The fact that only 75% of Bitcoin is usable should drive the price increase of this cryptocurrency.
According to a Reuters report, the US digital cryptocurrency security company CipherTrace released a report showing that in the first half of this year, the cryptocurrency worth $761 million was stolen and the scale of theft was three times that of 2017.
At this week’s Bitcoin conference, BitGo’s former chief engineer and CasaHODL engineer Jameson Lopp revealed that an estimated 4 million bitcoins were lost and 2 million Bitcoins were stolen.
As of July 2018, a total of 6 million Bitcoins are unusable and permanently lost on the Bitcoin blockchain. Since it is not possible to recover lost Bz with a hard fork, 28.5% of the fixed supply of Bitcoin will be permanently lost.
Therefore, the maximum supply of BTC will not exceed 15 million. As of now, it seems that 17 million BTCs are in circulation, and 11 million can actually be used, sent, received and traded.
Does the current price take into account the amount lost?
Chainalysis, a cryptocurrency and blockchain analysis company, first revealed in an interview with Fortune that the Bitcoin blockchain had lost 3.79 million bitcoins. This figure was announced in November 2017.
At the time, Kim Grauer, senior economist at Chainalysis, said that due to the high speculative nature of the cryptocurrency industry, it was difficult to determine whether the market would consider losing Bitcoin. Kim Grauer explained that in the long run, as the fixed supply of BTC is maximized, the increase in demand may push up the price of BTC, resulting in a premium.
Kim Grauer explained:
This is a very complicated issue. On the one hand, the market value is calculated directly without regard to the number of lost Bitcoins. Given the high speculative nature of this area, these market capitalization calculations may make it a market economy model that affects consumer behavior. However, just look at the trading behavior and know that the market has adapted to the actual demand and supply. In addition, the well-known monetary policy process is to reduce or increase the statutory reserve to affect the exchange rate. So the answer is yes and it is uncertain.
As of July 5, 2018, the price of the BTC was $6,700. The price of Bitcoin is based on the 17.13 million Bitcoins that are said to be circulating in the market. However, if the amount of Bitcoin publicly displayed to the public is 11 million, the value of Bitcoin will be $10,300.
Similar to block halving, the fact that millions of Bitcoins are lost in blockchains is widely known to global market investors. The current market is likely to show an estimate that considers that the supply of bitcoin is actually much smaller than the supply described by the market.
21 million bitcoins are unrealistic
In the past few years, well-known investors and analysts in the cryptocurrency industry have consistently stated that the price of bitcoin may reach $100,000 to several million dollars, as only 21 million BTCs can exist.
If Bitcoin has better value storage capacity than traditional assets such as gold, one of its main features will be that its supply is fixed. In the long run, only 75% of Bitcoin is available, a fact that should drive up the price of this cryptocurrency.