Monday, April 22, 2019

Cryptocurrencies Getting Forever Lost with Unforeseen Deaths

The subject of death exists everywhere, and the virtual world of cryptocurrencies is no exception, as unforeseen demise stands to be the biggest threat to the permanent loss of digital currencies.

4 million Bitcoin Forever Lost

Bitcoin since its emergence has continued to lead the pack of all digital currencies and its set maximum supply of 21 million Bitcoins (BTC) is set to reach its limit by 2040. Before the event finally comes, however, a significant amount of Bitcoins would have been lost into the sea. While the rate at which digital currencies are being lost is reducing year by year as the cryptocurrency sector evolves, it is still however expected to lose more as proved by the recent death of crypto exchange QuadrigaCX founder, Gerry Cotten, which sent the key to $190 million worth of digital currencies to the world beyond.

A study revealed by Chainalysis, estimated the number of bitcoins lost to untraceable and irretrievable circumstances is closely approaching the 4 million mark. The causes of some of these have ranged from mysterious to unfortunate, and some to plain carelessness. The young man who carelessly threw away a hard disk containing the key to 7500 bitcoins sometime before does not expect to get sympathy from anyone.

According to the report published by Chainalysis, more than 2.5 million Bitcoins are not in circulation and lost, while more than a million more, dubbed ‘original Satoshi coins’—which are believed to have been mined during the earlier times when mining 50 bitcoins with a laptop was easy—are also believed to be lost. Chainalysis, however, admitted that a sudden circulation of the Satoshi coins would cause a big shock to the cryptocurrency market.

When asked about whether Bitcoin might just be scarce than people’s general assumption, Kim Grauer, Senior Economist at Chainalysis, said the issue is complex than is generally believed, however, the cryptomarket has adapted quite well. He said:

“The [cryptocurrency] market has adapted to the actual demand and supply available – just look at exchange behavior. Furthermore, it is well known monetary policy procedure to lower or increase fiat reserves to impact exchange rates. So the answer is yes and no.”

Managing Death

Critics attributed the recent catastrophe at QuadrigaCX to a case of internal mismanagement, and more crypto influencers are already imploring crypto enthusiasts to consider these cases to ensure their crypto wealth do not follow them into the mysterious.

Unfortunately, only few cryptocurrency exchanges like Coinbase have an efficient program that takes into account next of kin as regards to cryptocurrency repossession.

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