Recent news events serve as a very good reminder of why that is...
Recent events out of Canada remind us why the supply of bitcoin is actually a lot less than what we see on paper.
If you are not familiar, there was an exchange in Canada, one of the largest in the country in fact, that lost a large portion of their holdings.
Specifically, they lost about $190 million worth of crypto.
What the heck happened?
Well, holding your coins in cold storage is a great idea, in theory.
It makes it much more difficult for hackers or bad actors to make off with your inventory and makes investors and users of your platform feel that much more secure.
The only problem is that you have to be able to access your cold storage.
In this case, the Canadian exchange had roughly $190 million worth of crypto in cold storage that was set up and only accessible by its founder.
That is great, except if your founder dies.
Which is exactly what happened.
The rest of the employees at the exchange have been scrambling for ways to figure out how to access the funds but so far their attempts have been futile.
More about it can be seen here:
https://www.ccn.com/190m-gone-how-canada-biggest-bitcoin-exchange-lost-it
There will never be 21 million bitcoins.
According to the news article above, the exchange has lost access to roughly 26,500 bitcoins.
Those bitcoins may forever be removed from the global supply, if they are never able to be accessed and recovered.
Combine that information with the report that came out late last year that said roughly 4 million bitcoins have been permanently lost and another 2 million have been stolen.
Making for roughly 6 million coins that are likely never to be recovered.
That means that when the mining eventually turns off and 21 million coins will have been created, there will be at least 6 million plus coins that are out of circulation.
(Source: https://www.ccn.com/190m-gone-how-canada-biggest-bitcoin-exchange-lost-it)
Which means, the supply of bitcoin is actually about 29% LESS than the numbers we see out there.
That means, technically, the actual market cap of bitcoin is a lot closer to $43 billion than it is to the $60 billion you see out there.
Keep in mind there is always the chance that some of those coins may be recovered some day, but there is also the chance that new coins will also be lost going forward.
Which, the latest developments from the Canadian exchange are a perfect reminder of.
Either way, the final actual supply of bitcoins out there in circulation is likely to be a lot less than that 21 million.
Stay informed my friends.
Image Source:
https://bitcoinist.com/almost-four-million-bitcoins-may-have-been-lost-forever/
Follow me: @jrcornel
Wow! This article was written in gold words. I'm appreciated a lot.
Before i thought that only 3,7 million bitcoin is gone forever. Now I see, that numbers way bigger than I'm expected.
According Investopedia.com
In the U.S., there are 13.6 million people with $1 million or more in wealth, up 283,000 from the previous year. By the year 2021, the number of millionaires will reach 18 million – a 33% increase from current figures.
So it means that supply of bitcoin is not enough for single millionaire in the U.S but wait we have the rest of the world with much more millionaires.
So my question is: Guys do you see what I saw?
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Yep, that is why bitcoin is either going a lot higher or going to zero if doesn't catch on. The outcome from here is likely binary. :)
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I have seen a more frightening figures.
22.6 million people worth more than $1M today.
source: https://www.theguardian.com/news/2019/jan/16/kerching-400000-new-dollar-millionaires-created-in-2018
If all them would like to divide the BTC pie equally today, gues what ?
13.4M : 22.6M is....
0.59 BTC to each of them.
And if this is still not enough....
400,000 NEW dollar millionaires created in 2018 alone
657000 new BTC mined in 2018
657000 :400000= 1.64 BTC for each new member of the club.
And 0.00 to you. And me.
This ratio and growing pace is so impressive to me.
Are you still considering to sell your BTC, while looking at the -83% price drop ???
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Very nice comment and it makes me feels like we should sell our last pair of socks then buy btc and HODL till oblivion :D
And there to many evidence that we won't regret :)
Thanks @onealfa
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Bad idea, bad (about last pair of socks)
NEVER put all eggs in one basket. No matter how much you trust it.
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@onealfa Sveiki Viktorai Sutinku puikiai pasakete ir tai yra labai labai geras patarimas.Ir kaip kad didžiausias pasaulio investuotojas Warrenas Buffetas pataria, niekada nerizikuoti viskuo į vieno tipo investicija, dėl tos priežasties ir naudojam portfelio diversifikacijas :)
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As I see it all, things may be even worse. Making a presumption, that losses will continue, even though by 5% less and less year after year, I'm getting this picture:
https://steemitimages.com/p/2bP4pJr4wVimqCWjYimXJe2cnCgnCshJtLP3zPBogr2
In reality - we are a bit ahead of the schedule, (on a time scale) which is natural.
I took 5% improvement on losses, and initial lost qty right of my head. Your mileage may differ.
But the general picture probably will remain.
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That could certainly be. Nice chart!
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This is indeed one of the great hurdles for cryptos.
With gold, it can always be found... long after you are dead, and the money can still be used.
John McAffee talks often about the amounts he has lost.
But, rarity is what creates value.
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Yea there needs to be multiple fail safe points with cold storage. Having just one is crazy.
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quadrigacx-death-funds-moved
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Yes, that story gets a bit more murky by the day...
