Devcoin Future Value

What will the value of devcoins be in a few years time? My view is that it could be significantly higher than it is today, even if the value of the bitcoin goes down. Read this article to find out why.

It seems to me that the devcoin value in the future is likely to be tied to the value of the bitcoin. So really the starting point is to examine what the value of a bitcoin might be.

There are 2 things which give any commodity value, and those are rarity and desirability – or in the more usual jargon supply and demand. The supply of bitcoins is well known. There are currently around 12 million in existence, and there is a theoretical maximum of around 21 million bitcoins that can ever be created. So let’s say that in the future, when all bitcoins are out there, if the demand for bitcoins remained the same as it is today, each bitcoin would be worth approximately half what they are today – this equates to a figure of $400 at current prices.

The problem is to know how the demand for the bitcoin will change over the course of time. I think there is a strong argument to suggest that the current price is the result of a speculative bubble – it is a similar situation to how internet stocks performed in the early days of the internet – these companies commanded huge stock market valuations based on very little indeed. Inevitably the crash came, and when it did it came big time.

In the short term I am fully expecting this to happen to the bitcoin value. The value has soared from a few dollars per bitcoin only a few months ago to over $1000 very recently. It would not surprise me in the slightest if it went back to say $50 a bitcoin in just a few months. It is certainly not guaranteed that this will happen, but it does seem likely.

But that is the short term scenario – the big question is what then happens long term. The sudden increase in the value of the bitcoin recently has certainly served one purpose – suddenly everyone has heard about them, and some of these people may decide they want them – if that happens it pushes up the demand for bitcoins, and if that happens the price will go back up.

What gives Bitcoins Value?

Intrinsically a bitcoin has no value whatsoever. There is no government or other security backing it. Nor is it tied in any way to any physical commodity. The only reason it has any value is that sufficient numbers of people have decided that it has value.

Once this situation is reached (and it does seem to have been reached with the bitcoin) then the value is to an extent maintained by the fact that this is now an asset into which traditional (government backed) currency has been invested. At this point it starts behaving like any other asset – the price will vary with the trading activities that go on. People do not like to sell their investments for significant loss, they will hold on for a better price. That decreases the supply and eventually there comes a point where supply and demand balance out.

For the purposes of this article I am deliberately taking a negative view of the level at which bitcoin value may eventually settle. Let’s say it settles at around $100.

How does this affect Devcoin value?

This is where it gets interesting. The devcoin is a cryptocurrency which operates in exactly the same way as a bitcoin. It is possible to exchange bitcoins for devcoins and vice versa. Ultimately this means that in terms of desirability there should be no difference, long term, between bitcoin ownership and devcoin ownership. At least that is what logic would dictate. However, we have to accept that there is a subjective factor here. Bitcoins (at least today) are far more high profile than the devcoin and this increases their desirability.

I am going to make the assumption that in the long term bitcoins have 10 times more desirability that devcoins.

We can now work out what this means for the future devcoin price, based on the assumptions I have made. I am going to consider the possible value 5 years from now.

The number of bitcoins in existence by then is a slight unknown, but we do know it will be somewhere between 12 and 21 million. I am going to use a figure of 18 million.

The number of devcoins in existence by then is slightly easier to judge – there are a fixed 50,000 devcoins per block and this does not change. At the time of writing there are 122000 blocks which means 6.1 billion devcoins. A new block is discovered about every 10 minutes – over the course of 5 years this will mean an additional approx 13billion devcoins.

So the ratio of devcoins to bitcoins will be 19.1 billion / 18 million = 1061 ie approx 1000

There will be about 1000 devcoins for every bitcoin. Using this value, our assumed desirability of devcoin relative to bitcoin and our somewhat negative prediction for the bitcoin price, we can work out the value of a devcoin as follows

Future Devcoin value = $100 * 1/1000 * 1/10 = $0.01

Each devcoin should be worth about 1 cent. Let’s compare this with the value at the time of writing which is (according to vircurex)

Current Devcoin value = $835 * 0.00000052 = $0.00043

So my prediction for future value of devcoin, even based on the fairly negative assumptions I have given is around 23 times the value today. It is looking like a pretty good investment to me!


The potential spanner in the works with all of this is the current proliferation of more and more new types of altcoin. These are springing up all over the place. If all these altcoins survive they are increasing the supply of cryptocurrency in the market which will result in a decrease in value. Since there seems to be no limit to these altcoins, the effect could be extremely marked.

I am not sure what is going to happen in regard to this, but I do think that since the appearance of too many altcoins is likely to be detrimental to the cryptocurrency community, that something will happen – they will all either die out due to lack of interest, or some steps will be taken to purge them.

Of course devcoin itself is an altcoin, so you could argue that it is part of the problem. However, I do think there is a place for the more established altcoins to continue to exist, if for no other reason than it gives the cryptocurrency traders for more opportunities for trading. For this reason, I am looking at the set of cryptocurrencies currently traded on vircurex as being the set of currencies that will survive. And of course devcoin is one of these…

Devcoin | Cryptocurrency

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