“If my wife knows, I’m dead,” he admitted, asking News.com.au not to share his real name, and referred to as ‘Alex.’
A self-confessed technology enthusiast, he began mining bitcoin, at the time getting a few coins every day. When the bitcoin program began to take up too much space on his computer, he deleted it and backed it up on a USB drive. Years later, as the value of bitcoin reached $1000, he remembered the USB drive; only to find that it had malfunctioned, and the bitcoins had been permanently lost.
Sadly, he isn’t alone in his misfortune. According to Fox News, an estimated 3.8 million bitcoin are lost, quite possibly irrevocably. As of December 4, 2017, that would equate to close to $42 billion in fiat currency or just over 18 percent of the cryptocurrency’s total supply.
This may well outstrip the combined value of all the gold bullion ever lost, lying in undiscovered shipwrecks under the ocean or buried beneath hundreds of feet of soil and snow.
Bitcoin is so securely encrypted that in some cases, it becomes more of a curse than a blessing. In initial years, should an owner have lost access to his wallet, the bitcoins would almost certainly have been lost forever.
More recently, however, the most trusted of wallets and exchanges have rolled out recovery options for just these cases – but what happened to all the bitcoins that were lost?
Misplaced bitcoins do not disappear; they remain a visible but inaccessible part of the blockchain. In November 2017, the number of bitcoins said to be out of circulation was approximately five million, although it is not immediately clear how many are permanently lost and how many are simply stored by the owners.
In a study conducted by Chainalysis, it is estimated that 30 to 50 percent of dormant bitcoins are permanently irretrievable…