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As the song says, "Never, say never!" Right now it's nearly impossible to break into a bitcoin wallet...but, perhaps with advances in computing in the coming years, it might be easier and easier. Or they could always just fork them out, like they proposed with Steemit.
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As the length of the private key is well defined, it only requires powerful enough cluster of computers to try out every possible private key and scan the block chain using that private key. As a lot of computers are already using SSD disks, I/O speed is not limited to breakage of spinning disks due to excess temperature.
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The quantum computer... though for doing what you are talking about, the technology is not as close as some like to speculate.
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I was thinking more about how trojans and distributed computing work... Basically give every computer a slice of keyspace to scan for and then send back all the keys that result in non-zero balance. You don't actually need to scan all blocks for any key that is actually in use, because first block that has transaction signed with that private key is enough to prove that the key is valid.
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The quantum PC's do not scares me at all. They will not appear over night. By the time they grow enough to make a thread to cryptos, most crypto algo's will be mutated to a much much much stronger methods.
Shield and sword. Eternal, never ending struggle
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Powerful computers and cryptography live symbiotic life... Without one there is no other... It's not a fight at all.
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Which means only 15 million Bitcoins.
The thing is, we only need 15 million people to buy 1 Bitcoin each, and this thing will fly to Mars. So why doesn't this happen?
Or 100(0) millionaires, buy everything right now. And not when Bitcoin is worth $100,000 in the future. I don't get it. Do you?
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I think in time, they will. Once the inflation rate falls below the dollar and gold there will be more of an incentive perhaps as a store of value.
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I think Bitcoin will probably be more...I wrote about this post early this morning ( https://steemit.com/bitcoin/@kyusho/it-just-makes-you-gasp-131787aafc534 ),there is not enough Bitcoins for the Billionaire and Millionaire... you got one,you are a rare person indeed.
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That is a good point.
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Good post my friend 👍🧐👍
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Thank you corndog.
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p.s this article one of the best articles i ever read about crypto's
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Thank you!
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The whole QuadrigaCX story has a bit of a stank on it... I would think that more info will be revealed and some shady operations will be revealed. That being said, however, i think the 10-20% figure for lost bitcoins is fairly accurate — making the ones that are still accessible (and yet to be mined) all the more valuable.
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I think you are probably right. It sounds almost too 'dumb' to be true.
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😳😳😜😜😂🤣
https://www.zerohedge.com/news/2019-02-06/mystery-surrounding-lost-150m-crypto-fortune-deepens-analysts-question-exchanges
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I wonder if Satoshi (whoever he/she/they are) considered this possibility when creating Bitcoin?
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Probably. It is like anything in life, if you don't take measures to protect things, they can be lost.
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Don’t forget the million Satoshi is said to have mined and never moved either. Just another example of how scarce they will become as more people hold them as well.
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I am pretty sure that is included in the 4 million that are considered 'lost'. Since they have never moved...
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Ya, i’ve been telling ppl that for a while now... i invision a future where bitcoin treasure hunters are an actual thing lol.
Whoever finds the 26000 btc years from now.... jeezus!
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Yep, perhaps there will be a way to unlock those coins at some point.
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I imagine that the incentive is high enough for that to come to pass ;)
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Lots and lots of people forget and that will make bitcoin more rare
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That's why we can say $20,000 on 1 BTC it's cheap. In 10 years I bet at least 3 M Bitcoin will be lost
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According to that report, at least 6 million already are. Though I am not sure why the 2 million that were stolen are included in the 'lost' section.
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Yes.. so if in 10 years 6 M are lost, let's say in the next 10 only 3 M will be lost because now people are more careful..so almost half of the total supply will dissapear in the next years...
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Well there is only about 3.5 million more bitcoin ever to be created from now until about 2140... :)
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In a somewhat related potential story, it occurred to me a few weeks back that if steem blockchain's very own anonymous core contributor and heavily influential Lord of witnesses freedom were to cross the rainbow bridge we would be essentially stuck with his appointments in the top 20 indefinitely.
Which seems to be another chink in the armor of this particular adventure in blockchain trailblazing.
But, yes this does seem too stupid to be real. I assumed if I were smart enough to realise a safety deposit box with my keys and a will would be essential if I ever had enough crypto to pass down, then so had all the whales.
Duh doy
My last thought is most all wealth on earth is willed to heirs so in a crypto future these untimely deaths etc must have some better planning or else this will be a theme.
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Yes that is correct. He could almost set up his own witness nodes and vote himself in several spots if he wanted. He can't technically right now because his votes aren't that powerful, yet.
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I was not aware of that case. Bad luck for the coin holders.
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That was a bit of an inept way to handle the cold wallet of the exchange. When I read about it a couple of days ago, I was completely stunned...
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Yea, there may be more to the story... The official story sounded too 'dumb' to be true.
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Yeah, I caught wind of that too... Expensive lesson for those affected...
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It will be interesting to see what ends up coming out.
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I read today that there might NEVER have been ETH and BTC cold wallets!
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Yep, saw that one too. It is starting to smell like an exit scam more than anything else.
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Yeah, I caught wind of
That too... Expensive lesson
For those affected...
- bengy
I'm a bot. I detect haiku.
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