What is the method to determine the total market capitalization of the Bitcoin market?

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When I look at the following site it says (at the time of writing) that the total market capitalization of Bitcoin is $125,927,574,809 AUD.

Now I think you could do this by running through the entire history of transactions on the blockchain, adding them all up, and multiplying by the current price. But there is probably a better way.

My question is: What is the method to determine the total market capitalization of the Bitcoin market?

hawkeye

Posted 2017-10-22T10:39:32.270

Reputation: 169

Answers

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"Bitcoin market cap(in AUD)" = "Number of bitcoins in circulation" X "Value of single bitcoin(in AUD)"

The same as a market cap of some company: "number of their shares" X "value of single share".

Market cap means what would be the money you get if you sell all the bitcoins at current price.

Number of bitcoins in circulation can be calculated by going through all blocks of the main blockchain and sum the bitcoin reward of each of them.

croraf

Posted 2017-10-22T10:39:32.270

Reputation: 1 112

1Great answer. Where do I get the number of coins in circulation?hawkeye 2017-10-22T11:31:27.983

I use this site for that kind of stuff: https://coinmarketcap.com/

croraf 2017-10-22T11:35:01.980

Ok - I was looking for an implementation methodhawkeye 2017-10-22T11:42:37.683

What do you mean by the implementation method?croraf 2017-10-22T11:50:52.717

I mean in terms of the BTC protocol and how the a software client and that site use it.hawkeye 2017-10-22T11:57:33.663

You can sum all the mined blocks from first one ever mined and multiply each one with the reward it gave. These are all the bitcoins that ever entered the circulationcroraf 2017-10-22T12:01:24.997

Alternatively, and surprisingly, this is equal to the value of all unspent outputs currently on the blockchain. Because all unspent outputs show all the bitcoins in the circulation.croraf 2017-10-22T12:02:35.650

The sum of all unspent outputs will give you the actual amount of Bitcoin in circulation. This will be slightly less than what you calculate from mining because there are some coins that are irrevocably lost.Andrew Chow 2017-10-23T00:44:16.220

How can they be lost? (If keys are lost they are still on the chain as UTXOs ?)croraf 2017-10-23T06:35:36.897

Ok - can you please update your answer to include that?hawkeye 2017-10-23T08:56:57.697