Bitcoin owners keep the private keys needed to spend or move the tokens.
These keys exist as complex data sets and are often stored in secure digital wallets.
These wallets are then usually protected by passwords or authentication measures. While their complexity allows owners to store their cryptocurrencies more securely, the loss of keys or passwords for the wallet can be devastating.
In many cases, Bitcoin owners do not have access to their funds indefinitely.
Approximately 20% of the existing 18.5 million BTC are considered lost or trapped in inaccessible wallets, The New York Times reported on Tuesday, citing data from Chainalysis.
Currently, that amount is about $ 40 billion dollars. This BTC remains in the general offer and still holds value, but in practice does not enter into circulation.
Simply put, these coins will remain unavailable indefinitely, but their unavailability will not change the price of the cryptocurrency.
” There’s a phrase that the cryptocurrency community uses: it’s not your keys, it’s not your coins ,” Jimmy Nguyen, president of the Bitcoin Association, told Insider.
For now, the saying is true. Some exchanges, such as Coinbase, have emergency recovery measures that can help users regain access to forgotten keys or passwords. But exchanges are less secure than offline wallets, with some even being hacked, Nguyen said.
The Bitcoi community is already at a crossroads, where members are divided over whether BTC should maintain its security methods or replace part of its decentralization with easy-to-use safeguards.
Nguyen falls into the last group. The proponent of cryptocurrency argues that mechanisms should be put in place to allow users to recover inaccessible Bitcoins in the event of forgotten passwords, funds transfers and incorrectly addressed payments.
The lack of such systems maintains a barrier between cryptocurrency enthusiasts and that part of the population that has not yet turned to Bitcoin.
” If I keep the keys to your house, it doesn’t mean I own the keys. I may have stolen the keys from your house. Maybe you lent me the keys ,” Nguyen said. ” It does not prove who owns this property or this asset. “
Maintaining the current Bitcoin storage method also reduces its value, both as a new method of payment and as collateral, he added. “
There is a discrepancy, if not outright hypocrisy – among Bitcoin supporters, as they argue that you need to own private keys to be your coin. If they want the value of the coin to grow because it is growing in use, then you need to take a much more open and easy-to-use approach to Bitcoin. “