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$74 Billion in Lost Bitcoin - Modern Day Buried Treasure

In 2018, the digital forensics firm Chainalysis has estimated that around 35% of all bitcoin is likely lost.

This is approximately 7.4 million of the 21 million bitcoin that will ever exist. Which this month (August 2019) has been averaging at a market value of $10K per bitcoin. Extrapolating, this is over $74 billion worth of bitcoin.


Losing Bitcoin


To be more exact, the bitcoin aren't lost but frozen. Bitcoin are inaccessible to their owners without a private key, a 256-bit number, usually saved in a wallet file. It is these keys, stored on hard drives or flash drives, that people misplace/lose/throw away/erase. One of the most infamous stories involves James Howell, a British man who owned upwards of 7,500 bitcoins. Howell accidentally threw out the hard drive containing his wallet file, thus losing all access to his Bitcoin. At the time he lost it, the digital currency were valued at $7.5 million. The fortune is currently buried at his local landfill in Newport, South Wales. And, despite his desire to search, his local city council officials won't allow him due to safety concerns. These 7,500 bitcoins are now estimated to be worth $75 million. Similarly, Campbell Simpson threw away a hard drive containing 1,400 bitcoin, currently valued to be worth $14 million. Even Elon Musk seems to have lost his bitcoin.


To be clear, we aren't discussing how people lose bitcoin through careless/frivolous spending or outright theft. Those bitcoin have just been transacted and are under different ownership but they are still "active" coins. The bitcoin we're discussing has become forsaken, abandoned and inaccessible, buried forever in an online vault. Forgotten pins, key holders who have passed away, overwritten USB sticks; there are countless ways people have lost their bitcoin but what they have in common is lost passwords/keys.


Bitcoin Protection


Your bitcoin is protected with a 256-bit key which has 2^256 possible combinations or 115,792,089,237,316,195,423,570,985,008,687,907,853,269,984,665,640,564,039,457,584,007,913,129,639,936 possible combinations. It's been estimated that even the fastest supercomputer in the world (Tianhe-2) would take millions of years to crack 256-bit encryption.



Bitcoin Recovery


The US Treasury Department replaces and redeems an estimated $30 million in mutilated, damaged, and burned currency every year. However, there is no one that can really help you if you lose your bitcoin password since there's no way to reset the password. Besides dumpster diving, some desperate investors have even resorted to hypnosis in an attempt to conjure up their keys.


However, one company offers a glimmer of hope to those who lost their keys. Wallet Recovery Services, managed by Dave Bitcoin (an alias), claims a 30% success rate in hacking passwords by brute force decryption and charges his clients 20% of the amount in the wallet.


Good luck to all you investors and keep your wallets safe~

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