A colleague of mine was lamenting the fact that he had bought 10 Bitcoin, way back in the day when they had very little value. He had lost the 40 character long password and had no paper copy. Though it’s money he never had he would have been sitting on a very handsome four hundred and forty thousand pounds, there or thereabouts. But there is no use crying over lost Bitcoin.
It got me thinking though that this must be an increasing problem. People lose passwords all the time, they get forgetful, can’t remember where they put them or lose their backup copy. People die taking the information with them or, in some cases, refuse to reveal the passwords to prosecuting authorities.
The thing with Bitcoin is that there is only going to be a limited number of them. The maximum amount that can be mined is around 21 million and there are just under 19 million in circulation, if that is the right word. At the current rate just over 6 are mined every ten minutes yet it may take until the end of the century for the seams to be spent.
According to Cane Island Digital Research, 4% of available bitcoin is lost each year and, because of this, it estimates that a maximum of only 14 million bitcoin will ever be available. At this rate they are being lost at twice the rate of their creation.
This presents an interesting conundrum. Whilst losing access to Bitcoin hurts the individual it actually increases their value as rarity does. Eventually though there could come a point where there are insufficient to make their use viable. With the smallest unit set at a hundred millionth of a Bitcoin, a Satoshi (worth currently 0.061 cents) this may be a long way away.
What will happen though, as computer power continues to increase, is that there will become a market in breaking Bitcoin passwords. With 7 million ‘lost’ behind passwords ($427 trillion?) then this will be worth having a go at. Of course once you can crack the lost Bitcoin passwords, then all passwords are open. By then we’ll probably have 60 characters to hide behind.
It’s certainly an interesting conundrum.