We wanted to make an estimate of the PressCoin economy across different parameters between the years 2018 and 2022. This was no easy task and we iterated over this multiple times, and finally settled on the following parameters as the growth metrics that would define this ecosystem: Gross Merchandise Value (aka the much abused GMV), Gross Domestic Product (GDP equivalent) and Monthly Average Users (MAU).
Gross merchandise volume
is a term used in online retailing to indicate a total sales dollar value for merchandise sold through a particular marketplace over a certain time frame.
We explain below how we came up with the projections over the 5 year period… questions, comments, feedback are much appreciated! This is a top down analysis and is based on mere disruption of existing markets. However, we strongly feel that PressCoin will enable new markets and new revenue streams, and thus the economy enabled by PressCoin is larger than that estimated in this exercise.
Gross domestic product
) is a monetary measure of the market value of all final goods and services produced in a period (quarterly or yearly) of time.
We started with the size of the global media and advertising market, which is estimated to be between 700B USD and 1T USD in 2018.We work with the conservative estimate of 700B in this exercise. This is the market which is ripe for disruption and we assume that in 2018, we will capture only a really small portion of this market: just 1/10,000 or 0.01% = 70M USD. We start small, but as they say, well begun is half done.
Before we launch into the full blown explanation, filled with dazzling projections and graphs (you know the fancy maths one which have arcane names like exponential curves, or make-the-y-axis-logrithmic-so-that-the-scale-is-compressed), this would be a good time to say Hi to:
If you are a potential token buyer, at this point you may as well be thunderstruck with the sheer audacity of what we have set out to achieve. Do you sense the vision, the ambition & the scale of what we are building, and the love that’s going into it? Yes?
Let us tell you a secret: many of the technologies / platforms / companies in that stack diagram are already built and launched, or are about to be launched. In other words, some of these are real today, unlike most ICOs which are based on future products. We have a sterling team across the world who are actively working on all these platforms. So the blueprint to scale and achieve is in front of us. Well then gentle reader, on to part 2, where we will convert the ambition into dry numbers for a projection chart we can proudly showcase on the ICO website.
We assume that the market size grows at a nominal YoY rate of 7%, starting at 700B USD. We aim to capture a small portion of the market in 2018, just 1/10,000 = 70M USD worth: in other words, 70M USD worth of transactions will be performed using PressCoin crypto-currency (more formally called NEWS tokens) in 2018. This then is the GMV in 2018.
At this point, one may well question why someone would move to transacting using NEWS tokens rather than existing fiat currency. This is of course the crux: We are betting that we will provide such immense benefits and stickiness to the producer AND the consumer, and hell yes, the entire supply chain, that entities would have no other option but to adopt and become part of the PressCoin ecosystem, which uses the NEWS token as its currency of choice. This is a large bet and we are determined to make it happen. The world has been waiting for true utility, nah PURPOSE, to be given to crypto-currency; what better purpose can an ecosystem have than to save democracy and thus reward all ecosystem participants?
With this small start in 2018, with new platforms being launched and new media properties choosing to become part of the PressCoin ecosystem, we see the standard network effect starting to take hold, and an immense acceleration of the PressCoin economy starts. The YoY growth has been modeled on factual data: early years of growth at many of the social networks, extrapolated for the starting systems we already have in place.
Thus we see GMV increasing to 33B USD by 2022, which is a CAGR (Compound Annual Growth Rate) of 365%. By way of contrast, CAGR at the various social networks have been between 71% and 507%, with Pinterest as an outlier at 4900%!!
Next we calculate a GDP equivalent of the GMV. Since PressCoin is an ecosystem and also a currency, we take help of a concept called velocity of money.
Transactions velocity of money
, is the frequency with which the average unit of currency is used in any kind of transaction in which it changes possession—not only the purchase of newly produced goods, but also the purchase of financial assets and other items
We assume that the average transactions using PressCoin will rise over time from 2 to 3 in this 5 year period, and hence the GDP equivalent in 2022 would be 3X the GMV = 100B USD.
With these calculations, we present to you a chart which graphically denotes what we have been talking about in this post:
PS: Note that these projections are NOT the revenue being earned by PressCoin PLC, the company managing the PressCoin ecosystem. We’ll estimate the revenue of the company in a follow up post.