How does bitcoin market cap take into acount forever lost bitcoins

Inspectron

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Quote from: philipma1957 on November 27, 2020, 09:10:40 AM

BTW every lost coin can be recovered if agreed upon by consensus.

Pretend there are 2 million lost coins.

We could agree that a wallet/address not touched for 50 years goes back into the pool of 21 million coins.

-------------------------

Or you could agree it would go to end world hunger. -\oo\_

Xinarae*

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It depends on the market cap for the currency or token to be lost. Many projects fail to balance their markets which is why they get lost forever this is why it is better to stay away from investing in lost tokens and those that have no market credibility. There will be no fear of getting lost. Bitcoins can never be taken away, even if their value is reduced it is possible to use them as currency. When the market for token investing is lost the stock market goes down.

TopT3ns

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Quote from: el kaka22 on November 30, 2020, 08:58:44 AM

~ So in order to calculate something that is forever gone would be very hard if you do not know the number of it, hence they do not care about that at all.
~

I think as long as the circulation of bitcoin is still rotating and still having transactions it will make it difficult for us to count all the coins in circulation and how many have never been touched again, but unfortunately it will never be possible because the trading volume of bitcoin will always increase and that is certain there will always be transactions made.

el kaka22

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There is also the fact that we can never know the exact number of coins that is forever lost. I mean we know some of them, that is understandable, it is said that over 2 million coins are totally lost and can never be used, but we do not know "exact" number how much because I could just delete my keys right now and delete the my wallet and can never reach it ever again and not tell anyone about this and it would not be known but gone. So in order to calculate something that is forever gone would be very hard if you do not know the number of it, hence they do not care about that at all.

Act as if all of it is available because honestly we have no guarantee that it is fully gone, we do know that it is sort of gone but we do not have a contract stating it can never be used again.

bryant.coleman

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When we calculate the market cap of stocks, bullion.etc, we don't exclude any portion claiming that those assets are being held by people who are dead or those who have forfeited their ownership. Around the globe, billions of $$$ worth of real estate can't be developed because they are being held up in property disputes. But they are included in the market cap. The methodology for calculating the market cap should be the same for Bitcoin. Therefore I don't think that we need to exclude the "lost" coins.

philipma1957

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Quote from: exstasie on November 28, 2020, 01:24:03 PM

Quote from: gentlemand on November 27, 2020, 05:46:31 PM

Quantum computing may possibly release all those lost coins which would make for a fruity moment or two.

I'm still of the opinion that the community will eventually wise up and burn coins held in insecure addresses. Nobody is particularly concerned right now so people can afford to get on their high horse about not "stealing" outputs, but when the quantum threat is real, those political ideals will give way to practicality.

I remember contemplating how to fix Zcash and the inability to effectively audit its supply. I liked the idea of a consensus rule that required outputs to be moved once every epoch (could be years) or otherwise be burned. This would audit the supply and ensure no secret inflation had occurred. Obviously not something I expect to see implemented in Bitcoin, but it would be cool and would solve this problem.

In banking idle accounts are forfeited. I think they will set a time limit on withdrawals

50, 70 ,100 years come to mind. Recirculation always keeping 21,000,000 as your base like I said

or destruction and permanent reduction of the 21,000,000 down to say 19 million or what ever has not had a withdrawal is very likely to happen down the road.

It is pretty certain that I won't make the 75 or 100 year numbers . And 50 years from now I would be 113 years old and simply not give a fuck about it if I make it the that unlikely age.

I would like to see a vote making one of the above come true in 2059.
They could cast the vote in 2030 or 2040.

Smartprofit

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Interesting discussion.

We do not know how many coins are lost. At the same time, the market capitalization of Bitcoin is calculated based on all mined coins. Consequently, the real capitalization of Bitcoin is less than the officially declared one.

This has nothing to do with the price of Bitcoin. Bitcoin price is determined by the balance of supply and demand. At the same time, trading is carried out on cryptocurrency exchanges. Lost bitcoins and bitcoins of ideological holders do not participate in trading.

coolcoinz

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Quote from: gentlemand on November 27, 2020, 05:46:31 PM

Pointless cos there's no way to know what's lost and what isn't.

We'd likely be shocked at how many old coins are still accessible and similarly shocked at how many recent ones have been thrown away.

Quantum computing may possibly release all those lost coins which would make for a fruity moment or two.

I'd prefer them not to be released, because who is there to say which coins are to be touched and which are not? Are Satoshi's coins up for distribution or are they still in his possession? Should the past owner who lost coins demand some of them to be returned to him after a quantum machine cracks his lost wallet? These are the dilemmas we'd be facing. It's best to let them be and for the market to adjust the price taking those lost coins into account.

