When we value the shares of a growing company, we discount our expectations of future cash flows based on the expected growth path of the business in acquiring customers, building its team, building out its infrastructure for delivering value to customers, developing its technology or products, etc. at some discount rate that reflects our assessment of how much risk there is around the realisation of those expectations. This means that a company’s shares can be overvalued at price x at time t0 but undervalued at the same price x at time tn. To frame this with an example, it is not necessarily inconsistent to say that Amazon was overvalued at $107 per share in 1999 even though it trades at $1,162 per share in 2017. Amazon has grown exponentially and navigated tremendous risks while competitors have progressively ceded market share and while the economy and the markets Amazon serves grew over those 18 years. If you had bought shares when they first peaked around $107 in December 1999 and held them until December 2017 at $1,162 per share, you would have made a 14% annual rate of return. In hindsight that would have been a very good investment, but there are a lot of other companies you could have invested in at 1999 prices that would have been bad investments and it was very difficult to know a priori that Amazon would be an exception. A 14% return arguably wasn’t all that great, or certainly not excessive, based on a reasonable assessment of the risks in 1999. If you had sat down at the time to do a DCF valuation of Amazon in 2000 and were discounting a set of financial projections reflecting what actually happened, you would have reasonably applied a higher discount rate than 14%. You could have earned a similar return investing for example in a fairly pedestrian diversified leveraged buyout fund with arguably much less risk of loss of capital. What does all this have to do with how long it could or should take a cryptoasset to appreciate in price? Similar to the shares in a company36, the growth of the value of a utility protocol (including a payments protocol) should accompany the growth in the number of users, volume of use/transactions, buildout of the network (for example, merchants accepting a particular payment protocol or the installed base of IoT devices running a kind of smart contract), progress in following any development roadmap, etc. So, when we say ETH should be worth $52 billion 10 years, we aren’t saying it should be worth $52 billion today. Lots has to happen to make it worth $52 billion in 10 years. Accordingly, you should discount the $52 billion back to the present using some discount rate reflecting the perceived risk of that actually happening, versus something better or worse. A monetary store of value protocol works completely differently in terms of the potential (or even appropriate) timing and pace of price appreciation. Provided a monetary store of value protocol and the network running it is technically capable of acquitting its function as a monetary store of value (as arguably is already the case of BTC), the pace of it reaching its mature equilibrium value is as fast or slow as the pace of collective mindsets seeing it as such. This could take centuries or only as long as it takes synapses to fire. The value of a bar of gold or of a Picasso at a point in time is simply the value we collectively assign to it. Of course, that value might still evolve over time along with the accumulated wealth of our society and the size of our economy, but it is decoupled from some path of growing cash flows or expected cash flows. If we relate this back to the potential equilibrium value of a dominant non-sovereign monetary store of value, there are two distinct steps, each of which could take a very long time or only days/weeks/months and with a long or short hiatus between the two. Of the overall potential value estimate of USD 4.7 – 14.6 trillion, USD 1.5 – 4.7 trillion is based on private sector holdings and USD 3.2 – 9.9 trillion on public sector holdings. The first step is 36 The analogy to equity is used narrowly here in the context of price appreciation. As discussed above, utility protocols are akin to money supply, not equity, in other respects. 24