How Many Bitcoins Lost Until Now Due To Human Error

Vandana  |  Aug 29, 2020

During the time when Bitcoin was created, it was created with the main aim of becoming the type of currency that will help people out during the time of crisis. One of the major reasons for this is the limited amount of mining as it does not function like fiat money. Now another major factor that contributes to Bitcoin scarcity is a human error because of which a lot of Bitcoins are lost forever. It was estimated that due to these human errors, the total Bitcoins lost is about 20% of the total BTC in circulation.

There are a lot of human errors due to which Bitcoins are lost forever like forgotten passwords, mislaid wallets, corrupted devices or hard disks, or any other possible human errors that could lead to this. During the time of Bitcoin creation, it was quite obvious to see such human errors because people were not aware of how to use the coins and keep them safe. In those initial years of Bitcoin, a huge number of BTC disappeared forever from the internet due to human errors. Even though human errors can happen at any point of time and might happen today as well but the majority of such errors occurred in the initial years only.

Reasons for losing Bitcoins

There is a huge difference when it comes to losing Bitcoins due to human errors or due to some hacks and cybercrimes. When someone loses their Bitcoin due to cybercrimes, the coin still remains in the circulation. However, when someone loses Bitcoin due to human error then BTC is lost forever and there are hardly any chances to recover it back. 

According to a report by Wall Street Journal, around 20% of the total Bitcoin which are there in circulation is lost due to human errors and there are not any chances to recover them by any means. Now comes the reason behind this. The major reason behind losing Bitcoins is the structure on which it has been developed. Due to the features like high security and privacy, it is quite impossible to recover any which are lost due to human errors. This is the reason why a lot of analysts suggest that any new entrant in the Bitcoin market needs to keep the backup of their wallets along with keeping sufficient copies. One also needs to save the private key at a secure place so that in case if they forget one, they can easily recover it from there. 

Human errors for losing Bitcoins

One of the major reasons why Bitcoins are lost due to human errors is the high security associated with it. It might sound odd that Bitcoin could be lost due to the high security but it is true. Here are the human errors that result in losing Bitcoins -

  • Losing private keys - Everybody from the crypto community knows that digital wallets are highly protected by cryptography and in order to have access to them, there is a need for a private key. Without a private key, it gets really difficult in fact next to impossible to access any wallet. The major purpose of protecting the wallet via private key was to secure it from the cyber crimes which are generally there in the crypto market. However, it becomes one of the worst things for any crypto wallet holders who lose their access to the wallet due to losing their private key. This is the reason why there are a lot of Bitcoins that are lost forever and no one will be able to gain access to them.
  • Hardware error - Even though this is not purely a human error but falls into the same category only. There are a lot of people out there who have lost their Bitcoin forever due to hardware failure. When it comes to hardware failure, one of the most common is damaged hard drives. If this is to be compared with losing a private key then here are some chances of getting the coins recovered. There are a lot of recovery services that help people to gain their data back when they lose it due to a hardware error. However, the chances are very less and in this case, also, Bitcoin is lost forever.
  • Conclusion

    Over time it is noticed that people are getting quite responsible when it comes to protecting their digital wallet. However, human error is not something that happens due to some technical issues, it can happen to anyone out there. According to the reports, around 20% of the total Bitcoins which are there in the circulation are lost. This is not having any great effect on the total Bitcoin market but when any individual loses their coins due to human errors, it is a great loss for them. Now in order to prevent such human errors, there is a need to adopt all the preventive measures like keeping backups of the wallets and saving the private key at a secure place that could be accessed by you whenever you need one.

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