Where Will the Over $1 Billion Worth of Lost ETH Go?

Ethereum has a supply of over 120 million coins, but approximately 636,000 ETH of that has been permanently lost.

Where Will the Over $1 Billion Worth of Lost ETH Go?

According to Conor Grogan, Director of Product and Business at Coinbase, over $1 billion worth of ETH has been "lost" in wallets due to various reasons, including user errors and vulnerabilities.

To date, Grogan has identified 636,000 ETH as lost, which constitutes 0.5% of the total circulating supply of the cryptocurrency. He shared on his Twitter on March 20:

“I’ve cataloged thousands of cases of incorrect entries, user errors, and smart contract flaws.”

Grogan has tracked several significant losses, including:

– The majority—about 514,000 ETH—was lost due to a bug in the Parity wallet in 2017.

– A vulnerability on the Quadriga exchange led to a loss of 60,000 ETH.

– The Akutars NFT collection lost 11,500 ETH in a failed minting attempt.

– Particularly notable is the erroneous transfer of 24,000 ETH to a burn address, permanently removing the coins from circulation.

In most cases, the ETH was worth much less at the time of loss compared to its current value. In the early years, many did not foresee the future value of the cryptocurrency, leading to negligence regarding lost hardware wallets, forgotten private keys, or donated ETH.

Grogan estimates that the $1.1 billion loss figure is significantly lower than the actual amount of lost ETH and does not account for assets that users cannot access in their wallets. Additionally, Conor shared the case of ETH permanently lost by a Pastebin account, a site for sharing text online.

There is almost no way to recover Ethereum lost in these instances. While there are services in the market specializing in recovering crypto for those who have forgotten their passwords, not all cases are successful.

This article serves as a warning for users to be more cautious when transacting and to protect their assets with reliable security tools.