Find out how much Bitcoin is gone forever. Learn about the dynamics of Bitcoin’s supply and the factors that contribute to Bitcoin loss.
Bitcoin, the world’s first and most famous cryptocurrency, has been a game-changer in the global financial system. With a capped supply of 21 million, Bitcoin’s scarcity is one of its key features that distinguish it from traditional fiat currencies. Around 18.59 million Bitcoin have been minted, which is approximately 89% of the maximum supply. However, a significant chunk of this supply has been lost beyond recovery, creating a fascinating question: how much Bitcoin is gone forever?
So, How Much Bitcoin is Gone Forever? The numbers
Current estimates suggest that around 3.7 million Bitcoin may be gone forever, representing about 20% of the currently minted Bitcoin. This sizeable loss is attributed to three main reasons: Satoshi’s untouched stash, lost private keys, and intentionally burned Bitcoin.
However, these estimates vary depending on sources. Some sources estimate that around 2 million Bitcoin is gone forever, while other sources estimate that number to be much higher. According to data from Glassnode, the total amount of long-term held or potentially lost Bitcoin is now close to 34% of the current supply. This equates to approximately 7,131,084 Bitcoin held in these wallets, further emphasizing the dynamic nature of Bitcoin’s circulating supply.
There is no way to find out the exact number, because Bitcoin is decentralized and it is impossible to know all the accounts that are no longer accessible.
Satoshi’s Untouched Stash
Satoshi Nakamoto, the pseudonymous creator of Bitcoin, is believed to have mined approximately 1.1 million BTC in the first few months of Bitcoin’s existence. However, these coins haven’t moved since they were mined, leading to a general consensus that Satoshi’s Bitcoin holdings are out of circulation. Consequently, this reduces the available supply by about 5.9%.
When Bitcoin from a wallet that hasn’t been touched since the early days is moved, it often leads to speculation that Satoshi has returned. This speculation can cause fluctuations in Bitcoin’s price, as it introduces the possibility of a large influx of previously locked-away Bitcoin into the market.
Lost Private Keys
Another significant contributor to the loss of Bitcoin is the loss of private keys. To transfer Bitcoin, owners need access to their private keys or recovery phrases. Hence, anyone who loses access to these will also lose the ability to spend their Bitcoin. While most of the time this only results in the loss of a small amount, there have been instances where thousands of Bitcoin were lost in one fell swoop. For instance, there was a case where a man threw away a hard drive containing 7,500 BTC.
Moreover, Bitcoin owners who’ve passed away without sharing their private keys have also contributed to Bitcoin’s inaccessibility. For example, the 30-year old founder of Canadian cryptocurrency exchange QuadrigaCX died and took with him the private keys to around $190 million worth of various cryptocurrencies, including close to 1,000 BTC. In another case, a Reddit user found an old computer belonging to his late brother, who owned 533 Bitcoin, but the hard drive was missing.
While it’s impossible to pinpoint exactly how much Bitcoin has been lost due to negligence or misfortune, the amount is likely in the tens of thousands, at the very least.
Intentionally Burned Bitcoin
An often overlooked aspect of Bitcoin loss is intentional burning. This occurs when Bitcoin is sent to a ‘burn address’, which is essentially a Bitcoin vanity address with no known private key. Consequently, any Bitcoin sent to such an address is likely gone forever.
Over the years, a number of burn addresses have been used for various purposes, including as part of Counterparty’s 2014 Proof-of-Burn event. To date, more than 2,700 BTC have been sent to over 100 suspected burn addresses, removing approximately $30 million worth of Bitcoin from circulation.
The Curious Case of ‘Lost’ Bitcoin
Interestingly, as Bitcoin’s price continues to break records, there’s some indication that ‘lost’ coins may not be lost forever. About $7 billion worth of Bitcoin, previously thought lost or HODLed, has reemerged since the bull run that started in October 2020.
Conclusion
The question of how much Bitcoin is gone forever is complex, with varying estimates based on assumptions and interpretations of what constitutes a ‘lost’ Bitcoin. The three main reasons for Bitcoin being lost include Satoshi’s untouched stash, lost private keys, and intentionally burned Bitcoin. However, it’s important to note that ‘lost’ Bitcoin may not necessarily be gone forever, as demonstrated by the reemergence of $7 billion worth of Bitcoin during the recent bull run and the 34% of Bitcoin that is considered long-term held or potentially lost.
Understanding the dynamics of Bitcoin’s circulating supply is crucial for investors and traders, as it offers insights into Bitcoin’s scarcity, value proposition, and potential market movements. As Bitcoin continues to evolve and mature as an asset class, the mystery of how much Bitcoin is gone forever will continue to intrigue and challenge the crypto community.