Due to the fixed supply of Bitcoin, former Google Product Director Steve Lee stated that only 1 percent of the world’s population can own more than 0.28 BTC. “If you own 0.28 BTC and HODL, you can be certain no more than 1% of the…
Due to the fixed supply of Bitcoin, former Google Product Director Steve Lee stated that only 1 percent of the world’s population can own more than 0.28 BTC.
“If you own 0.28 BTC and HODL, you can be certain no more than 1% of the current world’s population can ever own more BTC than you. A modest investment of $1,830 today can ensure you are a 1%er in a future Bitcoin world,” Lee explained.
Throughout the next few years, the scarcity of Bitcoin will increase as more investors and institutions continue to accumulate the cryptocurrency, which could further reduce the total possible number of individuals that can ever own one whole Bitcoin (1 BTC).
The supply of Bitcoin is fixed at 21 million BTC, and as a hard coded monetary policy of the protocol, the fixed supply of the dominant cryptocurrency cannot be altered.
In late 2017, Chainalysis, a blockchain forensics company that monitors and investigates cryptocurrency transactions, revealed in a research paper that up to four million BTC are permanently lost on the blockchain as a result of theft, loss of wallets and private keys, and the dormant wallet of Bitcoin creator Satoshi Nakamoto, which experts have said is no longer accessible.
Kim Grauer, Senior Economist at Chainalysis, said at the time, that the lost supply of BTC is not taken into consideration by the market cap. That means, the real price of BTC could be substantially higher, as 4 to 6 million BTC are estimated to be lost.
“That is a very complex question. On the one hand, direct calculations about market cap do not take lost coins into consideration. Considering how highly speculative this field is, those market cap calculations may make it into economic models of the market that impact spending activity,” Grauer said.
The 0.28 BTC figure introduced by Lee assumes the supply of Bitcoin to be 21 million, as it divides 21 million by 0.28 and divides the outcome of that by the world population that is 7.442 billion. If the research of Chainalysis is accurate and that 4 to 6 million BTC are lost on the blockchain, the supply of Bitcoin should be closer to around 16 to 17 million.
Based on the estimate that the supply of Bitcoin is around 17 million, only 0.8 percent of the world population can own more than 0.28 BTC and less than 0.2 of the world population can own more than 1 BTC.
In consideration of the limited the supply of Bitcoin and the increasing value of the cryptocurrency, in the years to come, the 0.2 percent figure is expected to decline substantially.
The fact that any investor in the global market can be within the 1 percent of the world population with a $1,830 investment demonstrates that the cryptocurrency market is still at its early phase, and in terms of adoption, market development, infrastructure, and regulation, the sector can still grow significantly in the mid to long-term.
Featured image from Shutterstock.
Last modified: May 20, 2020 5:18 PM UTC