Investors likely to lose almost $545 million worth Bitcoin in 2022 by forgetting passwords and various other mistakes, suggests report

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Bit­coin investors are like­ly to lose up to $545 mil­lion this year, owing to var­i­ous rea­sons like for­get­ting pass­words to their wal­lets or mak­ing a mis­take in record­ing their “seed phras­es”, accord­ing to a new report.



A seed phrase is a series of words gen­er­at­ed by your cryp­tocur­ren­cy wal­let that give you access to the cryp­to asso­ci­at­ed with that wallet.

Ana­lysts have esti­mat­ed that at least 20 per cent of all Bit­coin is lost and that the major­i­ty of those funds are irre­triev­ably lost. 

Accord­ing to new research from CryptoAssetRecovery.com, between $272 mil­lion to $545 mil­lion of Bit­coin will be lost this year. 

“Cryp­to gets lost for a host of rea­sons: Peo­ple for­get the pass­words to their wal­lets; peo­ple make a mis­take in record­ing their seed phras­es and some die with­out giv­ing ade­quate instruc­tions for how to access their funds,” accord­ing to the report. 

“How­ev­er, this does not include Bit­coin lost to scams or theft.

“While such funds are lost to the orig­i­nal wal­let hold­er, they are not lost to the total mon­ey sup­ply of Bit­coin. Those funds will like­ly con­tin­ue to cir­cu­late,” the report noted. 

Peo­ple also unin­ten­tion­al­ly (or occa­sion­al­ly inten­tion­al­ly) send cryp­to to a burn address, or to an address on a dif­fer­ent net­work, and lose it. 

A new Bit­coin block reward is issued every 10 min­utes, and in 2022, the block reward is 6.25 Bit­coin. The block reward will halve again in 2024, to 3.125 BTC/ block reward. 

“Since there are 525,600 min­utes in a year, and a block reward is issued every 10 min­utes, 52,560 block rewards or 328,500 BTC will be issued in 2022,” the report noted. 

“It’s clear that the vast major­i­ty of the approx­i­mate­ly 3.8 mil­lion lost Bit­coin were lost ear­ly in the blockchain’s his­to­ry, before it had any eco­nom­ic value.

Giv­en that between 2–4 per cent of the 328,500 Bit­coin mined in 2022 is like­ly to get lost, some­where between 6,570–13,140 Bit­coin are like­ly to get lost. 

“When Bit­coin’s price is approx­i­mate­ly $41,500, this means that between $272 mil­lion and $545 mil­lion in Bit­coin alone is like­ly to be removed from the Bit­coin mon­ey sup­ply in 2022,” the report claimed. 

Bit­coin’s price on Wednes­day fell below $40,000 as oth­er major cryp­tocur­ren­cies were trad­ing in the red, accord­ing to Coin­desk data. 

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