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Nearly 4 Million Bitcoins Lost Forever, New Study Says (fortune.com)
An anonymous reader shares a report: According to new research from Chainalysis, a digital forensics firm that studies the bitcoin blockchain, 3.79 million bitcoins are already gone for good based on a high estimate -- and 2.78 million based on a low one. Those numbers imply 17% to 23% of existing bitcoins, which are today worth around $9,700 each, are lost. While others have speculated about the number of lost bitcoins, the Chainalysis findings are significant because they rely on a detailed empirical analysis of the blockchain, where all bitcoin transactions are recorded.
More like 4 million coins they just assume are lost forever. I'm not sure why everyone assumes Satoshi's original 1 million coins are just lost forever. I'd say he's likely just holding them and playing the long game on it. BTC is still fragile, and if he started cashing them in, people would likely freak out and prices might start plummeting, possibly sending BTC into a death spiral. If one really believes in the long term success of BTC, they'd hold those coins until BTC is a true success, is in use everywhere, and is as ubiquitous as credit cards. Then you can cash them in, people would say "holy shit, those coins WEREN'T lost" but it would have relatively little effect on bitcoin itself.
Likewise with many of the other "out of circulation" coins. I wouldn't be surprised if a lot of those people are just holding them. I'm sure some of it's lost, but I think 4 million is probably wildly overestimating.
Back in the beginning when you could do that on your home PC in a reasonable period of time.
Then I formatted the computer to restore the OS, and never thought of the wallet.dat.
Oh well.
We're not mining any new van Gogh paintings, and they are still pretty valuable.
A totalitarian government that wants to inflict maximum damage to cryptocurrency without firing a shot would just have to work on a worm that would target the users' wallets and make them inaccessible. The number of users that would have gone through the steps to enable recovery would probably be shockingly low.
>Think when the bubble pops it's all going away? Or do you think it will return to a baseline value and stabilize?
It's difficult to tell. It seems there's an unending stream of new kids finding this 'amazing new technology' and jumping in enthusiastically but uncritically - and a portion of those never get past the enthusiasm stage.
Then there's the 'get rich quick' people, who understand nothing at all about the system but can parrot talking points... they're the ones who would most likely move on to the next scheme when Bitcoin crashes in value.
Still... I'm not so sure there won't be a significant number of computers running full Bitcoin nodes and continuing the original blockchain for a long, long time, if only for some obscure geek cred. And those remaining users could still use it as currency.
A small enough group of users doing that and it'd probably have whatever (likely insignificant) value they assign to it at the moment, essentially rendering it even less stable than it is now. You know, "Hey, Joe... can I have a slice of pizza for a bitcoin???"
On the other hand, if you had them, the remaining bitcoins wouldn't have as high of a value either, only the bitcoins in circulation are actually valuable, losing a bitcoin actually increases the overall value of the remaining coins. The problem with the bitcoin-type places is bit-rot. Eventually, over long enough periods there won't be enough bitcoins anymore to go around because they've all rotted away (hard drive failures, owner death, loss of passwords etc) you won't have enough to even divide up.
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