if everything is connected to the blockchain (which it will be) think about yourself, if every device reports to the blockchain you can compute the aggregated result on the blockchain and it will be much safer and cheaper than going through a third-party (chainlink). it is easy, I could write a smart contract like that myself, take the mean of x number of other smart contracts and use that to trigger my other contract, it is not hard
Xavier Parker
LINK $1000 eoy
Ethan Ross
Thanks fren just bought another $1k worth of LINK
Henry Clark
Are you forecasting growth in gigs? Mom and pop services, since shops clearly aren't going to be coming back soon.
Samuel Morales
i missed the early link train but im split between link/rsr, any opinions on rsr?
Kayden Wright
The FUD has gotten way worse in the last few months, I blame Google.
Jacob Ortiz
THANK YOU BASED FLANNEL MAN
Dylan Green
Without Chainlink there is no financial incentive to connect your thing to the blockchain and sell it to others who need that thing. One day
Off for drinks, have a good night all t. faggotniggercumdumpsterlarper
William Mitchell
Praise Sergey
Blake Bell
No prob No, in producers of material goods and services that can't be easily replicated Can an RSR competitor be made using the Chainlink network? Can a Chainlink competitor be made using the RSR network? Stupid people gonna stupid Definitely not Sergey but he strikes me as a good person
Lucas Nguyen
Enjoy your drinks based faggot larp
Wyatt Parker
cbf searching warosu, someone posted it to reddit (without formatting...)
Which blockchain? Do data providers need to plug their data into EVERY blockchain? No, because you’re a brainlet. This is why chainlink is the internet of blockchain, so people and companies can use whatever blockchain they want (AND THERES A LOT OF DIFFERENT ONES!) but still ensure data is reliable through chainlink.
it all sounds like a lot of gibberish to me. Cool fancy words that make you look smart and know it all, but you don't know shit, you are probably just as dumb and ignorant as I am. The truth is, the only practical thing that has been done with chainlink up until now is to integrate weather forecasts into cryptokitties. its crap, it stinks, and its worth my ass. Still bought in though, but I will sell as soon as the fucking normie shitstorm will come back after the halvening. And they will come back, o yes, greed never loses.
there is you stupid fuck, put your data in a secret contract and sell it to others, chainlink does not even have secret contracts lol, so if you use chainlink you are screwed, because chainlink will publish your data straight away on ethereum and everyone else can copy it, great, just fuckign great
Jaxson Harris
ill put some more thought into this thanks for the response
Matthew Sullivan
What are your sell points and what point is there to sell with staking and an ever increasing price rise of the token as the network increases?
have you ever heard of interoperability? it won't matter which blockchain you are are using, all the blockchains will communicate with each other seamlessly. chainlink is not the fucking internet, the internet is decentralized, why do you want some shitty centralized service in the middle?
Dylan Sanders
Kek youre fucking stupid. Plus coming to a chainlink thread talking about secret contracts make me think you’re a salty enigma faggot. Go back to plebbit to circle jerk about “interoperability” and other worthless business buzzwords. Data is the new oil and there’s only one decentralized network that can transport that data SECURELY and TRUSTLESSLY. >interoperability? Lol
to answer your question in your earlier thread. the layers that will increase in value over time are the oracle and possibly arbiter layers. oracles will always be scarce. and you will always need arbiters to double check things. producers and buyers won't change too much. smart contract platforms will eventually plateau. so to make a shit ton of money, you'd want to target the oracle and arbiter layers. chainlink captures the value of oracles. can't really think of anything that captures the value of arbiters. pretty sure it doesn't even exist yet.
Easton Morales
it is not about transporting the data securely if you think that you are severely misinformed it is about being able to sell the data and to interface with legacy systems those are the two reasons 1) if you have secret contracts, you can sell the data using those (so chainlink is not needed here) 2) there won't be any legacy systems, so there will be no reason to communicate with them chainlink is an inferior product and won't last long but I wish you the best people will just call it "THE BLOCKCHAIN" just like we say "THE INTERNET" today, interoperability and hashlocking is the future
Adam Roberts
>there won't be any legacy systems, so there will be no reason to communicate with them
Landon Diaz
yes, everything will be on the blockchain, meaning everything will have a private key every device will have a private key every human will have a private key every organization will have a private key every piece of data will be associated with a private key anything that has a private key is able to communicate with the blockchain itself, it does not need chainlink to hold its hand
Brayden Walker
It absolutely is. That’s what allows smartcontracts to self execute based on future events.
Cooper Rodriguez
let's say we have the AXA airplane use case let's say that the airplane has a private key the airplane writes the time to the blockchain when it lands and lifts if it lands too late, you get an automated insurance payout
WHERE IN THIS FUCKING PROCESS DO I NEED MOTHER FUCKING KEKLINK?
Adam Foster
What’s the incentive to just put everything on the blockchain? Chainlink enables data providers to monetize the demand for their data. Or do you think we will just live in a communist utopia where making money doesn’t matter to anyone anymore? Because that’s cute
Colton Ortiz
Right there in the middle
Thomas Wilson
This
You don’t seem to get it that chainlink is how you write a real world event onto a blockchain. The blockchain doesn’t just reach out directly to the airplane/airline. If it did, there would be serious problems with the blockchain achieving consensus
Alexander White
And chainlink isn’t just a new technology, it’s a way to base computer systems on human trust so that it can’t be corrupted. It’s a huge shift in reliability, security, and trust. It’s effect should be seen across society and become a new standard for 40-50 years at least just like some of the boomer era shit lasted that long. It will be a new level of /comfy/ for people to operate on.
>Only because I fucked your whore mothers gaping whore asshole so many times turned me gay great input, thanks for sharing. everyone take notes this guy is legit
Jonathan Hughes
I'm so fucking bored waiting for this inevitable moon. Look at picrelated TOP 10 VOLUME WITH A GOOGLE PARTNERSHIP AND A PROBABLE FACEBOOK PARTNERSHIP Fucking all discussions are redundant Unironically miss the days when we didn't have any tangible info Can I be a millionaire already? Why the fuck are people so slow to buy this up?
> Chainlink enables data providers to monetize the demand for their data. you can use secrect contracts for this, much better because you get so much more, the contracts have logic you know > What’s the incentive to just put everything on the blockchain? If most things happen on the blockchain, it will be on the blockchain because of necessity, because that is how our society will function. Most data will just be public unless you use something like secret contracts.
