Value of the Stellar Currency
Stellar is fascinating. I’ve spent much of my day today learning everything I can about it.
I’m curious about what the total value of the currency is worth at this beta beginning. There’s a couple answers:
1) Stripe made a $3,000,000 loan to Stellar to fund initial operations. Stellar repaid this loan using 2% of all stellars*. This means $3MM / 2% = $150MM stellar market cap.
2) On reddit people are offering the following conversion rates:
- 4000 stellars for 1 hr of full-stack dev consulting work. 1 hr of a dev’s time =~ $100. So, that’s a 40 stellar : $1 ratio. There are 100 Billion stellars in existence. Which implies a stellar market cap of: $2.5B.
- Paying $2 for 5000 stellar. So that’s a 2500 stellar : $1 ratio. Which implies a stellar market cap of: $40MM.
Both of those are only offered rates. Nothing has actually transacted at those prices as far as I can tell. So, they represent the bid side of the bid/ask spread.
3) Stellar.org is giving away 19% of all stellars to owners of Bitcoin. This ratio implies a value of 1450 stellar : 1 BTC, which is a 2.4 stellar : $1 ratio (using today’s BTC price of $601.97). Which implies a stellar market cap of: $41.5B
This last # is pretty fishy because you don’t have to actually exchange your BTC to get your 1450 stellars… it’s just a gift for being an early supporter of bitcoin. So, it’s not really a conversion rate.
In conclusion, what is a stellar actually worth? Whatever someone will pay for it. Which of these valuations holds the most veracity, I guess the $150MM number… although $3MM is really just option value to Stripe, so it’s not perfect. The best valuation metric would be to know the salaries being paid in Stellar, compared to market rate alternatives.
* lowercase = currency unit. Uppercase = the non-profit company.
I’ve been taking the Cryptography class on Coursera recently, taught by Dan Boneh. It’s terrific… just difficult enough to be a fulfilling challenge, but easy enough that I haven’t churned (yet).
We recently studied a practical application of the Cipher Block encryption methodology called Cipher Block Chaining (CBC). Here’s a diagram from Quora that articulates how CBC works:
It immediately reminded me of the bitcoin blockchain diagram from Santoshi’s original bitcoin white paper:
The key relation in both images that the output cipher from each round of encryption is fed into the input of the encryption of the subsequent round, to create a chain. It’s very elegant. I never knew the origin of this structure before… and I’m sure its roots go back beyond CBC.
I love moments of abstraction connection like this… this is why I take Coursera classes. They’re very academic, which doesn’t seem useful at first, but I find they make me look at my day-to-day interactions through a new lens, which spurs serendipitous moments of creative connections I would otherwise miss.
Project Hieroglyph Close to Release
In 2011 Neal Stephenson penned an essay called Innovation Starvation about our current stagnation in accomplish big honking technical marvels. He is not alone in this worry, a classic fear often ascribed to pessimistic curmudgeons that pine for the good old days, but unlike that stereotype, Stephenson’s essay is great because it present a path forward, led by sci-fi.
The primary reason I read sci-fi is to be inspired by what’s possible, to view through a window a compelling and convincing possible future. Stephenson takes my interest one step further by saying that it’s sci-fi authors’ responsibility to create the hieroglyphs for future innovations. Hieroglyphs? Stepheson describes it best:
Good SF supplies a plausible, fully thought-out picture of an alternate reality in which some sort of compelling innovation has taken place. A good SF universe has a coherence and internal logic that makes sense to scientists and engineers. Examples include Isaac Asimov’s robots, Robert Heinlein’s rocket ships, and William Gibson’s cyberspace. As Jim Karkanias of Microsoft Research puts it, such icons serve as hieroglyphs—simple, recognizable symbols on whose significance everyone agrees.
I agreed back in 2011 when I originally read this essay, and the concept of sci-fi as hieroglyphs has been banging around in the brain every since. I saw a great quote tweeted out by Ian Hogarth today, quoting a blog post by Albert Wenger. He said, “[I]t is almost too easy to write a dystopia these days. The real challenge, it seems to me, is to write a new utopia.” Cue vigorous nodding in agreement, and the quote reminded me of Stephenson’s essay.
So, I googled the essay, and in the process of falling down the Internet rabbit hole, I discovered that the Arizona State University had partnered with Stephenson to create an organization dedicated to fostering the next generation of moon-shots, through sci-fi. It’s called Project Hieroglyph and their first anthology of fiction is being released in September. This sounds like a terrific read and I can’t wait to check it out.