About 7.8 million Bitcoins have been permanently lost

Bitcoin (BTC), a decentralized digital currency based on blockchain technology, has seen much of its supply lost over the years. These lost Bitcoins are usually inaccessible due to forgotten passwords, discarded hardware, or other unfortunate circumstances.

It is estimated that approximately 7.8 million Bitcoins have been lost, which translates to approximately $540 billion at the time of writing. Whether these lost Bitcoins can be recovered or not is a question that we will try to explore in this article.

What are Lost Bitcoins?

The increase in the number of Bitcoins lost coincided with the rapid growth of the cryptocurrency industry in 2021. Many early investors, who bought the King Coin when its value was minimal, remembered their purchase and were unable to return for one of the reasons above in their possession, which means that these Bitcoins can be seen as lost.

Lost Bitcoin refers to the digital currency that holders no longer have access to or can no longer locate. Bitcoin, like other cryptocurrencies, is stored in different types of wallets, including software, hardware, custodial, and non-custodial options. Regardless of the type of blockchain wallet, there is always a risk of losing access to your Bitcoins.

When Bitcoin is truly lost, it becomes irrecoverable. While temporary misplacement is possible, such as transferring funds to the wrong wallet, complete loss of access makes Bitcoin permanently inaccessible.

How are Bitcoins lost?

There are several factors that contribute to lost Bitcoins:

• Inaccessible wallets: Some early adopters and miners stored their Bitcoins in wallets that are now inaccessible due to lost passwords, hardware failures, or other reasons. Losing seed phrases is also a significant risk. It is therefore recommended to store seed phrases safely, for example in a safe, to prevent loss.
• Destroyed Private Keys: Losing access to the private key associated with a Bitcoin wallet address also renders those Bitcoins unrecoverable.
• Negligence: Over the years, people have accidentally deleted wallets or thrown away old hard drives containing Bitcoins.
• Forgotten passwords and hardware errors: Countless individuals have lost access to their bitcoins due to forgotten passwords or hardware errors.
• Sent to incorrect addresses: Many people have also accidentally sent their BTC to incorrect wallets that are no longer active or have lost access to them.

Real cases of lost Bitcoins

As mentioned, there have been several known cases over the years of individuals/entities losing access to their Bitcoins. Below we have set out some examples:

1. Rhonda Kampert:

Rhonda, an early adopter, purchased six Bitcoins in 2013 at a price of about $80 each. She spent some of her digital money, but forgot the rest. In 2017, when the value of Bitcoin rose to almost $20,000, she tried to log in and cash out, but realized she was missing some login details.

2. James Howells:

James was active as a miner in 2009 and managed to obtain approximately 8,000 BTC with his gaming console. Unfortunately, he accidentally threw away the hard drive containing the Bitcoins. The value of these lost coins today would be hundreds of millions of dollars.

However, the man has not given up his search and has been trying to get his lost BTCs back for years. Now, however, the man has decided to take the dump to court in a desperate attempt to recover his more than $560,000,000.

3. Stefan Thomas:

Stefan Thomas, a software developer, discovered that his old Bitcoin wallet of over 7,000 BTC was worth more than $320 million in 2021. Stefan bought the Bitcoin holding in 2011 when one BTC was worth less than $20. This would still have been a substantial investment, but nothing close to the value it would have ten years later.

How many Bitcoins have been lost?

According to data shared by on-chain data provider IntoTheBlock, it appears that a substantial portion of Bitcoin’s total supply has disappeared from circulation. Of the just over 19 million Bitcoins mined, about 29% have remained inactive over the past five years, as per a tweet from the data aggregator.

The implications are significant, suggesting that a significant number of Bitcoins have been irreversibly lost over time. A tweet from Glassnode reflects this sentiment and indicates that 7,781,224.168 BTCs have been permanently lost.