There is this very popular belief that goes like “oh hey, nothing ever really gets missing or lost on the internet, and that it is all stored up somewhere in some cloud or on a database”. Well something seems to be blurring that line of truth and even the basis of that very belief; and this is none but the “infamous” Bitcoin. Imagine it as shipment getting lost at sea due to a tempest or losing a couple of cents because your pocket was torn, either way bitcoins in seven digit figures are said to be “missing” according to a new study. Apparently this study also speculates that when about all 21million bitcoins are mined by the next 23 years, the official amount generated for spending or trading will be noticeably lower.
This is all based on a recent research by Chainalysis. The digital forensics team discovered that about 2.78 – 3.79 million bitcoins have been lost entirely from the system: estimates of an extreme low to that of an extreme high, signifying that either way the amount of bitcoins lost are about 17% – 23% of the ones that are still available today. And looking at the current price of a single bitcoin today ($9,400), that’s a whole lot of money that’s been “lost”. Even though most people have hypothesized the number of bitcoins that have been lost, that of Chainalysis is a lot more trusty as it is based on thorough analysis of the network that records all bitcoin transactions; blockchain. Whereas Chainalysis have been a bit secretive with information on the exact method they used for the calculation of these lost bitcoins, they happened to categorise their findings into; strategic investments, the about one million bitcoins belonging to Satoshi, buying/selling, bitcoins mined since the start of 2017, and those that have been “out of circulation” in the past two to seven years. Of these they found out that none of those mined in the year 2017 had been lost, about 4% of the ones within the strategic investments and buying and selling category had been lost. Chainalysis also believes that about 30%-50% of the bitcoins that have not been in active circulation from about two years ago are lost, as well as the original coins of Satoshi Nakamura, the strange creator of this cryptocurrency.
Forks and the Lost Bitcoins
They(Chainalysis) admitted that it was very difficult to determine who owned which wallets and whether most of these owners had not lost their private keys, leading to the question “how do you know which coins are still in circulation?”. They revealed that “forks” in the network often made most of the owners of these wallets move their coins to avoid permanent loss, thus in circumstances like that they were able to identify which coins were still in circulation and which ones were not. The research did not include coins that had been hacked or stolen into its category of “out of circulation” coins. This been due to the fact these coins had only changed owners and were now in the hands of the hackers or thieves who could now circulate them, thus making them still active or in circulation. As to why they decided to make such a huge assumption that Satoshi’s coins are lost, is still to be determined. Yet still one thing is evident; should this claim prove false, the number of bitcoins in circulation are going to sky rocket and definitely give everyone the shock of a lifetime.
According to a report by Fortune, one of Chainalysis’ experts had this to say about the increasing scarcity of bitcoins in the market and if the market had already factored the price of these missing coins into the value of bitcoin.
“On the one hand, direct calculations about market cap do not take lost coins into consideration. Considering how highly speculative this field is, those market cap calculations may make it into economic models of the market that impact spending activity. Yet the market has adapted to the actual demand and supply available – just look at exchange behaviour. Furthermore, it is well known monetary policy procedure to lower or increase fiat reserves to impact exchange rates.”
If anything is for sure it’s this: that more bitcoins will get lost in the future, but the very rate at which they will be disappearing will be relatively lesser as people are beginning to realise the value of bitcoins and are going to be much more cautious and security conscious about their bitcoins and wallets.
- American Express Partnership Sets Ripple Into High Priority Chinese Market - Nov 14, 2018
- What To Expect In Ethereum Scalability 2019 And Beyond - Nov 14, 2018
- Ethereum Sees Above Ground 200 Again After JP Morgan Statement - Nov 5, 2018
- Bounty Hunts And “All About Freedom” – October’s IOTA In Retrospect - Oct 29, 2018
- Shenzhen Court Rules For Bitcoin Transactions In China - Oct 26, 2018
Know more than others on any Blockchain Party!
Join more than 5000 others to receive the breaking news and weekly summaries! No ICO spam, we promise.
You have Successfully Subscribed!