James Howells threw a hard drive with 7,500 bitcoins away. He had mined the coins back when they were worth very little. He has yet to find his hard drive at the dump. Dump workers say he never will. Howell is not the first person – nor the last – to lose bitcoins.
According to the website btcburns.cf, 397 bitcoin addresses have burned 2,673.4075 bitcoins. There have been 15,617,100 bitcoins mined, meaning 0.018289588948355% of bitcoins created have been burned. Approximately 0.0002 are burned for each bitcoin mined. If this rate remains constant, 4,200 bitcoins will have been burned by the time the last bitcoin has been mined.
“The approximately 2,700 burned bitcoins won’t probably have a huge impact on Bitcoin’s future, but if bitcoin is ever the primary currency used by the world, those 2,700 bitcoins would probably have been worth billions of dollars,” Jonathan Saewitz, founder of btcburns.cf, told me.
BTCburns.cf compiles provably burned bitcoins only, “meaning that it must be clear that it would be extremely unrealistic for the address to be generated, either naturally or through brute force.” The website includes the bitcoin address used as the reward in the genesis block because the coins in that wallet cannot be spent. The website provides a list of all the addresses carrying burned coins.
Discussion about the Bitcoin burn rate has taken place in the Bitcoin community for a long time. This BitcoinTalk thread tries to keep track of burned addresses. A lot of these coins won’t ever be recovered. It’s nearly impossible to recover lost coins. If one loses their private key, then – thanks to bitcoin’s security – the bitcoins are likely not recoverable. There are new firms being built around lost bitcoins, to be sure.
Wallet Recovery Services believes some passwords can be retrieved. And, if your hard drive crashes, people have created tutorials to explain how to retrieve them. Some believe the burn rate will decrease over time as people become more familiar with Bitcoin technology. Saewitz says it will stay fairly the same.
“I think it will remain fairly steady, but there’s no way to know for sure. A large majority of the burned bitcoins are due to altcoins that used proof-of-burn as a method of distributing their coins, namely Counterparty’s XCP (2,130 btc) and Chancecoin (480 btc) — approximately 96% of all burned bitcoins are attributed to these two altcoins alone,” Saewitz said.
I believe any increase in the number of burned bitcoins depends on whether or not any future altcoins use proof-of-burn to distribute their coins, which is a very realistic possibility as it’s shown to be a fair method of distribution.
Every now and then, to be sure, there is a success story, and someone recovers their lost bitcoins.
Featured image from Shutterstock.