ethereumworldnews.com
Quick take:
- Crypto analyst Timothy Peterson, explains that the supply of Bitcoin is shrinking on a daily basis
- He estimates that a total of 1,500 BTC is lost per day compared to about 900 BTC mined
- The maximum number of Bitcoin that will ever be in circulation is around 14 million
- Individuals lose their BTC through lost hardware, private keys, death and sending to wrong addresses
The question as to how many Bitcoin may be lost forever has been answered by Timothy Peterson of Cane Island Alternative Advisors. Mr. Peterson shared his analysis via twitter by explaining that after halving, about 900 BTC are created on a daily basis. In the same time period, approximately 1,500 BTC are lost forever. Therefore, the supply of Bitcoin is actually contracting and not growing.
Below is his tweet explaining the shrinking supply of Bitcoin.
Every day about 900 new #bitcoin worth $9,000,000 are created. Every day about 1,500 bitcoin worth $15,000,000 are lost forever. Supply is shrinking, not growing. See “There Will Never Be More Than 14 Million Bitcoins” https://t.co/aaCqAGEbFd
— Timothy Peterson (@nsquaredcrypto) September 14, 2020
There Will Never Be More than 14 Million Bitcoin in Circulation
In the tweet, Mr. Peterson also shared a link to his research notes which includes one paper titled ‘There Will Never Be More Than 14 Million Bitcoins’.
As the title suggests, the research paper answers the question of how many Bitcoins have been lost by providing actual numbers and reasons why individuals lose their Bitcoin. According to Mr. Peterson, Bitcoins are lost in the following ways.
- Accidental lose (throwing away) of hardware
- Misplacement or total loss of private keys e.g Elon Musk
- Death of the owner of Bitcoins without a proper process of passing on the BTC to the next of kin e.g Mathew Mellon who held over $500 Million in XRP
- Sending to the wrong address, and the address is not accessible e.g users sending BTC to a dormant address with lots of Bitcoin in hopes of being rewarded. By ‘donating’ small amounts of BTC to a dormant whale address, some hope the owner will one day reward them with a handsome payout. Mr. Peterson compares the practice to a wishing well
Conclusion
Summing it up, the initial idea that there will only be 21 Million Bitcoin mined is enough to declare that BTC is very scarce.
Timothy Peterson has revised this idea of scarcity by pointing out only 14 Million Bitcoins will ever be in circulation due to the loss of millions of BTC over the years.
With this new information, investors and traders can now revise their idea of Bitcoin scarcity with a particular emphasis on the 7 Million BTC that will never be in circulation.