The ledger shows every coin that exists. It cannot show which ones can still be spent. Coins whose keys are gone sit at their addresses forever.
How coins get lost
- Keys thrown away or overwritten, especially in the early years when bitcoin was worthless. The famous hard drive in a Welsh landfill holds about 8,000 BTC.
- Transactions sent to mistyped or unspendable addresses.
- Deaths without an inheritance plan.
- Exchange collapses where coins vanished with the operator.
How many
Estimates range from about 1.5 million to nearly 4 million BTC, depending on how long a coin must be dormant before it is called lost. Satoshi's roughly one million coins, untouched since 2010, are usually counted separately: not lost, but not expected to move.
What it means
- The effective supply is perhaps 17 to 19 million, not 21 million.
- Lost coins are a gift to every other holder: the same demand across fewer spendable coins.
- Loss is not harmful to the network because bitcoin is divisible; it is harmful only to the person who lost them.
- Every lost coin is an argument for the Self-custody essentials course.
Quantum footnote
Coins at addresses with exposed public keys, including Satoshi's pay-to-public-key coins, are the ones a future quantum computer could threaten first. Whether such coins should be frozen by soft fork before that day is an active debate; see the FUD course's quantum lesson.
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