According to a study, about 4% of circulating BTC is lost every year.
Satoshi Nakamoto considered the lost coins “a donation for everyone.”
One report estimates that every day 1,500 bitcoins (BTC) are irreversibly lost) due to shipping errors, lost private keys, unclaimed rewards by miners, death of their holders or other causes. This number exceeds the slightly more than 900 BTC that are produced daily by mining.
To reach this conclusion, the company Cane Island Digital Research (CIDR) assumes, based on past research, that since 2010 about 4% of circulating BTC is lost every year. They estimate this based on “own research” in which they assume a perfectly competitive market in which suppliers and demanders make rational decisions based on the total BTC available.
If this statement is true, the currently available supply of Bitcoin would be 13.9 million, almost 25% less than the 18.5 million that have been mined so far.
The conclusions reached by Cane Island are consistent with the results of an investigation that Chainalysis carried out in 2017. There it was shown that between 2.78 and 3.69 million BTC had been lost forever, which represented between 17% and 23% of circulating at that time.
It is important to clarify that this research considered as an inactive address (and therefore with their lost BTCs) to those that had no exit movements in the last three years.
Too high a number?
Not everyone agrees with the CIDR report, which also ensures that the amount of circulating BTC will never exceed 14 million. In response to a Tweet Timothy Peterson, director of the research company, several people raised their questions.
«1,500 Bitcoins Are Lost Every Day? That sounds too high a number. wrote renowned bitcoiner and author Michael Caras.
Another user will I ask to Peterson whether, according to him, the number of BTC lost daily could decrease as the price rises. He justified that thinking by saying that people would be more careful the more valuable their assets are. Peterson agreed with this possibility.
But Philip Gradwel, chief economist at Chainalysis, said that you can ‘assume that historical loss rates continue even now that prices are high and custody practices are better and safer. ‘
For CoinMetrics, there are only about 1.5 million Bitcoin lost.
Other investigations had reported considerably fewer bitcoins lost. For example, at the end of 2019, such as reported CriptoNoticias, CoinMetrics estimated that they were close to 1.5 million.
That report ranks lost BTCs as well. On the one hand, there are those that were sent to false addresses, that is, to those not associated with any known key. On the other hand, there are those BTC that have not moved for years and there are also those that were stolen and that, in many cases, have been immobile for years.
CoinMetrics concluded its presentation with a statement that can also be applied to the results of the Cane Island Digital Research: “The common adage that there can only be 21 million bitcoins in the world is an optimistic view.”
Lost Bitcoins: a donation for everyone
Although perhaps more optimistic it would be to be able to demonstrate with certainty that the circulating of Bitcoin was reduced considerably. If that happens, hodlers may benefit from an increase in the price of the cryptoasset as a result of the demonstrated reduction in their offering.
One of the key characteristics of Bitcoin is the scarcity of its coins. The lost bitcoins make it even more rare. Satoshi Nakamoto himself considered to the lost BTC as “a donation for all”. In his words, “The lost coins only make everyone else’s coins worth a little more.”