FanEagle

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They do not really take that into consideration, and there is really no need to consider it gone neither because they are actually "there" as in they do exist, they are just unreachable but that is just for now.

We do not know the future of bitcoin and blockchain world but I assume there could potentially be a method where people could find a way to get back into their own wallets, or reach into other wallets that has no security at all, it would be basically hacking at a level where other party doesn't need to exist in order to happen, or even quantum computers could exist to both secure our coins, but also hack into unsecured ones. So long story short it is not guaranteed that those coins are fully gone, there could always be something in the future that could bring them back.

The Sceptical Chymist

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Quote from: philipma1957 on November 27, 2020, 09:10:40 AM

Think gold do we count the gold in sunken treasure ships?
Do we count the gold in the ground?

Right-O, although I respect that OP is thinking analytically and has asked a question I've never heard asked here before.

Just because that 10% or so of bitcoin is "lost," it still exists. It hasn't been destroyed; it just isn't accessible to anyone. I suppose you could create your own "effective market cap" if you could keep track of every single satoshi that's been lost but I don't see the point of that even if you had complete information with which to compile such a statistic.

Quote from: hatshepsut93 on November 28, 2020, 09:10:22 PM

A lost coin means that no one knows its private key, but how can you prove that you don't know something, especially if you used to know it?

Yep, then there's that.

I don't know why so many people pay so much attention to the market cap of coins. It isn't an indication of the quality of a coin or its usefulness, just the total value of all the coins in circulation. I think TRX is a shitty altcoin, but it's high ranked on CMC because there are so many of them in existence that even though 1 TRX=$0.02, the market cap for that coin is enormous. Means nothing to me.

mnporter2001

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There is no way to get back the bitcoins that humans have lost. Many people have been quite subjective in storing the Key and after many years they have lost it and Bitcoin in their wallets is forever not transferred.
Besides, there is no other way to get back that bitcoin unless the hacker has information about the wallet. But to attack a cold wallet is a very bad idea, hackers will also give up soon.

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Quote from: Inspectron on November 27, 2020, 08:41:51 AM

Right now Bitcoin market cap is about $316,001,197,150 for a bitcoin price of $17,029.88, doing the math ( not my forte ) that means they are taking into account 18 556 650 coins in existence.
It´s fairly known that way more than 10% of all bitcoins is forever lost.
So my questions:
Is there a more reliable market cap calculation out there?
How does this affect evaluation, for example when comparing bitcoin to gold.
What would be the best method of knowing how many coins still exist?

It will be difficult to find out information about the loss of Bitcoin, because we do not hold the Bitcoin data of anyone, it is also difficult to determine if it is the Bitcoin lost forever or not. Recently, before the price of BTC pumped to 19k $, a wallet containing 1000 BTC came back to life after 10 years of being buried. Obviously we are also not sure how much Bitcoin can be traded, I know quite a lot of people lose their Key to access their BTC wallets but I think it's just a few. The majority of wallets with a lot of BTC are usually whales' and it's not yet time for them to move it out, i think.

atjiat

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I believe that capitalization takes into account all the bitcoins mined to date, and at least the only way to be sure of the reality of the statistics is to check which wallets are active and which are not. Because there is no other way to be sure that Bitcoin is lost or held for an extended period.

magneto

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Quote from: Inspectron on November 27, 2020, 08:41:51 AM

Right now Bitcoin market cap is about $316,001,197,150 for a bitcoin price of $17,029.88, doing the math ( not my forte ) that means they are taking into account 18 556 650 coins in existence.
It´s fairly known that way more than 10% of all bitcoins is forever lost.
So my questions:
Is there a more reliable market cap calculation out there?
How does this affect evaluation, for example when comparing bitcoin to gold.
What would be the best method of knowing how many coins still exist?

1st time post... so maybe a bit of a newbie kinda questionnaire.
stay cool good people of the internet Cool

I doubt that there is a more accurate measure per se. Market cap obviously takes into account all coins, regardless of whether they are lost or not.

The seemingly obvious thing to do is to subtract an estimate of lost coins from the circulating supply of BTC. However, that would prove to be completely unreliable. There is virtually no way to distinguish simply dormant coins of long term holders from actually lost coins on a consistent basis.

And even if there was, there could always be the chance that lost coins can be recovered in the future. This is more likely now with BTC prices increasing exponentially, it gives a lot more financial incentive for wallet recovery services to be sought after.

