The uncertainty behind lost coins and probability out-comes

[Rain1620]

We always talk about bitcoin’s scarcity and aswell the 21 million hard cap and the idea is to increase scarcity. Record has it that the estimate of bitcoin that has been lost so far is 3 to 4 million i.e we can never have the 21 million because the lost ones are not available in supply but counted as already mined. A Bitcoin is speculated lost by longterm inactivity of longterm holders.

While this lost bitcoin was a tragedy to the holders, other holders found it favorable, as it tends to increase the scarcity, (according to what I’ve read here in this forum and I quote “Lost coins only make everyone else's coins worth slightly more.  Think of it as a donation to everyone”)

Now my question here is; Have you ever wondered that some of this losses could just be an illusion and can someday show up in the blockchain? It being moved from those dormant addresses deposited in an exchange or another address?
Though circulating supply of bitcoin varies, the amount you see now may fluctuate in the next ten minutes but then, if 1 million coins from already considered lost hits the blockchain, will it trigger a short-term panic that will result in market dips and uncertainties in the mind of holders?

These coins may not be gone forever as speculation has it, I read about the ledger signers and time lock, which talks about how coins can be inherited, holding forever is next to dormancy, so they may just be sitting in a ghost town. and technically, there is no guarantee they are gone forever.

Now, How can we create the difference between a long term holder and a lost wallet?
If the recovery result in a drastic dip, what is the tendency of bitcoin bouncing back to the original price.

[Zaguru12]

We always talk about bitcoin’s scarcity and aswell the 21 million hard cap and the idea is to increase scarcity. Record has it that the estimate of bitcoin that has been lost so far is 3 to 4 million i.e we can never have the 21 million because the lost ones are not available in supply but counted as already mined. A Bitcoin is speculated lost by longterm inactivity of longterm holders.

The actual fact is that this number of estimated lost bitcoins is totally wrong, plus yes we can never have exact 21 million bitcoin in circulation whether there is lost coins or not because the number that will forever be in circulation  is maxed at 20,999,999.9769 bitcoins

While this lost bitcoin was a tragedy to the holders, other holders found it favorable, as it tends to increase the scarcity, (according to what I’ve read here in this forum and I quote “Lost coins only make everyone else's coins worth slightly more.  Think of it as a donation to everyone”)

This is not just a random quote on the forum it’s the founder’s comment and that means it’s fact.

Now my question here is; Have you ever wondered that some of this losses could just be an illusion and can someday show up in the blockchain? It being moved from those dormant addresses deposited in an exchange or another address?
Though circulating supply of bitcoin varies, the amount you see now may fluctuate in the next ten minutes but then, if 1 million coins from already considered lost hits the blockchain, will it trigger a short-term panic that will result in market dips and uncertainties in the mind of holders?

It’s already agreed that most of the coins considered lost will surely wake up one day and come into the market and yes if they do come into the market it depends on the direction they take, if it is sent to another self custody wallet then it is certainly for another holding period and won’t cause panic if it is Sent to an exchange then it depends on the amount that is going there as it’s considered for sell, anything above million bitcoin will cause little panic in the market and a sell of all will cause a dip but I am sure it won’t be for a long term except it’s from wallet associated with Satoshi

Now, How can we create the difference between a long term holder and a lost wallet?

We can create that difference now and that’s why we should not call all dormant bitcoin lost

If the recovery result in a drastic dip, what is the tendency of bitcoin bouncing back to the original price.

If the recovery results in dip yes I believe that bitcoin will recover because historically it has always recovered from all dips. There could be exceptions if it is from Satoshi coins and no clear explanations for the sell off

[Livingleged]

We always talk about bitcoin’s scarcity and aswell the 21 million hard cap and the idea is to increase scarcity. Record has it that the estimate of bitcoin that has been lost so far is 3 to 4 million i.e we can never have the 21 million because the lost ones are not available in supply but counted as already mined. A Bitcoin is speculated lost by longterm inactivity of longterm holders.

This is very true because bitcoin protocol is not designed in such a way to identify whether a coin actually lost or the holder is just holding for long, wxh is why dormant coin are not necessarily lost coin. And also The 3 to 4 million cited by you is just an estimated value and not a cryptographic fact, because some coin are provably unspendable like the coin sent to burn mechanism.

While this lost bitcoin was a tragedy to the holders, other holders found it favorable, as it tends to increase the scarcity, (according to what I’ve read here in this forum and I quote “[Lost coins only make everyone else's coins worth slightly more.  Think of it as a donation to everyone”)

Yes this is actually satoshi’s quote I bolded in your post, but it doesn’t really mean that when a coin is considered as lost coin the protocol will automatically redistribute those coin among other holders, nothing is actually transferred, it’s just that the coin are locked to their original script and the private key are no longer available that’s if they are truly lost. And as we know that bitcoin is said to have a market cap of 21 million. If some become unspendable, the number of coin that will be competing for ownership and liquidity will definitely become smaller and that why the remaining coin will slightly gain larger fraction of the total available supply based on my understanding.

Now my question here is; Have you ever wondered that some of this losses could just be an illusion and can someday show up in the blockchain? It being moved from those dormant addresses deposited in an exchange or another address?

Yes because there have been several cases where very old coin move from a dormant account after a decade of inactiveness.
 

[MusaMohamed]

While this lost bitcoin was a tragedy to the holders, other holders found it favorable, as it tends to increase the scarcity, (according to what I’ve read here in this forum and I quote “Lost coins only make everyone else's coins worth slightly more.  Think of it as a donation to everyone”)

You need to know where you got it, and who posted it. It is in Dying bitcoins topic and Satoshi Nakamoto posted that.

