At the beginning of 2022, 90% of the possible number of coins, almost 19 million, were mined in the Bitcoin network. The capitalization of the first cryptocurrency is about $750 billion. All bitcoins are distributed to 40 million wallets (according to the well-known CoinMarcetCup service).
Chainalysys, a digital asset analytics company, has estimated that out of the total amount of bitcoins available, about 20% or 3.7 million BTC has been lost. Given the current exchange rate, the value of the lost cryptocurrency is more than $150 billion.
Why there are 21 million bitcoins
Satoshi Nakamoto is the developer of the first cryptocurrency, bitcoin. He described the technology, created the blockchain code. According to his plan, bitcoin has a limited emission, which is equal to 21 million. There are many versions of why Nakamoto chose this particular value. No one can definitely answer, because Satoshi Nakamoto has retired and now nothing is known about him. Moreover, no one has ever seen the developer of bitcoin.
According to one version, limiting bitcoin production is necessary to fight inflation. The limited supply of cryptocurrency should affect the growth of the asset. After the money supply reaches the set level, miners will be able to earn only on commissions. In order for them to be profitable to mine coins, the bitcoin rate must rise.
According to calculations, the last BTC will be mined by 2140. At the same time, the complexity of mining will increase, the reward will fall. It will take several years to mine each new bitcoin.
There is a certain number of coins, access to which is blocked. Since 2009, about 3.7 million bitcoins have been lost. At the same time, there are certain criteria by which coins can be considered blocked. According to experts, dead assets include assets that are on wallets that have been inactive since March 2013. It was at this time that bitcoin gained recognition, and its price reached $100.
At the same time, there are specific coins that are classified as lost. They are known to the crypto community, they are not considered unknown. So, according to the analytical company Chainalysys, the following bitcoins are considered lost:
- 50 BTC is the first block that is not counted in the ledger.
- 100 BTC – duplicate transactions in the first version of the blockchain until 2012.
- About 30 BTC – mining errors.
- 2K BTC – Coins transferred to public addresses, a method used to burn cryptocurrencies in the early blockchain.
- 6 thousand BTC – errors in the programs of exchanges, wallets, exchange services.
Bitcoins are indicated, access to which is blocked, but they are known to the crypto community and experts. The rest of the cryptocurrency in the amount of 3.7 million BTC, which analysts consider inaccessible, was lost as a result of various actions of the owners.
About 200 thousand BTC were stolen by hackers, including from the well-known exchange Mt.Gox. and are motionless. After the implementation of the mechanism of return to circulation, they can be counted on again.
Reasons for losing bitcoins
There are several reasons why owners cannot access their assets:
- Loss of private keys or seed-phrase to restore access.
- The death of users, which resulted in the loss of private information.
- Loss of hardware cryptocurrency wallets with bitcoins.
- Loss of devices on which addresses were located (PCs, laptops, hard drives, and other drives).
This happened especially often during the birth of bitcoin and altcoins, in 2010-2012. At that time, no one really believed in the serious development of cryptocurrency, it’s high value. Now, when the total capitalization of all digital assets exceeds $2 trillion (it reached $3 trillion in November 2021), and the price of bitcoin is tens of thousands of dollars, many users have been looking for access to lost wallets for years.
Notable cases include:
- James Howles from the UK. In 2013, he accidentally threw away a hard drive that contained a cryptocurrency wallet with 7500 BTC. James promises to donate 25% of the amount to charity. At the same time, the city authorities refuse to give permission for excavations at the landfill.
- Brad Yasar from the USA. On his hard drive are several thousand bitcoins he mined in 2011. Brad has forgotten his wallet password and has been unsuccessfully trying to restore access to his assets for more than 10 years.
- Mircea Popescu from Romania. A well-known investor and cryptocurrency enthusiast died in Costa Rica. He owned about 1 million BTC, access to which was lost after the death of Popescu. At the same time, experts do not believe the words of the investor, they call the amount about 35 thousand BTC.
Among the 3.7 million BTC believed to be lost is one million bitcoins held in Satoshi Nakamoto’s wallets. They lie motionless, no one knows if anyone has access to these assets. Moving such a huge amount could bring down the cryptocurrency market.
There are cases of activating old wallets. So, at the end of 2021, 235 BTC moved from one address to another, another 550 BTC were sold. Cryptocurrency provides user anonymity, so the entire community can see the movement of assets, but there is no information about the identity of the owner.