You may have heard that since the emergence of the Bitcoin and cryptocurrency industry, some investors have lost their BTC. The most tragic example of this is James Howells, who lost $ 279 million worth of BTC. Howells, a computer software developer, accidentally sent the 7,500 BTC it mined in 2009 to the trash. So how does Bitcoin disappear and can it be brought back?
Although Bitcoin is not a tangible currency, its presence in the digital environment can be lost from time to time. One of the biggest factors that cause this is forgotten or lost passwords. However, it should be remembered that the Bitcoin supply is limited. The circulating supply of bitcoin, which has a supply of 21 million, is over 18.5 million. The remaining 2.5 million supply will be completely removed by 2141.
Analysis firm Glassnode shared data that 2 million bitcoins may have disappeared in December 2020. The meaning of this loss for bitcoin, which has a supply of 21 million, is as follows: With every bitcoin lost, the supply will decrease and the number of bitcoins to be bought and sold will decrease as the supply decreases.
Although Glassnode’s analysis does not have a 100% accuracy, the total amount of bitcoins lost is only a matter of curiosity and prediction for now.
How does Bitcoin disappear?
Losing Bitcoin is actually quite easy. Forgetting the wallet password or removing the computer, phone, etc. Even forgetting the device’s password could mean sending all BTCs to nothing. So, in which cases will your bitcoins be lost?
- If you forget your private key or password: If you forget the private key or password that allows you to access your Bitcoin wallet, you are facing a serious problem. If you have not saved your password or private key somewhere, there is not much left to do.
- If you lose or break the device where you store your Bitcoin: We can use the James Howells example here. Howells trashed the hard drive containing their bitcoins and was never able to access that drive again. If you lose the hardware wallet (such as Ledger), your computer or mobile device where you keep your bitcoin, or if you break it in such a way that it cannot be repaired, you may fall into the situation of Howells.
- If the password you wrote on paper is unreadable or if you lose it: Users can choose to protect their bitcoins by choosing wallets with password information on paper called paper wallets. In addition, there are also those who prefer to keep their bitcoin passwords on a piece of paper rather than on devices with internet access. However, these papers can sometimes get lost or the articles become unreadable when something is spilled on them.
- If you send bitcoins to the wrong wallet address: If you accidentally send bitcoins to a wallet address that does not exist, all you can do is wait for someone to actually use the address you sent by mistake one day. Otherwise, it means bitcoins are mixed into eternity.
I lost my Bitcoin, now what?
If you are faced with such a sad situation, you can try to get your bitcoin back in various ways. For example, if you do not remember your password, you can try using various programs to crack your password. What you need to pay attention to in this regard is to make sure that the password cracker is from a reliable company. Otherwise, you may have unwittingly handed over your password to others.
If you lose the device that contains your Bitcoin, the only thing you can do is to do a thorough search considering where the device might be. If the device has a tracking system, you can try to see where your device is from the tracking system. If your device is destroyed, burned, or has become inoperable in any way, you can try to restore the data in it by contacting a qualified repairman. However, this is quite a challenge, and often devices suffer so badly that it becomes impossible to retrieve even one piece of data.
If you just forget the password you have memorized, it is up to you. An object, song, etc. to remind you of your password. If there is no factor, unfortunately, it is time to forget your bitcoins.
What should be done in order not to lose Bitcoin?
While it is so easy to lose Bitcoins, it is necessary to be very careful and meticulous in order not to lose them. First, you can start by storing your private key and password in a cold / hot wallet you trust or somewhere else you trust. If you do not want to save your password on the hardware, you can save it on any object, paper, etc. by typing you can store it in a safe place. Apart from that, you can choose wallets that allow transactions with the approval of more than one person called multisig wallet.
If you do not want to save your password somewhere but are afraid to forget it, you can share it with a relative you trust. But it’s important to remember that this is also a risk.
Backing up the Bitcoin wallet is also an option. Regularly send wallet.dat files in your wallet to USB, hard disk, etc. you can back up on one device. Don’t forget to use a strong password on the device you backed up from.
Finally, if you are going to send bitcoins to a wallet, at least double check your address. For example, Dawid mistakenly sent a Chainlink (LINK) to the Aavegotchi smart contract instead of his Binance address and was unable to get his money back. Because he hadn’t checked the address he sent.