A South African made the costly mistake of misplacing 20 bitcoin he mined 10 years ago.
Mark Michaels, a 24-year-old electronic engineer from Pretoria, mined 20 bitcoins more than 10 years ago when the cryptocurrency was still only worth a few cents.
Michaels was interested in computers from a young age and late in primary school, he built his own PC which boasted an AMD Phenom X3 processor and 512 MB RAM.
While in Grade 7, he started using this rig to mine bitcoin after reading about the technology on the Internet.
Speaking to a local publication, the software engineer describes using an original bitcoin wallet software, which required a wallet key and password to access. He says he mined the bitcoins for a few months using the operation he set up.
With bitcoin valued at $0.08 at the time, that would amount to about 58 South African ZAR cents.
Unfortunately, he lost the password and key to his wallet.
“Eventually, I got bored of it (mining), as you couldn’t do much else on your PC while it was busy, and the bitcoins you mined were practically worthless.”
– Mark Michaels
The amount of bitcoin would now be worth over $980, 000 today.
But Michaels is not alone. Chainalysis has determined that approximately 20% of the world’s existing 18.5 million Bitcoin was lost or is in stranded wallets.
This represents about 2.78 and 3.79 million bitcoin, and includes wallets believed to belong to Satoshi Nakamoto, the mysterious founder of Bitcoin who hasn’t touched his estimated 1 million coins since 2011.
To deal in bitcoin, you need at least two different keys:
- A public key that is broadcasted out to the network
- A private key which is kept secret
The private key is 64 characters long, and therefore almost impossible to remember or guess if not saved somewhere. However, if someone did move the coins, the transaction would be public, and it would be possible to monitor the movement of lost funds.
For lost private keys however, its nearly impossible to break into a wallet without them. Breaking that protection via brute force would take an unimaginable amount of time.
To put it in perspective, there are 3x more possible combinations than there are atoms in the observable universe, according to Stefan Antonowicz, a software engineer who has attempted to retrieve lost bitcoin.
It is also hard to tell apart lost bitcoins and those which are just being saved for a rainy day.
Since Bitcoin isn’t controlled by any single authority, there’s no one who can simply close any account, however long it has remained inactive.
And so the fate of lost bitcoin is to just sit there, until a more powerful computer can help to break open wallets with lost private keys.
RECOMMENDED READING: 1% of All Bitcoin is Now on Ethereum
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