Recommended value: does it really make sense?


Here we are finally talking about one of the most discussed topics in the world of Bitmonds: the recommended value.
 

So, what is this recommended value? To answer this question, let's take a look at this picture


It is immediate to understand that the recommended value represents a number which should represent the value of our Bitmond.


At this point one question arises: is the recommended value the same as the real market value of my Bitmond? ABSOLUTELY NOT!!!


The reasons that I will explain in favor of this thesis are multiple, the first is connected to the following question: if the recommended value is essentially a number, how is it calculated?

To assign this recommended value to each Bitmonds, the project founding team used a numerical algorithm: an algorithm is a mathematical formula that can be more or less complicated. So how is this formula structured? Unfortunately being owned by the developers of the project we cannot know its exact form, but only its generalities which were described in the project whitepaper. This formula assigns a value, to the various purities, IDs and crowns which are different according to each Bitmonds (for example Bitmonds with purity D, crown 1 and low ID will have higher assigned values ​​than Bitmonds with purity G, crown 2 and ID high), these values ​​once assigned do not change, that is, they are constant. So at this point you will wonder, if once you have chosen a Bitmonds and you assign these values ​​based on its purity, ID and crown, but they do not change, how does the recommended value constantly increase? The answer is simple, you need to introduce a variable in the algorithm, which in the original algorithm is linked to the number of generations. This means that by generating Bitmonds the value increases, if you do not generate Bitmonds the value remains constant.


So if we keep generating Bitmonds for years and years we will be rich? Obviously not!! This fact is related to the first reason why the recommended value should not be confused with the market value. All tangible, intangible or in this case digital goods which are exchanged in a market, have a price which is determined only by a very simple rule: the law of supply and demand. If many people want to buy a good (strong demand) this good will increase in value if many people want to sell (strong supply) then the value will decrease. There is no mathematical formula in any market in the world that can estimate the value of a good exactly, even more there is no product that, as it would be deduced from the original algorithm, can only increase in value! So I hope that you start understand that it is really absurd to treat this recommended value as the true market value of a Bitmonds.

But the motivations are not over: let's try to assume  that by some miracle we really managed to find a mathematical formula capable of estimating exactly the value of a Bitmond once we know its purity, ID and crown ... Are we not neglecting perhaps the most important factor? The rarity ... In fact, since this algorithm was programmed before the start of the Bitmonds generation, and being the generation random, it was impossible to predict which were the rarest Bitmonds, so this factor would still be overlooked, making our magic formula almost useless.


Furthermore, the direction of leaving the value of a Bitmonds to the law of supply and demand also seems to be the idea of ​​the creators of the project, thanks to the opening of the free market.


But if you are not yet convinced of this thing I want to leave you a visual example that in this case is perhaps worth a thousand words.


 

If you have read the previous sections of how much is my Bitmonds worth I'm sure you are already laughing.


And what do you think of the recommended value? Write it in the comments below.

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