Lost Ethereum: Understanding Its Impact on the Crypto Market
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The Silent Loss of Ethereum in the Crypto World
While the loss of Bitcoin has been widely discussed, the substantial amount of lost Ethereum has not garnered as much attention. This discrepancy may stem from Bitcoin’s limited supply, which contrasts with Ethereum’s considerably larger circulation. Despite this difference, Ethereum has also seen a significant number of coins become inaccessible, as highlighted by recent research.
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Over 5% of Ethereum’s Total Supply Is Irretrievably Lost
In a detailed analysis, crypto researcher Conor Grogan has shed light on the considerable quantity of Ethereum that has disappeared over the years. Since Ethereum’s inception, numerous incidents and user mistakes have resulted in large sums of Ethereum being permanently inaccessible.
Instances of User Errors and Lost Ethereum
Grogan’s findings reveal that at least 913,111 ETH, valued at more than $3.43 billion, equating to over 0.76% of the total Ethereum supply, has been lost due to user errors. Notable incidents include:
- The Web3 Foundation’s Parity Multisig bug, which led to 306,000 ETH being locked indefinitely.
- A problematic contract that trapped 60,000 ETH from Quadriga.
- The Akutars’ NFT mint failure, which resulted in 11,500 ETH being trapped.
- More than 25,000 ETH sent by users to a burn address.
- The case of the Rain Lõhmus wallet, which holds 250,000 ETH. Lõhmus, a prominent entrepreneur, reportedly lost access to this wallet after purchasing Ethereum early on, amounting to nearly $1 billion today.
Burned Ethereum and Its Implications
Beyond user errors, Grogan’s research indicates that the total amount of Ethereum removed from circulation has significantly increased. After the introduction of EIP-1554 in 2021, over 5.3 million ETH have been burned, representing more than 5% of Ethereum’s total supply. This figure translates to an approximate value of $23.5 billion.
However, these numbers do not account for Ethereum lost through forgotten private keys or Genesis wallets, suggesting that the actual amount of lost ETH could be even higher.
Comparing Ethereum’s Lost Supply to Bitcoin
In comparison, it’s estimated that approximately 20% of Bitcoin’s supply is permanently lost. Given Bitcoin’s capped supply of 21 million coins, any loss significantly impacts the available supply for investors. This makes the loss of Bitcoin more consequential than that of Ethereum, which does not have a supply cap and continues to increase.
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