Budapest Post

Cum Deo pro Patria et Libertate
Budapest, Europe and world news

There's roughly $140 billion of inaccessible bitcoin right now - or 20% of the world's limited supply. Here's what could happen to it.

There's roughly $140 billion of inaccessible bitcoin right now - or 20% of the world's limited supply. Here's what could happen to it.

The inaccessible tokens are currently kept out of circulation, but systems can be created to recover the lost sums, according to one bitcoin expert.
Cryptocurrency enthusiasts praise bitcoin's decentralized nature. Yet the imperfect methods used to secure the digital tokens are pulling millions of bitcoin out of circulation with little hope of recovery.

Bitcoin owners hold private keys necessary for spending or moving tokens. These keys exist as complex strings of data and are often stored in protected digital wallets.

Those wallets are then typically protected with passwords or authentication measures. While their complexities allow owners to more securely store their bitcoin, losing keys or wallet passwords can be devastating. In many cases, bitcoin owners are locked out of their holdings indefinitely.

Roughly 20% of the 18.5 million bitcoin in existence is estimated to be lost or trapped in inaccessible wallets, The New York Times reported on Tuesday, citing data from Chainalysis. That sum is currently worth about $140 billion. These bitcoin remain in the world's supply and still hold value, but they're effectively kept from circulation.

Put simply, those coins will stay trapped indefinitely, but their inaccessibility won't change the price of the cryptocurrency.

"There's this phrase the cryptocurrency community uses: 'not your keys, not your coins,'" Jimmy Nguyen, president of the Bitcoin Association, told Insider.

For now, the adage holds true. Some exchanges such as Coinbase have some emergency recovery measures that can help users regain access to forgotten keys or passwords. But exchanges are less secure than wallets and some have even been hacked, Nguyen said.

The bitcoin community is now at a crossroads, where members are split on whether bitcoin should keep its rigid security methods or trade some of its decentralization for user-friendly safeguards.

Nguyen lands in the latter group. The cryptocurrency advocate argued that mechanisms should be created to allow users to recover inaccessible bitcoin in cases of forgotten passwords, estate transfers, and incorrectly addressed payments. The absence of such systems maintains a barrier between cryptocurrency enthusiasts and the population that hasn't yet warmed to bitcoin.

"If I hold the keys to your house, it doesn't mean I own the keys. I might've stolen the keys to your house. You might have lent me the keys," Nguyen said. "It doesn't prove who has ownership of that property or that asset."

Maintaining the current method of storing bitcoin also cuts into its value, both as a new form of payment and as a security, he added.

"There is an inconsistency, if not downright hypocrisy - among the bitcoin supporters, because they want to advance this narrative that you must have the private keys for the coins to be yours," Nguyen said. "If they want the value of the coin to grow because it's growing in usage, then you have to adopt a much more open and user-friendly approach to bitcoin."
AI Disclaimer: An advanced artificial intelligence (AI) system generated the content of this page on its own. This innovative technology conducts extensive research from a variety of reliable sources, performs rigorous fact-checking and verification, cleans up and balances biased or manipulated content, and presents a minimal factual summary that is just enough yet essential for you to function as an informed and educated citizen. Please keep in mind, however, that this system is an evolving technology, and as a result, the article may contain accidental inaccuracies or errors. We urge you to help us improve our site by reporting any inaccuracies you find using the "Contact Us" link at the bottom of this page. Your helpful feedback helps us improve our system and deliver more precise content. When you find an article of interest here, please look for the full and extensive coverage of this topic in traditional news sources, as they are written by professional journalists that we try to support, not replace. We appreciate your understanding and assistance.
Newsletter

Related Articles

0:00
0:00
Close
16 Billion Login Credentials Leaked in Unprecedented Cybersecurity Breach
Senate hearing on who was 'really running' Biden White House kicks off
Hungary Ranked Among the World’s Safest Travel Destinations for 2025
G7 Leaders Fail to Reach Consensus on Key Global Issues
FBI and Senate Investigate Allegations of Chinese Plot to Influence the 2020 Election in Biden’s Favor Using Fake U.S. Driver’s Licenses
Trump Demands Iran's Unconditional Surrender Amid Escalating Conflict
Shock Within Iran’s Leadership: Khamenei’s Failed Plan to Launch 1,000 Missiles Against Israel
Wreck of $17 Billion San José Galleon Identified Off Colombia After 300 Years
Man Convicted of Fraud After Booking Over 120 Free Flights Posing as Flight Attendant
Iran Launches Extensive Missile Attack on Israel Following Israeli Strikes on Nuclear Sites
Beata Thunberg Rebrands as Beata Ernman Amidst Sister's Activism Controversy
Hungarian Parliament Approves Citizenship Suspension Law
Prime Minister Orbán Criticizes EU's Ukraine Accession Plans
Hungarian Delicacies Introduced to Japanese Market
Hungary's Industrial Output Rises Amid Battery Sector Slump
President Sulyok Celebrates 15 Years of Hungarian Unity Efforts
Hungary's Szeleczki Shines at World Judo Championships
Visegrád Construction Trends Diverge as Hungary Lags
Hungary Hosts National Quantum Technology Workshop
Hungarian Animation Featured at Annecy Festival
Israel Issues Ultimatum to Iran Over Potential Retaliation and Nuclear Facilities
UK and EU Reach New Economic Agreement
Coinbase CEO Warns Bitcoin Could Supplant US Dollar Amid Mounting National Debt
Trump to Iran: Make a Deal — Sign or Die
Operation "Like a Lion": Israel Strikes Iran in Unprecedented Offensive
Israel Launches 'Operation Rising Lion' Targeting Iranian Nuclear and Military Sites
UK and EU Reach Agreement on Gibraltar's Schengen Integration
Israeli Finance Minister Imposes Banking Penalties on Palestinians
U.S. Inflation Rises to 2.4% in May Amid Trade Tensions
Trump's Policies Prompt Decline in Chinese Student Enrollment in U.S.
Global Oceans Near Record Temperatures as CO₂ Levels Climb
Trump Announces U.S.-China Trade Deal Covering Rare Earths
Smuggled U.S. Fuel Funds Mexican Cartels Amid Crackdown
Austrian School Shooting Leaves Nine Dead in Graz
Bezos's Lavish Venice Wedding Sparks Local Protests
Europe Prepares for Historic Lunar Rover Landing
Italian Parents Seek Therapy Amid Lengthy School Holidays
British Fishing Vessel Seized by France Fined €30,000
Dutch Government Collapses Amid Migration Policy Dispute
UK Commits to 3.5% GDP Defence Spending Under NATO Pressure
Germany Moves to Expedite Migrant Deportations
US Urges UK to Raise Defence Spending to 5% of GDP
Israeli Forces Intercept Gaza-Bound Aid Vessel Carrying Greta Thunberg
IMF Warns of Severe Global Trade War Impacts on Emerging Markets
Low Turnout Jeopardizes Italy's Citizenship Reform Referendum
Transatlantic Interest Rate Divergence Widens as Trump Pressures Powell
EU Lawmaker Calls for Broader Exemptions in Supply Chain Legislation
France's Defense Spending Plans Threatened by High National Debt
European Small-Cap Stocks Outperform U.S. Rivals Amid Growth Revival
Switzerland Proposes $26 Billion Capital Increase for UBS
×