Recent news events serve as a very good reminder of why that is...
Recent events out of Canada remind us why the supply of bitcoin is actually a lot less than what we see on paper.
If you are not familiar, there was an exchange in Canada, one of the largest in the country in fact, that lost a large portion of their holdings.
Specifically, they lost about $190 million worth of crypto.
What the heck happened?
Well, holding your coins in cold storage is a great idea, in theory.
It makes it much more difficult for hackers or bad actors to make off with your inventory and makes investors and users of your platform feel that much more secure.
The only problem is that you have to be able to access your cold storage.
In this case, the Canadian exchange had roughly $190 million worth of crypto in cold storage that was set up and only accessible by its founder.
That is great, except if your founder dies.
Which is exactly what happened.
The rest of the employees at the exchange have been scrambling for ways to figure out how to access the funds but so far their attempts have been futile.
More about it can be seen here:
https://www.ccn.com/190m-gone-how-canada-biggest-bitcoin-exchange-lost-it
There will never be 21 million bitcoins.
According to the news article above, the exchange has lost access to roughly 26,500 bitcoins.
Those bitcoins may forever be removed from the global supply, if they are never able to be accessed and recovered.
Combine that information with the report that came out late last year that said roughly 4 million bitcoins have been permanently lost and another 2 million have been stolen.
Making for roughly 6 million coins that are likely never to be recovered.
That means that when the mining eventually turns off and 21 million coins will have been created, there will be at least 6 million plus coins that are out of circulation.
(Source: https://www.ccn.com/190m-gone-how-canada-biggest-bitcoin-exchange-lost-it)
Which means, the supply of bitcoin is actually about 29% LESS than the numbers we see out there.
That means, technically, the actual market cap of bitcoin is a lot closer to $43 billion than it is to the $60 billion you see out there.
Keep in mind there is always the chance that some of those coins may be recovered some day, but there is also the chance that new coins will also be lost going forward.
Which, the latest developments from the Canadian exchange are a perfect reminder of.
Either way, the final actual supply of bitcoins out there in circulation is likely to be a lot less than that 21 million.
Stay informed my friends.
Image Source:
https://bitcoinist.com/almost-four-million-bitcoins-may-have-been-lost-forever/
