Want your business to make $ billions? Then join the Bitcoin treasure hunt

February 28, 2018 11:51 am

Bitcoin and cryptocurrency is under attack from top people, like Microsoft Founder Bill Gates, when during a Reddit session on Tuesday he said: “”Right now cryptocurrencies are used for buying drugs so it is a rare technology that has caused deaths in a fairly direct way. I think the speculative wave around ICOs and cryptocurrencies is super risky for those who go long.”

He’s not alone.

JPMorgan Chase CEO Jamie Dimon has called Bitcoin a “fraud,” and EU financial services commissioner Valdis Dombrovskis said Bitcoin and other cryptocurrencies do not have a “guaranteed value” and should come with a “clear and frequent” warning to investors in order to safeguard them from possible risks including loing their investments.

Many are familiar with the inherent risks of crypto trading, as the coins themselves do not hold any value and are as of yet unregulated.

But “missing” Bitoins, literally, was not a risk that investors envisioned about ways to losing millions!

Watch: Is Bitcoin ready for the mainstream?

Where’s my Bitcoin?

In a Fortune exclusive, it seems like the hunt is on for nearly 4 million Bitcoins which are presumably lost forever.

“Just as gold bars are lost at sea or $100 bills can burn, bitcoins can disappear from the Internet forever. When all 21 million bitcoins are mined by the year 2040, the actual amount available to trade or spend will be significantly lower,” Fortune said, quoting a new research from Chainalysis, a digital forensics firm that studies the bitcoin blockchain.

“3.79 million bitcoins are already gone for good based on a high estimate—and 2.78 million based on a low one. Those numbers imply 17% to 23% of existing bitcoins, are lost.”

The Chainalysis findings are significant because they rely on a detailed empirical analysis of the blockchain, where all bitcoin transactions are recorded.

Here’s the data in another format, which shows how “Out of circulation” bitcoins—those mined 2-7 years ago and belonging to long-time investors known as “hodlers”—and those from the early days of bitcoin in 2009 and 2010 account for the vast majority of the lost coins.

Read: Better get used to paying for groceries in Bitcoin in 2018, GCC

“These figures reflect bitcoins that are truly lost, and not hacked or otherwise stolen—in these cases, of course, the bitcoin is not lost since the thief has control of them,” said Fortune.

“In the future, more bitcoins will be lost. But the rate at which they disappear will be much lower than in the past since, now that they’re so valuable, people will be more vigilant about keeping track of them.”

There is the true story of one James Howells in the UK who threw away a hard drive with the key to 7,500 bitcoins which he bought in 2013 when they were worth “almost nothing” but sat unused in a drawer for three years.

The guy started searching his local landfill in an attempt to find it again, after it was now worth some $75 million.

That hurts.

Read: Bank error nets Bitcoin owner $trillions: Inside the weird world of cryptos

 Transactional loss

Chainalysis, whose clients include the US Internal Revenue Service and Europol, has made a name for itself in the bitcoin world because of its abundant data and sophisticated study of blockchain wallets, able to provide detailed insights into who owns the currency and how it moves around.

There are 2% of “‘transactional” bitcoins that Chainalysis determined to be gone, based on scraping the Internet for reports of lost coins which can arise from a misdirected transaction or the loss of a private key through death or carelessness.

“Finally, there’s the question of what became of the bitcoins belonging to Satoshi, the pseudonymous creator of the crypto-currency, who has not been not been heard from since 2011,” said Fortune.

“Chainalysis says wallets associated with Satoshi represent about 1 million bitcoins, which date from a time when it was easy to mine 50 Bitcoins with a laptop, and, if it proves to be incorrect, the number of circulating bitcoins could suddenly increase significantly and deliver a shock to the market.”

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Crypto performance update

Bitcoin’s price continued its steady ascent in the last 24 hours.

Today, it was trading at $10,600 range, up 56% from its low of $6914.24 on Feb. 5.

Bitcoin cash witnessed an uptick of 4.6% in the last 24 hours trading at $1293.

According to Coindesk, trading in the cryptocurrency surged by 38% in the last 24 hours.


Hadi Khatib
By Hadi Khatib
Hadi Khatib is a business editor with more than 15 years' experience delivering news and copy of relevance to a wide range of audiences. If newsworthy and actionable, you will find this editor interested in hearing about your sector developments and writing about it.