Bitcoin Forum

I am confused as to why the bitcoin market cap is published to be (today) about $175 billion.  This is calculated by multiplying the current bitcoin price (~$9500) by the number of bitcoins mined (18,406,000).  Yet it is believed that approximately 30% of all bitcoins ever mined have been lost.  if a private key to a bitcoin address has been lost, then the bitcoin in that address should, in my opinion, be erased from the market cap.  It is published in articles that a bitcoin market cap of $1 trillion would equal around $50,000 per bitcoin.  This is a substantial underestimation.  If you factor in a 30% loss of bitcoin, then a   $1 trillion market cap would equal around $77,000 per bitcoin.  Losing a private key is like throwing a gold coin in the ocean.  It can be argued that the gold coin is still there.  But for all intents and purposes, the gold is non-existent, because it would be impossible to recover.  The point I'm making in this post is that bitcoin is much rarer than published.  There are not 18.4 million bitcoins out there.  There are only around 14 million.

 I won't challenge your personal belief about the mined 18 million btc.
I agree that some are lost. Are there 14mill accessible who knows. I don't.

It's because the numbers and percentages of apparently "lost BTC" are just mostly theories and assumptions. We have no data to prove if the numbers are actually true, and it would be more inaccurate to change up the total marketcap using numbers that we are unsure of.

Who has the capability to know that?

And on what basis should we consider a lost Bitcoin really lost? It seems to me we certainly cannot tell whether a particular address has already lost its private key or not.

As a matter of fact, even an 11 year old dormant Bitcoin could move anytime. And it actually happened just recently.

Does it really matter if we have 18 million or 14 million BTC out there? For me it has no gauge whatsoever, and I don't know why people make things complicated. Those coins could be lost forever or it could be found by someone but I don't think it will have a significant effect on the market price. Having 21 million supply is rare already.

The market cap is kind of a silly number that we like to look at. If somebody tried to sell 10 million bitcoins they couldn't get the spot price, the price would go down a little bit for the first few bitcoins, then there would be less byers and the price would drop, eventually the price would drop down so significantly that I doubt the actual dollar value extracted would be 1/10th of the market cap.


Same goes on the other side, if someone had the entire bitcoin market cap worth of dollars, and tried to buy all the bitcoins, I doubt they could buy a fraction of all of the bitcoins as the price would quickly rise, getting past a million and then 10 million et cetera, I doubt they could even buy 1/10 of the bitcoin with the market cap worth of money.



The only coins that we should possibly exclude from market cap calculations should be provably burned coins. I dont' think there is such a thing as provably lost bitcoin. You can do your own calculations if you want to exclude coins that haven't been moved in x amount of time.

edit: misplaced word/ antonym

I think the amount of bitcoins lost will not be that many. Not long ago, we heard a hot news that an old wallet that used to mine bitcoins created in 2009 was working again. it has moved 50btc out for sale and many are concerned that many mysterious wallets will revive and continue dumping bitcoin.
The story shows that the other wallets are not dead, they are not activated and we should not be subjective.

I'd not think too much about the discrepancies. Instead of focusing on the market cap I'd rather see a good volume & depth on trading as that's what pushes the price up or down. There are many examples where tokens/coins with big market cap eventually lose nearly half of its mc simply because the volume is so low.

It's not a really good metric if you want to see market depth. And as mentioned, you can always make your own calculation if you don't agree with it. Be prepared for questions though.

The reason why people think that it's lost Bitcoins is : Apparently that wallet has been inactive for a while, we are not really sure of anything. It is not actually possible to get in touch with anyone to confirm that . Who knows if someone is just holding those coins? Who knows if someone just lost their keys and in the near future they can somehow remember it and recover them ?
At the same time there are people who apparently died and someone else tried to steal their coins *Craig Wright* , there can be cases like that too. When any family member discovers the worth they can very easily try and recover since now there is an option of passing on your Bitcoins to some family member, considering it wasn't so in the previous years , I do think wallet company can confirm and do the same.

This is the crux of it.
Marketcap = (current trading price of coin) * (total number of coins).

The 'price' is a simplification, a single measure that takes no account of the depth of the order book or the spread of bids/asks; it takes no account of the number of coins that anyone could actually sell at that price. Kind of analogous to the 'present' being just a word to denote the separation of 'the past' and 'the future'.

Similarly the 'total number of coins' is a simplification that takes no account of any coins that might be permanently lost. And it shouldn't need to, because knowledge of the proportion of lost coins should factor into the price. You might imagine that if there is some sudden news that the number of 'lost' bitcoins is vastly higher than previously estimated, this would reduce available supply, and lead to a price increase.

Marketcap is a useful approximation, but no more than that. It shouldn't be considered a perfect barometer of the overall worth of a project.

