DESCRIPTION OF BLOCKCHAIN APPLICATION: LBRY is a content sharing platform built on a native Blockchain. It aims to connect content creators to content consumers directly and payments will flow from the latter to the former through LBRY Credits. I like this cryptocurrency as it is based on a solid use-case.
MAIN USE-CASE: Using Blockchain to disrupt the Paid-Content Market.
TOTAL DEMAND: The Paid Content Market in 2017 is estimated to be USD 180 bn (source: article byJuniper Research). This includes digital content like videos, music, games, articles etc. LBRY intends to target this market and capture this value. Owing to strong incumbents and being conservative, we can say that LBRY might be able to gather upto 10% of this value in due course. Also we can ignore growth of this space to be extra conservative and get a as-is-where-is value.
TOTAL SUPPLY: 1 bn. LBRY Credits will be available at the end of 20 years of the project.
RISK FACTOR: A lot of risks exist in this project.
Regulatory Risk: Low, as closed application of credits suggests productive use of cryptocurrency.
Utility Risk: Low, as there does exists a strong use-case based on the core advantage of the Blockchain technology, i.e. decentralized and hence cost effective.
Platform Risk: Medium, as the Blockchain itself does not seem risky. However, certain features like an ongoing public action of domain names on the LBRY network is a risky one for content publishers.
Execution Risk: Medium to High, as though LBRY has a strong team, it will have to face powerful incumbents to gain market-share. Competitors like Netflix, Spotify, Youtube, iTunes etc. have established a very string foothold built on strong content and excellent customer experience. Getting market-share from these companies will be tough. However, small content creators might find it useful to go with the LBRY project in return for more control over the returns on their content. Slowly, this trend could pick up and spread.
Based on the above, the Risk Factor for this startup can be (0.67+0.67+0.33+0)/4 = 0.41
TARGET PRICE FOR LBRY CREDITS: 180*10%*0.41/1 = USD 7.51*
(*I do not have any LBRY Credits. This is purely my estimate for this cryptocurrency and I arrive at it using a very simplistic approach.)