Thread by @JMFayal

I get a kick out of the long term price predictions for $HNT (@helium) that I see all over the web. In short, they're bogus.

Thread on why HNT (currently ~$4) is either going to be a 3 to 4 digit token or worth zero👇 #cryptocurrency

The predictions will be like $30 or $40 or whatever in 10 years, but that completely ignores the one or zero nature of the platform. If helium 'works' the market is massive. Like many billions of $ of IoT data transfer spend massive. /2

To simplify the Burn-to-Mint Equilibrium (BME) that drives the economics of HNT, the long term price of the token MUST be $20 per $1 M per month of data transfer spend on the network. If it's not, BME will deflate the currency circulation until the relationship is restored. /3

The $20 per $1 M ratio was defined in HIP-20 (which I co-authored with @rawrmaan @TusharJain_). After multiple halvings of the HNT mint rate in the years to come, the HNT minted will be equal to the HNT burned to create data credits (used to buy data bandwidth on Helium). /4

At that point, there is a 'max' cap of approximately 50k HNT recycled from burnt HNT. If more than 50K HNT is burnt than the extra will not be recycled and will be removed from the system forever and reduce the eventual max supply of tokens (~230 M now but will decline). /5

In order for HNT to not be deflationary the price of the token multiplied by the number of tokens minted must equal or exceed the amount of dollars spent on data transfers on the network. In other words, 50k * HNT price >= $ data spend. /6

Based on the above, $1 M of data spend / 50k max longterm HNT mint = $20 HNT price. Given the size of the market and the new opportunities made feasible by wide scale Lorawan coverage (and possibly other protocols that can be built on helium like CBRS) /7

there is little chance that the network will sit at $1 M or $5 M or $10 of data spend per month. Either the gateway network is ubiquitous, provides reliable data transmission and is adopted by large scale operators (many use cases: GPS data, industrial sensors, agg, etc) /8

that spend hundreds of millions or billions on data transfer per year, or it doesn't and the data spend remains very low (sub $100k a month). With the network expected to surpass 100k gateways this year, the trend towards ubiquity and reliability is promising. /9

Soooo... the long term price of HNT can really only go one of two ways. Either the 'intrinsic' value remains very very low, or it's a 3 ($5 M+ per month data spend) to 4 ($50 M+ per month data spend) token. There aren't really any other options. /10

In reality, speculation will drive the price significantly higher than the 'intrinsic' value, because that's what markets do. They forward price cash flows. /11

I skipped over or simplified a lot there, but feel free to ask any questions and I'll do my best to clarify.

#thepeoplesnetwork #helium #crypto