Understanding dormant wallets for beginners

[Felicity_Tide]

Dormant wallets, also known as hibernated wallets, are considered to be wallets that have been inactive for a long period of time (usually at least six months). Wallets, especially those that hold Bitcoin, are often regarded as lost Bitcoin wallets due to their prolonged inactivity.

When it comes to lost Bitcoin, some of these wallets might never be accessed again due to various reasons, most of which are likely human caused or circumstance.

https://bitcointalk.org/index.php?topic=5496126.msg64063271#msg64063271
Possible Causes of Lost Bitcoin

• Death of the holder
• Transferring to the wrong network or address (though some wallet software can detect this and notify the sender before the button is hit)
• Inability to remember memorized or find written seed phrases
• Wallet compromise such as phishing hacks, etc.

Preventive Measures

• The use of private hardware wallets (cold wallets) is strongly encouraged.
• Seed phrases should never be memorized, nor written on a mobile device or computer. They can be written on paper or in a book that shouldn't be visible to external members and should be strongly protected.
• Having a backup of your documented seed phrase is crucial in case of unplanned circumstances like a fire outbreak.

Note that the quoted text was a reference from my post that can as well be a guide to beginners.

[Coyster]

Because coins haven't moved out from an address for six months or longer does not mean the coins are lost. It is impossible to know if the coins in a particular address is lost, expect the owner tells you so and signs a bitcoin message from the address.

[jrrsparkles]

Dormant wallets, also known as hibernated wallets, are considered to be wallets that have been inactive for a long period of time (usually at least six months). Wallets, especially those that hold Bitcoin, are often regarded as lost Bitcoin wallets due to their prolonged inactivity.

Usually the dormant term used for custodial wallets such as exchange and casino accounts, so if the platform consider the user is being inactive they can decide what they wanted to do with that funds which depends on their terms.

But 6 months is too short to consider the funds in the wallet to be considered as lost, any wallet that's holding millions worth of Bitcoin didn't move any coins in the years may consider but not entirely.

[Ambatman]

Dormant wallet doesnt mean a coin is lost. We have had situations where address dormant for years start moving their coins.
Dormancy is inactivity like you said while lost coins are coins that can not be recovered or accessed and it's quite impossible to really know how many lost coins there's.
Because some that might be dormant for years might move one day.

Wallet compromise such as phishing hacks,

This is not a lost Bitcoin because the scammer have access to the coin.
Lost Bitcoin doesn't mean a person lost their Bitcoins, No it means that nobody can no longer access the coins.
All the reason you gave for Lost Bitcoin are wrong except the third one.
Death of holder doesn't necessarily mean lost when there exist a living person that have the keys or access to the coins.
Transferring to wrong address doesn't still necessarily mean lost because said address could be own by an active user.(Been there before)

[decodx]

Dormant wallets, also known as hibernated wallets, are considered to be wallets that have been inactive for a long period of time (usually at least six months). Wallets, especially those that hold Bitcoin, are often regarded as lost Bitcoin wallets due to their prolonged inactivity.

When it comes to lost Bitcoin, some of these wallets might never be accessed again due to various reasons, most of which are likely human caused or circumstance.

Lost password? Hard drives crashing? Sure, some inactive wallets likely has Bitcoin that's been permanently lost.  But, assuming all "dormant" wallets represent lost coins seems premature.  Simply because a wallet hasn't been accessed for half a year doesn't imply those bitcoins are lost.  Some people may be holding for the long haul.

I haven't really checked, but it's possible that I also have some coins that I haven't touched in six months. And I'm not even a particularly strong hodler.

[Bulltard]

i fail to understand what there is to understand here`.

 stop making useless threads please

[Saint-loup]

Because coins haven't moved out from an address for six months or longer does not mean the coins are lost. It is impossible to know if the coins in a particular address is lost, expect the owner tells you so and signs a bitcoin message from the address.

No, I disagree with you, if someone is able to sign a message from an adress it means he's still owning the private key and he's still controling the address and the funds belonging to it. So if someone does that, you shouldn't believe them and you should consider those coins and this address as not lost instead. To be honest I don't think there is a way to know if some coins are really lost, because the owner could retrieve his private key one day even if he is not hoping it anymore.