That's not a big deal for me but addressing that can also be informative for some. We all believe or probably the majority are looking forward to the market cap to reach its first trillion. It's what matters and whether you sum up 18M of supply or 14M supply depends on your calculation. The fact that a lot of it has been lost forever and that its giving contribution which makes bitcoin rarer. We only have 21 million and that's what actually matters most.

You bring some good points but you offer no viable alternative to really calculate this number.

There are estimations about the number of coins lost over the years but that is all what they are, coins that could be thought to be lost because they have not moved for years could move at any time if their owners decide to do so, or even if the coins were actually lost at some point the owner could find the seed or the private keys and recover those coins, and finally bitcoins are never truly lost, there is something called address collision which is basically two random people around the world generating the same address, while this is incredibly unlikely, there is always the chance someone could generate the address containing some lost coins and getting them back to the market, as I have said this is very unlikely since there are  2^160 different legacy addresses if I remember correctly.

Marketcap is a bullshit metric in most cases. I'd rather suggest you to not think too much about it.

Adoption/real world usage is what really matters.

If you bribe CMC and a few other key companies, you can create a bigger marketcap crypto than bitcoin and lots of people will believe it.

Historically, "market cap" was considered a very silly number. I have seen some of the old threads from when the term first started getting used, and there was a lot of push back against the idea. We all know now the capheads won, but it can still be considered a misleading and inaccurate number.

In bitcoin's case, I'd say it's a decent metric as we know that Bitcoin is decentralized anyway. The bullshitry applies mostly to 99% of altcoins in my opinion(XRP being a perfect example), whereas the company handling the project has ownership of majority of the coins; then the marketcap metric becomes quite inaccurate and misleading.

Since the other coins have fake marketcap, you can't compare bitcoin's marketcap to the other coins which makes it a useless metric in almost every case.

Maybe it would be useful while comparing bitcoin to gold...

I'd still look for the real world usage. Marketcap feels much like a pissing contest. The outcome is mostly useless.

Believed! You can't know for sure if any of those were truly lost.
Remember this?
50 BTC Just Moved for First Time Since 2009 (https://www.coindesk.com/50-btc-just-moved-for-first-time-since-2009-but-it-doesnt-look-like-satoshi)
Were those coins part of those 30% people "believed" to be lost?


So it's 24% and not 30%?  ;D

4 million bitcoins is about 22% of the current circulating supply. so yes, it does matter a lot if those coins were truly lost because they would be out of circulation and it makes bitcoin effectively 22% more scarce.
but the reality is that everyone who talks about "lost" coins are actually talking about "not-moved" coins. and those coins ARE still in circulation.

I think the lost coin figures are humongously over estimated. The ones we can be 100% certain of, burnt coins, publicly declared dead hard drives etc, only number in the tens or low hundreds of thousands. Everything else is fair game. We saw 2009 coins moving recently and I'm sure most people considered them 'lost' until they moved.

I have coins which would probably be regarded as lost because they haven't budged for so long but they are of course fully accessible. I have old .txt files with 10 year old wifi passwords so the idea of everyone losing everything from the early days is ludicrous.

Is it a good news for the bitcoin? I don't know how to do math but this 22%, if ever those bitcoin was really lost then we are able to keep the price resistance from that point, so those economists who calls it bubble will just eat their words. And yes, we are all confused about this lost bitcoin or 'not-moved' bitcoin or something, but one thing is for sure there will be more "lost" bitcoins in the future and you won't know it.

Some market capitalization from different websites are assumptions, see how different they are each time.

I agree with the above the fact that we're missing a couple million isn't the point. I think the point we can all take from this is that BTC is rare and it will become even more so and whether some out of the 14 or 18 million is missing either temporarily or forever isn't something to fuss about. The fact remains that BTC is a valuable asset and hopefully become even more so now that the limited supply has been halved.

It is not possible to accurately predict how much real Bitcoin is on the market and how much Bitcoin is lost, there are Bitcoin currencies that Satoshi mining and that no one knows exactly how much, I also heard that some people are still sending to the address of the first Bitcoin block that Satoshi mining In addition to wallets that have lost the private key.
 In short, there are large amounts of Bitcoin missing but no one knows exactly how much it is, but there are other Bitcoin quantities that are included with Satoshi and in unused wallets and these can be used and entered the market at any time.
Recently, 50BTC has been moved from a sleeper wallet since 2011, no one knows who this wallet is and there are probably many of these sleeping wallets and can be moved at any time.
All of these things make it impossible to really calculate the Bitcoin volumes on the market.

And where did you get that this is true? Since you saw it somewhere or did someone tell you? It seems to me that these sources may simply not be reliable.

