When Satoshi Nakamoto created Bitcoin, he purposefully limited it to 21 million coins to maintain scarcity and value. After over a decade on the market, miners have checked over 90% of coins, so there are about 1,000,000 left to be mined. While it may seem like the end is near, mining gets more complex due to halving events, so it’s forecasted that users will mine the last Bitcoin in 2140.
However, not all mined Bitcoins offered investors actual value since experts estimate that about 20% of Bitcoin’s supply disappeared. Indeed, coins that cannot be used contribute to scarcity, which influences the Bitcoin price but also affects investors as they’re prone to scams or hacks.
Most of the time, it’s considered that there are no ways to recover Bitcoins since blockchains are massive networks and anonymous users cannot be tracked. Still, only specialized companies can investigate these issues and find the right way to recover. Here’s everything you should know about it.
Losing Bitcoins seems impossible because of the high-tech measures based on cryptography and decentralization, but it is actually possible in many ways, especially when it comes to negligence. For example, a wallet’s private key, which allows transactions and proves ownership, can be compromised if the owner is careless. This is possible through social engineering or hacking measures.
At the same time, crypto owners might also send Bitcoin to the wrong network or address, which happens more often with BTC-related assets like Ordinals, which have different addresses from regular BTC transactions.
Hackers can compromise wallets if they’re damaged or corrupted, but it’s usually not that easy to access them if users hold onto the private key, with which they can create a new wallet. Unfortunately, these hacks can also happen to centralized exchanges.
Finally, abandonment is a common cause of lost Bitcoins. If users forget their private key, they lose access to the wallet, and the Bitcoins in it cannot be recovered. At the same time, inheriting a wallet after someone’s passing might not be possible.
What’s the big deal if Bitcoins are missing?
If it takes so long for Bitcoin to end, why should we be concerned about losing Bitcoins? There are two reasons this is occurring, and crypto users should not ignore them. First, it affects investors and their confidence in continuing with Bitcoin, especially those who have worked hard to build stable portfolios with long-term strategies. On the other hand, if they’ve been hacked, investors will lose their trust in the blockchain ecosystem, contributing to a slower worldwide adoption.
The second argument is that lost Bitcoins accelerate scarcity, increasing prices faster than expected. Therefore, investors and institutions will have to handle massive prices when they would have benefited from lower rates.
The struggle to recover Bitcoins
Most people know that recovering Bitcoins once lost is quite difficult. People like Rhonda Kampert, James Howells, and Stefan Thomas, who lost all their Bitcoins, know this, as recovering $320 million proved impossible.
However, some companies have worked towards finding solutions for crypto users. For example, data recovery services can manage problems with forgotten passwords or wallet corruption through methods like brute-force reconstruction of seed phrases. Their success depends on their ability to access users’ computers or devices since reconstructing a Bitcoin’s seed phrase is considerably challenging.
Regarding hacks or scams, users might want to contact private investigation firms with the tools necessary to recover massive amounts of money. Moreover, they can collaborate with authorities to find bad actors and impose a certain legality in the crypto world.
Still, users must protect their Bitcoins.
Although recovering companies’ services are available, they might not be accessible to crypto users, and in some cases, they’re unsuccessful. Therefore, the best way to protect coins is to prevent loss or theft through proper safety methods.
First, holders must choose wisely a wallet because not all are safe. Users can use hot wallets online on desktops, mobiles, or websites. This makes them easy to access but exposes them to security risks. On the other hand, cold wallets come in hardware forms or simply paper and are more difficult to hack. Still, holders must store them in a safe space.
There’s also a difference between custodial and non-custodial wallets. Custodial wallets usually come from third-party companies and are easier to set up and ensure account recovery, but they expose users to vulnerabilities and lack of privacy. On the other hand, non-custodial wallets allow users to control and manage their assets fully, are more private, and are less vulnerable to attacks. Unfortunately, users must be tech-savvy to handle them and might be unable to recover Bitcoins if lost.
Additional security measures to adopt
Besides choosing a reliable crypto wallet, holders must also be wary of being more resilient. Usually, following security tips used in regular settings, such as protecting banking information, can help. This means setting multi factor authentication on all devices where crypto transactions are made, securing passwords, and using only trusted sources for exchanges. Moreover, employing seed phrase backup, VPN for enhanced privacy, and having multiple wallets can minimize risk exposure.
Users must also learn how to distinguish fake from genuine exchanges and websites. Hackers are more refined than ever when creating a seemingly trusted crypto source, which is why so many people lose their Bitcoins. The golden rule is never to click on any website link before inspecting it thoroughly.
Do you protect your Bitcoins enough?
Although the end of Bitcoin is far from us, the number of lost Bitcoins from the entire supply is concerning, as it can contribute to increased prices and lost user confidence. Holders lose their coins for many reasons, whether due to forgetfulness or exposure to scams. However, there are few ways to recover Bitcoins, so proper security is essential to prevent this.