[johnsaributua]

Even if the wallet is not in use for a long time, what wallet are you using? for example bitcoincore, electrum etc. are wallets under our own control (recommendation), so far when you save a copy of the phrase at any time it can still be opened. Or do you usually send a token to burn? Although I don't know if the type of wallet and its function is the same as the non-custodial used. I agree with your quote that cause and effect can be identified because fate can happen at any time. I have a wallet that is probably more than 2 years old and it can still be opened even though I store my bitcoin/altcoin in cex for trading. There are indeed functional similarities, namely in terms of storing but if someone gets the dark incident (losing bitcoin/altcoin) caused by physing because the internet travel history is too dangerous and successfully hacked? Hopefully you don't experience it.

[Stalker22]

Because coins haven't moved out from an address for six months or longer does not mean the coins are lost. It is impossible to know if the coins in a particular address is lost, expect the owner tells you so and signs a bitcoin message from the address.

No, I disagree with you, if someone is able to sign a message from an adress it means he's still owning the private key and he's still controling the address and the funds belonging to it. So if someone does that, you shouldn't believe them and you should consider those coins and this address as not lost instead. To be honest I don't think there is a way to know if some coins are really lost, because the owner could retrieve his private key one day even if he is not hoping it anymore.

Haha, you are not wrong! Coyster's take on lost Bitcoin is a bit of a head-scratcher.   Signing a message from an address proves it is not lost, not the other way around. 

[promise444c5]

~

You are viewing this interm of fiat system of Banks which is totally different to that of a crypto.
Fine! A wallet could be in a state of dormancy for years that does not mean it's  actually lost  so far the user still possess  the keys and access to that very wallet and what do I mean by dormancy,  a wallet could be said to be dormant if no transaction was made for a long period of time and here comes the interesting  part why I don't support  the word "Dorman" , a wallet user could be active on a wallet for years without  making any transactions ...

[OcTradism]

Dormant wallets are not dead wallets or lost wallets even most of them are lost wallets. The fact is we never know how many dormant wallets, addresses, and bitcoins stored in those dormant addresses, wallets already lost forever.

We only can guess that people who own those dormant wallets, either already died or lost their computers, laptops, disks, backups, and have other ways to recover their wallets. However there are people who will succeed to recover their dormant wallets or they have been always had access to those wallets recent years, just don't wake up and make any transactions.

https://www.lookintobitcoin.com/charts/hodl-waves/

[Pmalek]

No, I disagree with you, if someone is able to sign a message from an adress it means he's still owning the private key and he's still controling the address and the funds belonging to it. So if someone does that, you shouldn't believe them and you should consider those coins and this address as not lost instead.

Perhaps he was trying to say that a person could sign a message using Address B in which they say that their coins in Address A are lost. But even that is wrong, as it now becomes a thing of trust. Anyone can make such claims, and you still can't prove it's real. You can either trust that the signed message is true or not.

Usually the dormant term used for custodial wallets such as exchange and casino accounts, so if the platform consider the user is being inactive they can decide what they wanted to do with that funds which depends on their terms.

That's different from what OP is describing. I understand what you are saying, though.

Bitcoin doesn't have a definition of dormant accounts or addresses. It's a subjective thing. Online casinos and online payment services in general, invented the notion of "dormant accounts" to make you pay for not using their services more regularly. As a "punishment", they will charge you a monthly fee unless you become active again. And they will keep charging your account until the balance goes to 0 if you don't do something about it.

[Mia Chloe]

Because coins haven't moved out from an address for six months or longer does not mean the coins are lost. It is impossible to know if the coins in a particular address is lost, expect the owner tells you so and signs a bitcoin message from the address.

I agree with you from the part of saying that you can't conclude that a coin is lost just because the wallet is dormant since there are a lot of hodling wallets out there which hasn't broadcasted a single transaction once for a very long period of time. However as for the other part you spoke concerning signing a message,Firstly you require a wallets private keys to be able to sign a message. Now lost Bitcoins are regarded as lost because there are currently no access to the wallets keys and seed because they are lost and since you can't find the keys the coins are lost also based on the fact that you can't sign a transaction with them, and also you definitely can't sign a message with them too.
Therefore I suggest you can't tell a hundred percent that coins in a particular wallet is lost since you never can tell if the keys are really lost or if someone out there has the keys.

