Namecoin market ticking timebomb?

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smoothie
Posts: 34
Joined: Sun Jul 10, 2011 4:45 am
os: linux

Namecoin market ticking timebomb?

Post by smoothie »

At the current moment the namecoin block chain has 18,247 blocks that have been generated. Total namecoins that have been mined is 912,350 NMC of which 67,255.83 (http://explorer.dot-bit.org/) have been destroyed due to domain name registration on the TLD .bit. At the very most there currently exists 845,094.17 assuming no namecoins have been lost due to a corrupt wallet file etc, etc, etc.

The current exchange rate is 0.0292 BTC / 1 NMC (https://exchange.bitparking.com/main).

This implies that the entire namecoin market is approximately the equivalent of:

Code: Select all

845097.17 NMC * 0.0292 BTC/NMC = 24,676.74 BTC
Essentially one early adopter of BTC could buy up the majority of the namecoins with close to 25k bitcoins (assuming the price doesn't move much which is not likely).

The market cap of the namecoin market at this moment is:

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24,676.74 BTC * $14.02 /BTC = $345,968.03
Each namecoin is worth:

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$14.02 * 0.0282 BTC/NMC = $0.409384
With the merged mining update (http://dot-bit.org/forum/viewtopic.php?f=5&t=217) and domain cost decrease by 4 times after block 24,000 on the horizon (http://dot-bit.org/forum/viewtopic.php? ... 1&start=10), are we looking at a ticking time bomb on the namecoin market?

Also note that domain cost will be 0.01 NMC before the end of the year very likely with the merged mining and updates at block 24,000.

Thoughts welcome...

JohnDoe
Posts: 94
Joined: Sat May 28, 2011 8:46 pm
os: linux

Re: Namecoin market ticking timebomb?

Post by JohnDoe »

Sure, I see the value of NMC going down (sharply even) after 24k update, but only in the short run. In the long run I believe the value of NMC will surpass that of BTC because it's simply a more useful currency. In my opinion the only advantages of BTC are name recognition and infrastructure. I think the security boost from merged mining and the upcoming NMC/USD exchanges will make merchant more willing to accept NMC alongside BTC.
Essentially one early adopter of BTC could buy up the majority of the namecoins with close to 25k bitcoins
That is if the majority are actually willing to sell their NMC. Personally I don't plan to sell mine even at BTC parity.
(assuming the price doesn't move much which is not likely).
If someone tried to buy the majority of NMC it would definitely move the price, by a lot.
The market cap of the namecoin market at this moment is: $345,968.03
That's a pretty decent number for a project that is 3 months old in my opinion.

smoothie
Posts: 34
Joined: Sun Jul 10, 2011 4:45 am
os: linux

Re: Namecoin market ticking timebomb?

Post by smoothie »

Why would you not sell at parity?

JohnDoe
Posts: 94
Joined: Sat May 28, 2011 8:46 pm
os: linux

Re: Namecoin market ticking timebomb?

Post by JohnDoe »

I said it in the first paragraph... because I believe the value of NMC will surpass BTC. As more merchants start accepting NMC, Bitcoin will become proportionally less relevant and thus less valuable, as anything that can be bought with BTC will be buyable with NMC too. So all things equal, Namecoin edges out Bitcoin in demand because of its additional features.

gigabytecoin
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Re: Namecoin market ticking timebomb?

Post by gigabytecoin »

I don't see why everybody is worried about merged mining.

The creation rate of namecoins will even out within 1 month I can assure you, probably much sooner even. Then all we will be "stuck with" is tightened network security and less of an "early adopter problem".

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