- Bitcoin The decentralized nature has always been one of its biggest selling points, but imperfect storage methods have made millions of tokens inaccessible.
- About 20% of the 18.5 million Bitcoins in existence – worth about $ 140 billion – are estimated to be lost or stuck in locked digital wallets. New York times I mentioned on Tuesday.
- Currently, these coins are effectively held behind incredibly complex encryption and forgotten passwords.
- The solutions still come from the cryptocurrency fix, Jimmy Nguyen, president of the Bitcoin Association, told Business Insider.
- Nguyen said that emergency mechanisms that can recover bitcoin in the event that wallet passwords or property transfers are forgotten could make it more “open and easy to use.”
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Cryptocurrency enthusiasts praise Bitcoin Decentralized nature. However, the imperfect methods used to secure digital tokens are pulling millions of bitcoins out of circulation with little hope of recovery.
Bitcoin owners have private keys that are necessary to spend or transfer tokens. These keys exist as complex strings of data and are often stored in secure digital wallets.
Then these wallets are usually protected with passwords or authentication procedures. While its intricacies allow owners to store their Bitcoins more securely, losing keys or wallet passwords can be devastating. In many cases, Bitcoin owners are banned from their property indefinitely.
Roughly 20% of the existing 18.5 million Bitcoins are estimated to be lost or trapped in inaccessible wallets. New York times It was reported on Tuesday, citing data from Chainalysis. This amount is currently valued at around $ 140 billion. This bitcoin remains in the global supply and still retains its value, but is virtually banned from being traded.
Simply put, these currencies will remain trapped indefinitely, but having no access to them will not change the price of the cryptocurrency.
Read more: The chief information officer for a $ 500 million crypto asset manager breaks down 5 ways to evaluate bitcoin and decide whether to own it after the $ 40K digital asset breaks out for the first time.
There is this 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 old saying is true. Some exchanges like Coinbase have some emergency recovery procedures that can help users regain access to forgotten keys or passwords. But Nguyen said exchanges are less secure than wallets, and some have been hacked.
The Bitcoin community is now at a crossroads, with members divided over whether Bitcoin should maintain its strict security methods or trade some decentralization for easy-to-use collateral.
Nguyen lands in the last set. The cryptocurrency advocate has argued that mechanisms should be created to allow users to recover inaccessible bitcoins in cases of forgotten passwords, real estate transfers, and improperly processed payments. The absence of such systems maintains a barrier between cryptocurrency enthusiasts and residents who are yet to be enthusiastic about Bitcoin.
Nguyen said, “If I have the keys to your house, it doesn’t mean that I own the keys. Maybe your house keys were stolen. Maybe you loaned me the keys.” “This does not prove who owns this property or those assets.”
He added that maintaining the current method of storing Bitcoin also reduces its value, either as a new payment method or as collateral.
Nguyen said: “There is a contradiction, if not outright hypocrisy – among the Bitcoin supporters, because they want to reinforce this narrative that you must have the private keys for the coins to be yours.” “If they want to increase the value of the currency due to its increasing use, then you have to take a more open and easy approach to Bitcoin.”
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