I can guarantee 3 billion market cap for Dash in 1 month and if you keep reading I will prove it. I am not sure how much sense "market cap" makes for a currency, but it is a measure that drives trading, press releases, hype, and trust in a currency. The common formula for market cap is the following:
Assuming demand remained constant, you would have a situation where the Price was constant. However, given the Perceived Supply was increased then the market cap would be increased. This would have profound affect on trader psychology, ability to gain trust, and adoption.
How to increase Perceived Supply without increasing Trade-able supply?
Well, Dash already does this on some scale. The "Staking" of coins in a master node removes them from the Trade-able supply. In this particular example there is some kind of convertibility, but Perceived Supply MUST always be greater than Trade-able supply because not all masternodes could convert their coins for trading or else the network would fail. As a result, there is a % of coins that are de-facto permanently staked.
So, my idea would be create to more "stakes" in the network that increase Perceived Supply, but do not change Trade-able Supply. Imagine for one second if 100 million coins were created by the network tomorrow. However, they needed to immediately be burned or staked. Trade-able supply would be unchanged, so the as long as demand was constant then Price would be unchanged However, Perceived Supply would increase by 100 million coins. As a result, the coins Market cap would therefore increase by 500 million dollars (100 million x $5).
Word of caution:
It is my judgement that some coins have more differences between Perceived Supply and Trade-able Supply due to their history (lost coins) or to their system of operation (e.g., masternodes). Given the impact of "market cap" on trading psychology I believe it has a real effect in the short-medium term on the adoption of that coin.
One such coin that I suspect has a HUGE disparity between Trade-able and Perceived Supply would be Ethereum. In some respects, it is very possible for coins to "print" a "market cap" as I pointed out and proved. And, traders not understanding this may trade on this which will drive up prices of a far more inelastic and supply constrained coin than they realize especially because few traders / investors / consumers are informed enough to realize that market cap comparisons are not accurate and apples to oranges comparisons between coins.
Market Cap = Perceived Supply * Price
Now, the interesting thing is that Price is a function of Trade-able Supply and Demand (notice, NOT Perceived Supply). Imagine for one second what would happen if you increased the Perceived Supply but the Trade-able Supply remained constant.
Assuming demand remained constant, you would have a situation where the Price was constant. However, given the Perceived Supply was increased then the market cap would be increased. This would have profound affect on trader psychology, ability to gain trust, and adoption.
How to increase Perceived Supply without increasing Trade-able supply?
Well, Dash already does this on some scale. The "Staking" of coins in a master node removes them from the Trade-able supply. In this particular example there is some kind of convertibility, but Perceived Supply MUST always be greater than Trade-able supply because not all masternodes could convert their coins for trading or else the network would fail. As a result, there is a % of coins that are de-facto permanently staked.
So, my idea would be create to more "stakes" in the network that increase Perceived Supply, but do not change Trade-able Supply. Imagine for one second if 100 million coins were created by the network tomorrow. However, they needed to immediately be burned or staked. Trade-able supply would be unchanged, so the as long as demand was constant then Price would be unchanged However, Perceived Supply would increase by 100 million coins. As a result, the coins Market cap would therefore increase by 500 million dollars (100 million x $5).
Word of caution:
It is my judgement that some coins have more differences between Perceived Supply and Trade-able Supply due to their history (lost coins) or to their system of operation (e.g., masternodes). Given the impact of "market cap" on trading psychology I believe it has a real effect in the short-medium term on the adoption of that coin.
One such coin that I suspect has a HUGE disparity between Trade-able and Perceived Supply would be Ethereum. In some respects, it is very possible for coins to "print" a "market cap" as I pointed out and proved. And, traders not understanding this may trade on this which will drive up prices of a far more inelastic and supply constrained coin than they realize especially because few traders / investors / consumers are informed enough to realize that market cap comparisons are not accurate and apples to oranges comparisons between coins.
