An estimated $30 billion in Bitcoins may be lost forever

close

Video

Should you care about Bitcoin?

Shama Kabani on a new digital currency and the issues that could arise with it

Though there may be hundreds of millions of dollars worth of gold bullion scattered around the world’s oceans in undiscovered shipwrecks, much more digital coinage may have been lost in the past decade alone. Of the 16.4 million Bitcoins said to be in circulation in the middle of 2017, close to 3.8 million may have been lost. That works out to more than $30 billion.

One of the best features of Bitcoin is its ability to be stored offline on local hardware — so called, “cold storage.” Having a cryptocurrency “wallet” on a hard drive or flash drive means it is protected from being stolen online, but if you lose access to that device, those coins are also lost forever. That’s where the majority of the estimated lost horde of cryptocurrency has gone, with many early miners and investors misplacing the currency before it was ever worth anything.

As it stands, there are said to be some 5 million Bitcoins that are out of circulation (not actively being traded). According to estimations made by Chainalysis, via Fortune, as many as half of those may have gone missing, been lost, or misplaced over the near-nine years that Bitcoin has been active. That works out to around 2.5 million Bitcoins, or just over $20 billion at the time of writing.

That is a relatively high estimation of how many of those coins have been lost, with more conservative estimates pegging it at more like 30 percent, or around 1.5 million Bitcoins. But that would still work out to just under $13 billion.

A further million coins are said to be lost, due to them being the original Bitcoins that pseudonymous Bitcoin creator Satoshi Nakamoto mined before disappearing. Although it’s always possible that he will re-emerge and claim his fortune, it seems more likely at this stage that his $8 billion-plus fortune will remain untouched.

Chainalysis also estimates that some two percent of all Bitcoins traded throughout 2017 so far were lost, too. That accounts for a billion dollars’ worth of the currency. Although such losses are expected to continue, they should gradually become rarer occurrences, due to the added care owners are likely to take with their cryptocurrency since its value spike throughout the year.