[tranthidung]

Dormant wallets, also known as hibernated wallets, are considered to be wallets that have been inactive for a long period of time (usually at least six months).

I really don't think any definition to use for dormant wallets with inactive period is ONLY 6 MONTHS.

Could you share where you get this definition on dormant wallets, please.

The period to use should be years, not only a half of year.

• What is the Largest Lost Bitcoin Wallet?
• What Are Dormant Bitcoin Addresses?

What is considered a dormant bitcoin address?

A dormant Bitcoin address refers to addresses with no outgoing transactions for a certain period with a non-zero balance. Depending on the time frame you prefer, an inactive address could be considered dormant if no funds have moved in or out of that address for one year or more.

For instance, there are many wallets in the Bitcoin realm that hold substantial wealth and have not had transactions leaving them for years. These wallets might be lost and inaccessible, but it can be challenging to definitively say this as they might not be lost at all; instead, someone could be holding onto them.

Additionally, these wallets might lie dormant for other reasons.

[un_rank]

The period to use should be years, not only a half of year.

I do not think any period should be used. There have been addresses that made no outgoing transaction for more than 12 years and one day sent to another address, if this is possible, then there are addresses that have held for longer and are yet to move their coins. Addresses can also be lost and later the seedphrase will be found.

I will vote for addresses to only be considered dormant or inactive, but not lost.

- Jay -

[Cricktor]

This topic has likely been discussed some times in the past and I couldn't care less to think about other people's funded old addresses or wallets. Exactly why should beginners understand "dormant" wallets specifically?

Older than six months only, seriously? I have dozens of UTXOs older than six months and I'd consider my wallet far from dormant.

I fail to understand why we or beginners addressed here specifically should pay attention to non-moving coins at all. Bitcoin is an asset of already finite scarcity, there won't be more than 20,999,999.9769BTC in total, provably less than that can circulate (there are provably non-spendable coins); about 19,697,121.118 have been issued as of now, definitely less than that is in circulation for sure.

Does it really matter if 18.5million or only 15million BTC could potentially circulate around? Well, it doesn't matter for me. If it does for you, I'd be interested why.

There's no way to know for sure which old UTXOs are dormant but still accessible or on the contrary inaccessible because the private keys are truely lost.

[Porfirii]

In fact, isn't long term hodling basically keeping dormant wallets under your control? Dormant means almost nothing in terms of availability of the funds. Even Satoshi's famous address is monitored every day just in case funds moved.

But I said "almost" nothing. The longer the time with no activity, the higher the probability to be lost forever. The problem is that apart from those coins which were "burned" you can't know for sure which ones are lost or not.

[Peanutswar]

I guess the number given is too short, could be the owner doesn't want to transact within those months and just holding, i guess on my part I will consider that address as dormant if the wallet doesn't have any activity within 2 years or more at least, there's a lot of factors why the owner doesn't have any transaction, like the natural occurrence, people have their wallet on their hard drives, lose the access in their seed phrase, lose their wallet physically or both, or totally destroyed due to other circumstances.

[tranthidung]

I do not think any period should be used.

I emphasized that if a period is used, it should be longer than 6 months.

There have been addresses that made no outgoing transaction for more than 12 years and one day sent to another address

You missed a point.

Dormant wallets, addresses are dormant till a day they are reactive. This explains we can calculate dormant addresses with a chosen period of inactive, no transactions but we can not count lost wallets. We only can estimate number of potential lost wallets and estimation has big inaccuracy and uncertainty.

Even the chosen period is 5 years ⁺ or 10years ⁺, as we see, there are dormant addresses woke up after 5-years⁺ or 10-years⁺ of inactivity.

[Yamane_Keto]

In addition to what was mentioned, we cannot describe wallets as a hibernated wallet or a dormant wallet. wallet is a software that controls and manages the private key. This description applies to addresses, and an address that has been dormant for more than 8 years is the only one that deserves to be described as dormant, as we do not use Bitcoin daily.