Opinion: We must abandon market capitalization as a tool for assessing the total wealth in Bitcoin

Opinion: We must abandon market capitalization as a tool for assessing the total wealth in Bitcoin

Opinion: We must abandon market capitalization as a tool for assessing the total wealth in Bitcoin

The partner of the Castle Island Ventures Castle Island Metrics Analytical Resource, Nick Carter is convinced that market capitalization is an irrational and inaccurate tool for measuring the volume of capital enclosed in bitcoin. He stated https://gagarin.news/ua/news/what-is-proof-of-space/ this during his speech at the Baltic HoneyBadger 2018 conference in Riga.

According to a number of studies, several million coins have not moved since 2009-2010, including the alleged addresses of Satoshi Nakamoto. Probably noted Carter, they can be in the “cold” storage, but can also be lost forever.

“I’m not sure that we must take into account their total value in market capitalization”.

In return, Carter proposed calculating the so -called “costs of ensuring security” – the total income of miners in the entire history of Bitcoin, provided that they sold coins immediately after mining.

“This fairly gross heuristics will lead us to the amount of $ 10 billion, from which we need to build up when calculating the investment in bitcoin. The answer is somewhere between $ 10 billion and a market capitalization of $ 115 billion “, – the researcher emphasized.

He proposed an alternative tool – “implemented capitalization”, which is based on the aggregation of UTXO [outputs of undomessed transactions] taking into account the price of bitcoin with their last activity. Thus, Carter came to the conclusion that the realized capitalization of bitcoin is about $ 88 billion.

“A significant part of the coins has been lost forever, they should not be taken into account, since they are no longer active.”, He added.

A similar situation, he believes, has developed in the netcoin cash and Bitcoin Private networks. Most of the coins that users received through Airdrop have never left their original addresses, so market capitalization assures Carter, is not applicable in such cases.

He stated that 18% of all the implemented capitalization of the first cryptocurrency is on the Bitcoin-Birzh wallets.

We will remind, earlier the venture investor Tim Draper predicted that the capitalization of the cryptocurrency market will reach $ 80 trillion in 15 years.

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