Cryptocurrency enthusiasts and investors have been captivated by Bitcoin's scarcity since Satoshi Nakamoto first created it. With a limited supply of 21 million Bitcoins expected ever to exist, the digital coin's price has shot up and dropped dramatically as investors and traders try to catch the highs and lows. But a big chunk of the Bitcoin is already lost.
How many Bitcoin are lost?
However, something that's often overlooked in conversations about Bitcoin's scarcity is how many Bitcoins have already been lost. Coins can be lost for a variety of reasons, including people forgetting their private keys or losing access to their wallets. Unlike traditional banks, there is no central authority that can help people find and recover their lost Bitcoin.
So, just how many Bitcoins are already lost? While no one knows for certain, several studies and estimates have been made. In 2017, Chainalysis suggested that as many as four million Bitcoins may have been permanently lost. The following year, a report by Coin Metrics estimated that up to 3.8 million Bitcoins are already gone for good.
You've probably heard about James Howells. He was doing some housecleaning in 2013 when he mistakenly threw out a hard drive that contained 8,000 Bitcoin he had mined.
What does this mean for Bitcoin's scarcity?
Well, the lost coins are no longer part of the supply - they cannot be traded, used, or mined. This means that the overall supply of Bitcoin is already lower than the 21 million cap that was set. As a result, the scarcity of Bitcoin is even higher than many people realize.
Speaking of mining, it's worth noting just how many Bitcoins have yet to be mined. As of August 2021, around 18.8 million Bitcoins have been mined, leaving around 2.2 million Bitcoins left for miners to discover. This may seem like a lot, but it's important to remember that Bitcoin mining becomes more challenging over time, with the reward for a successful block discovery decreasing by half about every four years.
How long will it take to mine all of the remaining Bitcoins?
If the network's hash power remains constant, the last Bitcoin won't be mined until the year 2140. This means that while many people may see Bitcoin's scarcity as a reason to invest in it, it's important to remember both the lost coins and the remaining coins yet to be mined.
In conclusion, Bitcoin's scarcity is one of the most fascinating aspects of the cryptocurrency world. However, it's important to remember that there are already many lost Bitcoins that are contributing to the overall scarcity.
So remember kids, don't be like James Howells. Store your seed safely!