Bitcoin Inflation calculation

daily Bitcoin inflation calculation percentage

During the mining process, coins are created on a daily basis inflating the coins and decreasing the value as the circulating supply increases.  Here is how to calculate the inflation rate of a coin.

First you must find the following values:

1.  Market price (MP)                                                                                 

2.  Circulating supply (CS)

3.  Blocks mined per day = 24 hours / block time = (BMD)

4.  Reward per block(RPB)

5.  Coins created per day (CCD)

6.  1,000,000 satoshis to a BTC, or move the decimal 8 places.

7.  Sell pressure (SP) per day calculation

8.  Circulating supply (CS) * Market Price (MP) = BTC per day (BPD)

For Example: Say I found an interesting coin called mud coin (mud) and I wanted to figure the inflation of this coin per day.  This coin has a market price of 1000 satoshis or .00001 BTC.  The circulating supply is 5 million tokens.  You can find this number on Coinmarketcap.  Blocks are mined every 2.5 minutes with a block reward of 75 mud per block.

1.  Market price = 1000 Satoshis (MP)

2.  Circulating supply = 5 million (CS)

3.  Blocks mined per day: 2.5 minutes = 60/2.5*24 = 576(BMD)

4.  Reward per block (RPB): 75 (mud)

5.  Coins created per day: 576(BMD)*75(RPB) = 43,200 (CCD) new mud per day

6.  There are 1,000,000 satoshis to a Bitcoin.  So 1000 satoshis = .00001000

7.  Sell Pressure per day(SP): (CCD)43,200*.00001(MP)= .432 BTC (SP)

8.  Circulating supply 5,000,000 (CS) * market price 1000 satoshis or .00001(MP) = 50 Bitcoin (BPD)  

9.  (SP) / (BPD)*100=daily inflation .432/50*100= .864%   

Less than 1% inflation is GREAT!

Formula:

1.       CCD = MBD*RPB

2.       SP = CCD*MP

3.       BPD = CS*MP

4.       SP/BPD*100 = Inflation

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