If we have solid proof on lost bitcoins then we may go skipping them from calculating total marketcap of bitcoins. But, we must need to understand that simply including only 14 million bitcoins for calculations against 1 trillion marketcap, bitcoin prices will not jump to $77k levels. Like many people suggested marketcap is non-influential number on effecting on any of trading or value finalizing things. It is only for comparison and nothing more.

Due to the insignificant of marketcap calculations, we are ignoring about the lost number of bitcoins.

Knows, some services may hear you opinion and may start think about re-arranging the criteria to calculate all new type of marketcap of bitcoins. But, its impact on markets of bitcoin may not be felt.

The major problem here is that the 30% loss of bitcoin cannot be stated as a solid evidence, the coins that are not moved for years does not mean that the owners are dormant and they lost their coins. The valuation of bitcoin is determined by the open market and if people find it rare then the price would move up eventually but it must have an intrinsic value for them to move higher all the time.

This is an interesting point, the main problem is that most of your idea is based on assumptions, who knows how much btc is lost? where are those 30% comming from? and how can someone know how many private keys have been lost? can't some also be found again?
A very interesting subject as if there were any trustable data on this, it could heavily affect price of btc...
For now a value like a market cap can't be based on assumptions... i think

To be honest, with regard to the number of lost bitcoins, no one can be sure, it can really be lost or it can appear suddenly.
Debates like this will make us tired and useless to debate. I think it's better if we focus on collecting bitcoin, after all, what
circulates 18 million is true or not. That has no effect on the price of bitcoin right now, we shouldn't think too much regarding
market cap. Bitcoin promotion and adoption are the most important for now.

Yes, the bitcoin is lost but cant erase from the bitcoin market cap because the lost bitcoin is still stored on the bitcoin and it the private keys which can be use to unlock the funds (bitcoin) that's missing.
To make more understandable. Do you what coin burning is cause the situation is just like it.

Some article writers spread false information and the best way you wont be misleaded is through more research and asking question on here.

Thats correct and this is the reason why some metallic private keys/seed storage (https://jlopp.github.io/metal-bitcoin-storage-reviews/) keeper was introduced.


 

Marketcap is really just a rough metric on how much money is invested in a certain asset. No more, no less. While it's a relevant metric when doing research on certain assets(again, a lot less relevant when talking about most altcoins), it was never a direct metric in determining an asset's real world usage anyway.

Well the market cap of Bitcoin is much lower in fact it is very difficult to determine the price of other currencies No one can control the rise and fall of the market but in the case of Bitcoin it is much easier to focus. Its circulation around the world is at the top of the Bitcoin market cap competition That's why it's better to focus on Bitcoin now.

That's possible, chances that those so called lost btc are just secretly holds by certain individuals or groups and just appear
inside the market one day.


Though the arguments in terms of actual numbers of existing coins will possibly increase it's value from the market it's
still best to think of investing more and try to accumulate and hold.

I would still argue that if the consensus is that a certain number of coins are irretrievably lost, then this would already be factored into the price - a reduction in supply increases relative demand.
And current price is only attainable for the first order in the book, it's not like everyone could immediately sell their bitcoins and get current market rate.

It's most likely good since all of us wants to profit from Bitcoin right and there's not much of an issue with the lower circulating supply since we still have several denominations to use if we ever go down that route. We might not know the real estimate but it's hard to say that it had an impact in today's price because the miners still have a few million left.

Exactly my point. Since we don't know the true of scope of how many bitcoins are actually "available" and not lost. This shouldn't be our concern for now – Bitcoin is not even at $50K yet as the so called "financial experts" had predicted. It's better not to deal with the maths now and keep our focus on bitcoin and accumulating more. About the lost bitcoin, it should also be taken into consideration that most early adopters and buyers of Bitcoin have lost access to their wallets (forgotten private keys, phases, seeds etc). That isn't been accounted for. So you see, I don't see the point. It's a good thing bitcoin supply is capped at 21M coins.

It's just that the term 'market capitalization' has a certain definition and a formula to calculate it. This formula is simple and doesn't take into account those coins that are lost forever. If one even tried to calculate the market cap by subtracting those lost coins, estimates would vary wildly, I believe. Take what's known as Satoshi's bitcoins. Nobody knows whether they are just not touched on purpose or access to them is lost forever. And I'm sure it's not even close to being the only such case when we have no idea if a big chunk of BTC should be counted or not.

I don't think so. What if someone is only HODLing it or will find back private keys and sell them? That means that Coinmarketcap will have to change the circulation amount every time when some coins which were marked as lost. That's extremely weird and it doesn't work even at gold or dollars. And even without changing of the market cap will Bitcoin have an increasing price for even a few decades and will be very profitable.

That is possible. Many coins that were thought of being "lost" have already resurfaced.
Just a few weeks ago someone signed a message with 100 addresses each containing 50BTC.

I was surprised that the bitcoin market did not react to it in any way. That was 5000BTC that were thought lost until that moment.