Transsimian 
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RE: Vechain Thread
https://www.reddit.com/r/CryptoCurrency/..._a_minute/
Quote:VeChain (VET, The coin formerly known as VEN) is either overvalued or getting close to overvalued and I can prove it. Kinda. Maybe.
https://vechaininfo.surge.sh/calc/
https://www.reddit.com/r/CryptoCurrency/...e/ds2hrs0/
Let me preface by saying that I love supply chain solutions. I worked for years in the space, which is why I took an interest in VeChain (as well as other coins). Let me also say VeChain is not a scam. It's a legit project with great potential.
EDIT: This post is not about the team, China, or other intangible things. Of course we take those into account, but it's about basic mechanics and ROI as of today.
However, after researching the core concept in all of crypto: Why does the token have value? I’m concerned Vechain is overvalued
How does VeChain (VET) work in a nutshell?
VeChain works pretty simple. If you buy a VET, you are assuring yourself rights to obtain another coin called THOR. Each VET will produce 0.15 THOR per year. You can get bonuses for having a large amount of VET in one place (called Nodes). The bonuses increase as the amount of VET increases.
Having 10,000 VET would produce ~2,080 THOR per year
Having 50,000 VET would produce ~11,800 THOR per year
Having 150,000 VET would produce ~39,500 THOR per year
This is what VeChain calles “economic nodes”. They don’t do anything with regards to processing transactions. You have voting rights, but only 50% of the voting rights combined with all the other node holders.
Why do you want THOR?
You want the THOR, because that’s what the entities buy to power the VeChain blockchain (use services, whatever they may be). VeChain advertises services like ICOs, supply chain logistics etc. THOR’s value is completely determined by the market. A high demand for VeChain’s services would produce a higher priced THOR. Lower demand for VeChain’s services would produce a lower priced THOR. That’s why you are buying VET. To acquire THOR, sell it to things that need to use the VeChain blockchain, and make money.
Here’s where the problem starts: The current price of VET and the expectation of what VET can accomplish.
Today on January 6th, 2017, VeChain is trading at $4.46 per token. Let’s assume for the rest of our conversation, that it’s at $5.00 a token. A modest increase. It’s going to go way higher with the FOMO happening.
Let’s also assume three scenarios, all of them involving 10,000 VET. This gives you the base node and a bonus.
You bought at $0.20 per VET. Super low when VET was starting to get traction.
You bought at $2.50 per VET. A nice buy in that’s going to 2x.
You bought at $5.00 per VET. The soon to be market price.
Your buy in price is $2000, $25,000, or $50,000 for the node. Not including fees for FIAT → Crypto.
Each buy in spot is going to result in ~2080 THOR produced per year.
Keep in mind:
USA tax law, you’d have to HOLD this THOR for one year before you can sell it on the market to face large taxes.
Larger Nodes (50k+, 150k+ and transaction nodes) are getting a better THOR bonus then you. This means they can sell THOR a lot cheaper than you can. Putting downward pressure on the price.
Regular Holders (<10,000 VET) will suffer a significant penalty for not having a node. Only getting 4.2 THOR per day. Around 1530 THOR per year at ~ but <10,000 VET.
Here’s where it gets really controversial to me. This is from the post cited at the beginning of the my post.
With 867,162,633 VET in circulation, each generating .15 Power per year, the total Power pool per year will be 130,074,395. If we factor in the 30% bonus for master nodes (will pretend like this is year 4 and this 30% is a rollover from year 3), that means the total Power pool will be (130,074,3951.3) = 169,096,713. If the Power cost for all businesses running on the network in a year is a cumulative *$10 billion**, that means each Power over the course of a year should average a value of ($10 Bln / 169,096,713) = $59.13.
Let’s round to $60 for simplicity’s sake. At a whopping $60 per THOR, and in our 10,000 VET base Node calculation, you wind up with a yuge $124,800 per year. You’d wind up paying probably around 25% or $30,000 per year on taxes. Leaving you with nearly $90,000 per year + the VET you have. Impressive right?
Here’s the problems:
There is a 0% chance that VeChain will have $10 billion dollars in incoming cash even in the medium term. That’s an absurdly large amount of revenue. If you doubt that, compare that number to other companies. Amazon pulled in $125 billion this year. Sands Las Vegas pulled in $20 billion. Twitter was $2.5 billion. Novartis $40 billion. I'm not saying they can't make good revenue. I'm saying it's crazy in the first 5 years. Which is ETERNITY in crypto.
Let’s be more modest and target $1 billion dollars in sales. That's like every partnership Sunny claims doing big business on the vechain network.
That gives you a valuation of about $6 per THOR. In our node scenario, that’s about $12,500 per year. For the early adopter who paid $0.20 per VET, that’s still a fantastic return after taxes, but for someone buying in now, it’s not very good at all. You’re getting maybe 20% of your money back in a year, after holding for a year and paying taxes. Taking a lot of risk for that as well. We’re starting to get closer to classic index funds on a good year. That’s assuming you had $50,000 to drop in the first place. The numbers get even worse for non node-holders.
Again this is the fundamental problem of VET. It completely depends on high sales and demand for the VeChain product, but it also depends on your buy in price. If you buy at a very high VET price, say $10 per VET, because of speculators, you’re never going to make that much money, and could easily lose money before you even have a chance to sell your first THOR.
Now I know that VET has some impressive partnerships. But that’s all they are now. Partnerships. There is no one purchasing THOR yet. We have no idea what the demand for THOR will be. This token also has competition, and that will further squeeze the margins for VET holders, especially those with the least amount of leverage.
I really could be wrong. I hope I am. I don’t want anyone to lose money. I love crypto, But VET’s entire premise is a bit spooky to me. I think $0.20 was an amazing buy. You’ve not only made shit tons of money from the gains, you’ve got a real chance to make huge returns on a regular basis, even in the first few years.
There are some people trying to compare this to “dividends” as well. Stating that it’s absurd to expect large percentage returns from VET/THOR. Well, that’s your strategy then so be it, but I don’t think it’s even remotely justified with the amount of risk you’re taking. Having your investment “pay off” in 5-10 years in crypto is...insane to say the least. This market is rapidly changing. Anything less than a 10% return per year starts to not make any sense.
I’m also concerned with the general lack of knowledge about the tokens use. It appears like many VET token holders don’t even realize this is how the system works. I’ve also had incredibly hostile responses from VeChain advocates before...
Including today’s top posting OP. /u/NTSpike . A guy who has less than a month of crypto posting experience and deleted his posts calling me names and being a general asshole.
Buying a node right now at $5 a VET and up? It’s crazy risky. You’re betting a lot of money on something that may work, but may not have the numbers you want to see. By the time it does, you may have serious competition as well.
Avoid the FOMO and do the math on VET. Use the site I posted and think about a realistic number for the price of THOR. I’m not saying it’s bad, or good, or whatever. I honestly wished I bought VET instead of Modum when it was 20 cents. I made the wrong call. But I would be selling right now.
Please keep your replies civil. PARTNERSHIPS != SALES. I gotta say, that’s a classic salesman tactic to say “I’m in bed with this person though”. It doesn't fucking matter until they buy THOR.
Thanks for reading.
I'm still hodling as I expect the price to continue to increase due to people's enthusiasm
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(This post was last modified: 01-08-2018 12:09 AM by Transsimian.)
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