Ben Davenport, the founder and CEO of BitGo, made calculations and then concluded the value of payment utility in crypto can only worth three billion dollars, responding to comments made by CEO of Civic, Vinny Lingham on twitter.
In the post Lingham wrote about utility value of a cryptocurrency and noticed its importance as it ensures a baseline level of demand, once speculative demand disappears. Davenport argued that this value created purely by utility was actually so small as to be negligible in the portion of the overall value of a currency. After some tweets, Davenport laid out his mathematical reasoning.
Ben Davenport theorized about what would happen if payments Visa unveiled its own digital currency. His explanation followed that at the end of dividing this all down the base line value created by utility was left at just $3 billion.
Through this reasoning Davenport also added: “A HODLer choosing to hold a coin for even a month is 720 times as effective at generating base demand as the payments use case in your example…”