As Bitcoin mania continues to sweep the planet, recent news suggests that millions of the individual cryptocurrency coins could be lost forever. In today’s market, that represents around a staggering $30 billion that Bitcoin investors worldwide have lost. The most famous case is that of an Australian man, known only as ‘Alex’, who lost around $10 million worth of Bitcoins!
Don’t tell the wife!
As an early Bitcoin investor, Alex had mined the cryptocurrency from his personal computer at home. In the early days of Bitcoin, this was entirely possible and Alex usually mined a number of Bitcoins per day. As any sensible investor, Alex had his Bitcoins in an encrypted wallet that he transferred onto a USB stick for security when Bitcoin mining became impossible on his home PC.
What happens next is the bit Alex still hasn’t confessed to his wife! After forgetting about his Bitcoin hoard for a few years, he saw a report on the upward trend in its price and dug out his USB stick. Intending to cash in for millions, he was mortified to find that his USB stick wouldn’t work and his Bitcoins were lost forever!
Lost Bitcoins are common
Around 16.7 million Bitcoins are currently in circulation, of which there are four million lost ones. Digital forensics firm Chainalysis have studied the Blockchain technology underlying Bitcoin and come up with this figure based on their analysis of the findings there. This is a huge amount of the total amount in circulation and is 17 to 23 percent in percentage terms.
What is behind these lost Bitcoins?
With the current noise around Bitcoin, you would think it impossible for an investor to have some hidden away that they have forgotten about. Analysis of the findings by Chainalysis would actually back this up as it seems that the four million Bitcoins may not be lost in the traditional sense of the word.
A big portion of this four million is accounted for by investors who have deleted the private key needed to use them. Without this private key, you can not spend any Bitcoins you have mined. The problem is that, if you don’t have it yourself, it is practically impossible to find again due to Bitcoin’s inherent security. There is also the suggestion that some investors who mined Bitcoin in the early days are simply hanging onto their coins to sell at a later date.