While Billions Worth of Bitcoin Is Lost Forever, Americans Also Lose $62 Million in Regular Coins Each YearBy Jack Filiba
Cryptocurrencies have a reputation for being difficult to understand and easy to lose. This difficulty has largely contributed to the millions of dollars worth of Bitcoin that remains permanently irretrievable.
In fact, according to a LongHash report from late 2018, 3.79 million Bitcoin has been misplaced or destroyed. That’s an average of about 421k BTC per year, which would be valued somewhere in the ballpark of $2.4 billion USD at the current conversion rate.
It may surprise you to learn, however, that Americans also lose $62 million USD worth of physical coins every year just by throwing them away. This is at least the estimate provided by Covanta Holding Corp, a recycling and waste management company that claims to find an estimated 25 cents in each ton of waste.
In addition, travelers left behind more than $860,000 USD while passing through U.S. airport checkpoints in 2016 — a figure that is up over $100,000 from the previous fiscal year.
You can’t replace lost Bitcoin
By design, Bitcoin has a limited supply. Its anonymous creator(s) wanted to design a virtual currency that took its inspiration from gold. The aim was to create a new digital asset with a sense of value: the amount of BTC in circulation will never exceed 21 million units.
This presents a significant ideological divide between a cryptocurrency like Bitcoin and a fiat currency such as the U.S. dollar. While the United States Mint produced over 12.5 billion coins in 2018, crypto miners chip away at the remaining supply of Bitcoin. When users forget their private keys or otherwise lock themselves out of their crypto wallets, the Bitcoin they held is often gone forever. It will never re-enter Bitcoin’s economy.
While the fact that Bitcoin’s supply is both limited and continually depleted by user error may scare away some would-be participants, Bitcoin’s investors often see it as an attractive reason to get in on the ground floor. For example, take the advice that Litecoin inventor, Charlie Lee, sent out to his followers last year:
“There will be at most 21 million bitcoins in existence,” he tweeted. “There isn't even enough BTC to go around for EVERY millionaire to own one. So before you buy any other coin (LTC included), try to own at least 1 BTC first.”
Physical currencies and virtual assets share one thing in common
Regardless of where you stand on the divide between physical and digital money, one thing’s for certain: producing physical currency is not without its own serious set of flaws. By this point, even the government must agree. After all, the U.S. Mint spent a reported $69 million USD producing the U.S. dollar’s smallest unit, pennies, in 2017 alone.
While it’s easy to understand how novice cryptocurrency investors can lose their assets, the fact that the populous as a whole is losing millions of dollars annually in regular coins may give fiat currencies and crypto something in common — neither are safe from human error.