Epistemic status: may or may not make you a bajillion dollars. Tots not investment advice.

These are my summary notes on John Pfeffer's An Investor's Take on Cryptoassets [December, 2017] and and one "SquishChaos"'s [aka Nikhil Shamapant] Etherium, The Triple Halving [April, 2021].

You may know of the Squish report as the source of a spicy $150k price prediction for Eth. My friend mentioned that it was being well-received by people in the finance industry, so I decided to take a look. By my own (financial neophyte's) judgement it seems reasonably sophisticated, decently-reasoned and has compelling, time-sensitive predictions. I think reading Squish alongside Pfeffer is productive, as they have different foci and [potentially?] different conclusions. There may also be a conflict in their analysis of the impact of Proof of Stake on network value (and, ultimately, token value) which I'm curious to see folks unpack here.

Both are well-written, light on the jargon yet informationally dense, but not oppressively so. I was able to do a read-skim of both such that I got a Pareto 80/20 in a few hours. I'd highly recommend taking a look at both if you find these summary notes interesting -- my goal here is to provide a scaffold of their arguments, such that interested parties can have a conversation, rather than to reproduce them in detail.

I've inserted my own questions throughout this document -- I have more questions than opinions at this point.

An Equilibrium valuation model of crypto

Note: Unless otherwise noted, pull quotes in this section are from Pfeffer.

Pfeffer provides an equilibrium approach here, asking what the steady-state valuation of a crypto asset will be. He provides a simple mathematical model:

$M = \frac{P Q}{V_{e l o c i t y}}$

where M is the money supply, PQ is the sum of the product of the Price and Quantity of resources consumed by the currency (ie, compute PQ + bandwidth PQ + storage PQ + watts PQ + dank memes PQ, dank meme-lords PQ, etc). If T is the number of tokens that have been issued, we have a sweet little model for valuing a token: $V_{a l u e} = M / T$ .

Pfeffer is primarily analyzing Bitcoin and Etherium here and seems close to being a bitcoin maximalist. Writing in 2017 he's quite skeptical of Etherium as an investment vehicle. Proof of Stake [PoS] was already being discussed in 2017; he models the outcome as follows:

Because PoS is dramatically more computationally efficie

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