- Although the current circulating supply is 18,303,562 BTC we estimate less than 17,000,000 Bitcoin still exist
- The value of lost Bitcoin exceeds $10B
According to CoinMarketCap, Bitcoin’s current supply is 18,303,662 BTC. This is equivalent to over $122B. However, Bitcoin’s true supply is far lower than that.
Determining the true supply is crucial to realizing Bitcoin’s true value as a limited supply financial asset. Therefore, it is crucial to know, just how many Bitcoins actually exist.
The Real Bitcoin Supply
There are several factors that influence Bitcoin’s true supply. The largest factors are lost addresses, unclaimed coins, and most notably, Satoshi’s personal fortune.
According to CoinMetrics, a cryptocurrency data firm, an estimated approximately 1,500,000 BTC are lost indefinitely. This means a massive chunk of the current supply no longer exists.
Lost Bitcoin Addresses
The largest discrepancy in current supply comes from lost Bitcoin addresses.
How is this possible?
Every Bitcoin wallet has a private key. This private key is effectively the password to a Bitcoin wallet (we explain private key here). Over the years many have lost their private keys. Without a private key, a wallet is inaccessible, including the Bitcoin within it. The locked Bitcoin is no longer usable and thus reduces the total supply significantly.
The amount of locked Bitcoin is hard to quantify, however, CoinMetrics estimates this figure to exceed 1,400,000 BTC, a little less than 10% of the existing supply.
Satoshi’s BTC Address
The lost Bitcoin, includes Satoshi’s fortune. It’s common consensus within the crypto community that the creator of Bitcoin posses a fortune north of 1,000,000 BTC, worth over $7B. Satoshi was able to amass this fortune by being the dominant miner throughout Bitcoin’s early years.
However, BitMex Research has recently called this into question. According to their research, Satoshi only posses around 700,000 BTC, which is still a massive amount of Bitcoin.
What’s more, Satoshi never moved his fortune. It is unclear if this is intentional or more likely, the private keys have gone missing. As a result, the Bitcoin is lost forever.
Every time a miner mines a block they are awarded new Bitcoin for their work, also known as a block reward. Bitcoin’s protocol checks if miners attempt to claim more than the block reward (currently 12.5 BTC), but does not check if they claim less. Therefore, there have been instances where block rewards have gone unclaimed and thus lost on the blockchain.
According to the report, approximately 30 BTC has gone unclaimed. This is equivalent to over $200,000.
Why Does This Matter?
While the exact amount of lost Bitcoin will be forever a mystery, the implications are huge. The answer to just how many Bitcoins exist will have a huge impact on Bitcoin’s price.
Bitcoin’s value proposition has always been its limited supply. Unlike centralized currencies, Bitcoin will always have a finite supply of 21,000,000 Bitcoin. Furthermore, Bitcoin’s price follows simple economics: supply and demand. Thus, a smaller actual supply results in one Bitcoin becoming rarer. Theoretically, this should result in Bitcoin’s true value much higher than it currently is.
According to CoinMetrics and our estimates, around 10% of Bitcoin’s current supply is missing. Factoring in the lost Bitcoin, the popular cryptocurrency’s total market cap is approximately $110B, significantly less than the current $122B.
As it is virtually impossible to determine Bitcoin’s true supply, the question will always remain: just how many Bitcoins actually exist?
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