Nearly a Quarter of All Bitcoins Are Locked Away With Little Hope of Recovery

By Tom Pritchard on at

We've all heard stories online about people who bought Bitcoin for a few quid back in the days before anyone actually cared, only to have forgotten or lost the recovery keys somehow - losing themselves potentially millions of pounds. Have you wondered just how much Bitcoin is locked away, almost never to be seen again? Roughly 23 per cent, which is no small number.

That's according to Chainanalysis, a company which tracks the movement of Bitcoin in and out of digital wallets. It estimates that 23 per cent of all Bitcoin is locked in that weird state of purgatory, where they exist but have little hope of ever being recovered. That's about three million coins, worth around $52 million (£38.78 million).

While there are always the libertarian hopefuls who dream of a world where currency is free and unregulated by any single government or financial institution, this kind puts a damper on the whole thing. If you forget your details for online banking, the bank will usually reset them for you. You may have to wait a few days for new logins to arrive in the post (I did when they made me reset everything for no good reason).

Bitcoin, and other cryptocurrencies, don't exactly have that option. If you forget or lose your key you are basically screwed. Not unless someone finds a way to crack the SHA-256 encryption and get through, though that's that'd probably have to rely on some sort of newly discovered weakness. Brute force is going to take an absurdly long time. More time than any person has.

Not that people aren't trying to get their hands on lost currency. A few weeks ago we heard about James Howells, a Welsh IT worker waiting on permission from Newport Council to go digging up the local landfill. There's also Philip Neumeier, who is building his own supercomputer to try and break into his digital wallet that contains 15 Bitcoins (currently worth around £225,000). He claims it'll take 300 years to crack the 50-character code, but that's not stopping him.

As the price of Bitcoin continues to rise, there's going to be no shortage of people who want to try and recover their lost wallets. Even though it'd probably be easier to join a North Korean hacking group and try to get rich that way. [The Next Web]

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