Cryptocurrency Bitcoin (BTC) stands out as the most valuable cryptocurrency despite its price falling below $30,000. In total, about 19 million of the BTCs, which are designed to be mined with 21 million units, have been released so far. However, although new Bitcoins are obtained by mining, researches show that this coin reveals that every day some of it is lost. Allegedly, close to a third of the BTCs issued to date have been lost. So where are these BTCs going? Can these lost BTCs be recovered?
Billions of dollars of BTC may have been lost. According to new information released by blockchain data firm IntoTheBlock, no transactions have been made for 5 years with 29 percent of Bitcoin’s total circulating supply.. “Our data shows that 29 percent of BTC has not moved in more than five years. Much of this could be related to lost coins,” he tweeted.
All-time high
Another data company Glassnode, on the other hand, says in a tweet that BTCs that are not used in any transaction or can be described as lost have reached an all-time high of 7 million 781 thousand 224 BTC. Considering that the price of a BTC was $ 29,804 as of July 18 at 16:00, it is striking that the total amount of BTC that is likely to be lost is more than $ 231 billion 710 million.
On the other hand, Timothy Peterson, a manager at Cane Island Alternative Advisors, a consulting company headquartered in Texas, USA, claimed that 1500 BTC disappeared every day in September 2020. Although this claim contradicts the figures announced by other organizations, Peterson argued that the number of lost BTC dwarfed the 900 BTC issued every day at that time, and that instead of the 18 million BTC that was issued at that time due to the lost Bitcoins, 14 million BTC were actually in circulation.
Also, Peterson pointed to a research note published by his organization in early 2020 to support his claim. The five-page Research note says that BTCs that are irretrievably lost have no funds and are no longer part of any economy. The document also stated that such BTCs are not tradable and the cost of recovery exceeds the value from successful redemption.
Most wallet passwords are forgotten…
So what happened to all that BTC? According to experts, there are two answers to this. Individuals and organizations keep BTC as a long-term investment tool instead of spending it, so these BTCs are not used in any transactions and are considered lost. Or, this lost BTC amount also shows the amount in wallets that cannot be reached due to reasons such as forgotten passwords. The BTC price has skyrocketed over the years, and small amounts of Bitcoin from the early days are now worth a fortune. So, if investors still had access to these idle accounts, they would probably have already traded. That is why experts consider the second option to be more correct.
Before Bitcoin became so popular, many investors bought BTC without fully understanding how to properly secure their electronic wallets. A good example is the case of Stefan Thomas, a programmer from San Francisco who couldn’t use his approximately 7,002 BTC because he forgot his wallet password. Thomas’ assets are currently more than $200 million, but he cannot remember the password containing the private keys of his digital wallet.
There is hope for lost BTCs…
There’s nothing to be done with e-wallets found on trashed or corrupted hard drives, but there’s still hope for forgotten passwords. Companies like Crypto Asset Recovery are recovering digital assets from forgotten BTC wallets. “We estimate that about 2.5 percent of lost coins are still recoverable,” says Chris Brooks of Crypto Asset Recovery. However, according to Brooks, cracking the password is quite long and laborious. Brooks says they were able to crack e-wallet passwords after trying hundreds of millions of password variations. Brooks also adds that half of the wallets they recover are empty and customers are frustrated.
Sources: Bitcoin.com, Crypto News, Bankrate
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