Findingnemo

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Quote from: Globb0 on November 28, 2020, 04:15:23 PM

Quote from: Findingnemo on November 28, 2020, 02:40:48 AM

Quote from: Inspectron on November 27, 2020, 08:41:51 AM

Right now Bitcoin market cap is about $316,001,197,150 for a bitcoin price of $17,029.88, doing the math ( not my forte ) that means they are taking into account 18 556 650 coins in existence.
It´s fairly known that way more than 10% of all bitcoins is forever lost.
So my questions:
Is there a more reliable market cap calculation out there?
How does this affect evaluation, for example when comparing bitcoin to gold.
What would be the best method of knowing how many coins still exist?

1st time post... so maybe a bit of a newbie kinda questionnaire.
stay cool good people of the internet Cool

How you actually considered those Bitcoins are lost? Those coins stays in the wallet for very long time doesn't mean it was lost even if it lost still it has its role in the price and Market cap values so no one is faking the values and importantly total marketcap is not really an useful stats.

That resonated the most with me as the best answer so far.

in other words the old adage applies here,

1 bitcoin still equals 1 bitcoin!

I am not old, I just have my mind with me. Grin

1 bitcoin is 1 bitcoin and the total cap of it 21 will be fore sure. Even if someone willingly send it to wrong address still the coin exist in the wrong address forever.

hatshepsut93

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No one knows and no one will ever know how many coins are actually lost. A lost coin means that no one knows its private key, but how can you prove that you don't know something, especially if you used to know it? The only coin that are 100% lost are the one's sent to so-called "burner addresses", but they are only a small fraction of all coins. From time to time coins that weren't touched for 8 or even 10 years become active, so just because it wasn't touched for long time, does not mean it was lost.

Globb0

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Quote from: Findingnemo on November 28, 2020, 02:40:48 AM

Quote from: Inspectron on November 27, 2020, 08:41:51 AM

Right now Bitcoin market cap is about $316,001,197,150 for a bitcoin price of $17,029.88, doing the math ( not my forte ) that means they are taking into account 18 556 650 coins in existence.
It´s fairly known that way more than 10% of all bitcoins is forever lost.
So my questions:
Is there a more reliable market cap calculation out there?
How does this affect evaluation, for example when comparing bitcoin to gold.
What would be the best method of knowing how many coins still exist?

1st time post... so maybe a bit of a newbie kinda questionnaire.
stay cool good people of the internet Cool

How you actually considered those Bitcoins are lost? Those coins stays in the wallet for very long time doesn't mean it was lost even if it lost still it has its role in the price and Market cap values so no one is faking the values and importantly total marketcap is not really an useful stats.

That resonated the most with me as the best answer so far.

in other words the old adage applies here,

1 bitcoin still equals 1 bitcoin!

exstasie

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Quote from: gentlemand on November 27, 2020, 05:46:31 PM

Quantum computing may possibly release all those lost coins which would make for a fruity moment or two.

I'm still of the opinion that the community will eventually wise up and burn coins held in insecure addresses. Nobody is particularly concerned right now so people can afford to get on their high horse about not "stealing" outputs, but when the quantum threat is real, those political ideals will give way to practicality.

I remember contemplating how to fix Zcash and the inability to effectively audit its supply. I liked the idea of a consensus rule that required outputs to be moved once every epoch (could be years) or otherwise be burned. This would audit the supply and ensure no secret inflation had occurred. Obviously not something I expect to see implemented in Bitcoin, but it would be cool and would solve this problem.

Findingnemo

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Bitcoin = Financial freedom

Quote from: Inspectron on November 27, 2020, 08:41:51 AM

Right now Bitcoin market cap is about $316,001,197,150 for a bitcoin price of $17,029.88, doing the math ( not my forte ) that means they are taking into account 18 556 650 coins in existence.
It´s fairly known that way more than 10% of all bitcoins is forever lost.
So my questions:
Is there a more reliable market cap calculation out there?
How does this affect evaluation, for example when comparing bitcoin to gold.
What would be the best method of knowing how many coins still exist?

1st time post... so maybe a bit of a newbie kinda questionnaire.
stay cool good people of the internet Cool

How you actually considered those Bitcoins are lost? Those coins stays in the wallet for very long time doesn't mean it was lost even if it lost still it has its role in the price and Market cap values so no one is faking the values and importantly total marketcap is not really an useful stats.

Vishnu.Reang

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This is a very complex topic. First of all, we can't label any wallet as being "lost". There is always a chance that the private keys will be recovered sometime in the future. So I don't agree with the suggestion that the "lost" coins should be excluded from the market cap calculation. The current methodology for market cap takes in to account the coins that are in free-float, as well as those which are not so.

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