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That figure was the market cap, the price at which a token was sold multiplied by the number of tokens on the market. If a billion tokens are available, the ma
by dtech 6y ago
That figure was the market cap, the price at which a token was sold multiplied by the number of tokens on the market.
If a billion tokens are available, the market cap is $0.5B if you sell a single token for $0.5. That's what happened yesterday more or less. You won't be able sell all tokens for $0.5B, so saying they are worth $0.5B is misleading for such a volatile and young project.
The metric works much better (but not perfect) for established shares, financial products or contracts for physical objects.
- eru 6y agoYes. To give an example: many bitcoins are lost (ie deleted private key), or in accounts that presumably will never trade, so you should remove those when calculating bitcoin total market capitalisation.
- 9nGQluzmnq3M 6y agoExcept that it's literally impossible to distinguish between a "lost" bitcoin (no private key) and one sitting in a cold wallet (private key exists offline).
- Scoundreller 6y agoLots of things are impossible to calculate 100% precisely, but that doesn’t stop anyone from building models anyway. Just like “How much US$ is out there in paper currency?”. Impossible to know, especially as it’s never been demonetized, but models exist and are used.