1/ I’ve been thinking & reading history about MV = PQ a lot, and what other models would be more suitable for valuing cryptoassets and why.
2/ While the below article claims to debunk MV = PQ, none of its arguments particularly concern me as the Achilles heel of the Equation of Exchange in its use to value cryptoassets: medium.com/@AustereCapita…
3/ The piece does, however, set the stage for conversation around better equations, or more rigorous arguments around flaws in applying MV = PQ in this way, which I’d love to hear more of, and have mentioned before: 
4/ For me, the major constraint of MV = PQ is there are many moving parts & as of yet poorly understood assumptions that go into V, P, & Q to back out M. That said, DCF’s have a similarly large # of assumptions, they have just been refined over decades (arguably centuries).
5/ Secondly, MV = PQ leaves out the “trading economy," which I did purposefully but nonetheless ignores a large part of what drives the value of these assets currently. Yet, given the speculative and largely irrational nature of the trading economy I’m not sure it can be modeled
6/ Since I’m getting questions about the aforementioned article from Austere Capital in particular, to follow are my thoughts. Happy to be proven wrong on these, to the benefit of crypto, with more robust proof.
7/ First, claiming you can’t use an identity outside of “its original context and constraints” doesn’t make any sense. So long as you understand your assumptions, an identity is an identity and the math works for whatever variable you solve for.
8/ As @alexhevans has pointed out to me, MV = PQ can be thought of as Money Supplied = Money Demanded. Perhaps this can get away from clinging to how MV = PQ has been used in the past. Also worth noting how MV = PQ has been used over the last century has morphed considerably.
9/ Then, the claim that you can’t use USD in MV = PQ to back out a necessary M value in USD for a token is unfounded — authors just say you “cannot” do it with no explanation.
10/ Everything is priced in dollars (i.e., the world’s reserve currency), so saying an equation to price cryptoassets can’t use dollars is nonsensical.
11/ Austere’s circularity claim appears misplaced and is confusing to follow. Necessary monetary base, M, is solved by PQ / V, with the price of the token as a derivative of that M and *never* used as an input (which Austere claims).
12/ Circularity claim also mixes present & future. The M that matters & therefore token value that matters, is based on future expectations, which are discounted back. Part of this present value is supported by current demand 4 the token, but that's not how the token is priced
13/ Many of the summaries of how I approach things are wrong (especially the below image), and I don’t appreciate having words put in my mouth. PQ is divided by V, to get M. PQ is *not* divided by M, & networks have asset flows, *not* revenues, as I have stated time & again
14/ Last note, excessive use of snark detracts from the credibility of any argument, and is a waste of time for the reader. @BKoral_Austere and @anshumanaustere would do well to learn this if they want Austere Capital to be taken seriously.