Lost coins only make everyone else's coins worth slightly more.  Think of it as a donation to everyone.

Now my question here is; Have you ever wondered that some of this losses could just be an illusion and can someday show up in the blockchain? It being moved from those dormant addresses deposited in an exchange or another address?

It's not illusion, it's estimating number on possible lost bitcoins.

It's different between possible lost bitcoins and lost bitcoin. When you are able to differentiate between possible lost bitcoins and lost bitcoins, you will see it is not a big issue for discussion or concern.

Lost Bitcoin: 3.7 million Bitcoin are probably gone forever. 3.7 million is an estimation, and you see it's "probably".

You can make your own estimation by using this.
https://www.bitcoinmagazinepro.com/charts/hodl-waves/

Certainly, dormant bitcoins but not lost ones will be moved in the future.

[348Judah]

we can never have the 21 million because the lost ones are not available in supply but counted as already mined. A Bitcoin is speculated lost by longterm inactivity of longterm holders.

You will still have to believe that that 21 million supply is ever valid, because the ones that are lost are not subtracted from the same actual value but also left as a spread to the overall market value upen every holder, which means in a nutshell, no coin is actually lost because the impact of those unacceptable coins by their holders have significant impacts on the value of what others are holding.

Now my question here is; Have you ever wondered that some of this losses could just be an illusion and can someday show up in the blockchain? It being moved from those dormant addresses deposited in an exchange or another address?

This is merely impossible because they will rather remain in those wallets or lost forever and the spread increases on the value of our long time holding assets in Bitcoin over the time, this is why we don't seem to see any lost bitcoin as a serious concern because the significant influence of the value of that same coin has been spread across the Bitcoin everyone of us are holding.

[purple_sparkles]

we can never have the 21 million because the lost ones are not available in supply but counted as already mined. A Bitcoin is speculated lost by longterm inactivity of longterm holders.

You will still have to believe that that 21 million supply is ever valid, because the ones that are lost are not subtracted from the same actual value but also left as a spread to the overall market value upen every holder, which means in a nutshell, no coin is actually lost because the impact of those unacceptable coins by their holders have significant impacts on the value of what others are holding.

Now my question here is; Have you ever wondered that some of this losses could just be an illusion and can someday show up in the blockchain? It being moved from those dormant addresses deposited in an exchange or another address?

This is merely impossible because they will rather remain in those wallets or lost forever and the spread increases on the value of our long time holding assets in Bitcoin over the time, this is why we don't seem to see any lost bitcoin as a serious concern because the significant influence of the value of that same coin has been spread across the Bitcoin everyone of us are holding.

No matter what happens, the price of bitcoin remains the same regardless of whether all the coins are already in circulation or not, because even the coins that haven't been mined yet are already taken into account.Considering that no new bitcoin will ever be created beyond the fixed supply, I don't think that even if someone managed to mine all of the remaining bitcoin, it would simply end up in the hands of users and be stored in the digital wallets of millions of people. I don't think that would reduce its price.

[_act_]

pm
No matter what happens, the price of bitcoin remains the same regardless of whether all the coins are already in circulation or not, because even the coins that haven't been mined yet are already taken into account.Considering that no new bitcoin will ever be created beyond the fixed supply, I don't think that even if someone managed to mine all of the remaining bitcoin, it would simply end up in the hands of users and be stored in the digital wallets of millions of people. I don't think that would reduce its price.

This is not correct, but you have a point because there is increasing demand in bitcoin. If the demand is constant (but which is not possible) and not increasing, but the supply that has not been mined got mined, there will be reduction in bitcoin price to some little extents. You can easily understand that from the price formula that contains both the marketcap divided by the supply.

[hd49728]

No matter what happens, the price of bitcoin remains the same regardless of whether all the coins are already in circulation or not, because even the coins that haven't been mined yet are already taken into account.

It's true and not true.

It's true because many shitcoins with massively bigger total supplies and circulation supplies than Bitcoin's actually have very lower prices on the market.
It's untrue because only a number used to setup a total supply, halving schedule and actual circulating supply at the present don't help price of a coin. There are other technical factors which contribute to make up Bitcoin value. The value decides the price, while demands and hypes on the market only can affect the price up or down in shot term.

How is the 21 Million Bitcoin Cap Defined and Enforced?

If you are wondering about it, let's see how Bcoin forks as shitcoins don't have similar values and prices of Bitcoin.
How Many Bitcoin Forks Are There? You will be surprised!!!

[arzuo]

Now my question here is; Have you ever wondered that some of this losses could just be an illusion and can someday show up in the blockchain? It being moved from those dormant addresses deposited in an exchange or another address?
Though circulating supply of bitcoin varies, the amount you see now may fluctuate in the next ten minutes but then, if 1 million coins from already considered lost hits the blockchain, will it trigger a short-term panic that will result in market dips and uncertainties in the mind of holders?

These coins may not be gone forever as speculation has it, I read about the ledger signers and time lock, which talks about how coins can be inherited, holding forever is next to dormancy, so they may just be sitting in a ghost town. and technically, there is no guarantee they are gone forever.

Now, How can we create the difference between a long term holder and a lost wallet?
If the recovery result in a drastic dip, what is the tendency of bitcoin bouncing back to the original price.

I don't think there will be a big drop in price, because not everyone will recover their Bitcoin at the same time. Everyone will recover it according to their different needs and at different times, which is why this recovery will not have as much panic and impact on the market, because not everyone feels the need at the same time or at the same moment.

[Publictalk792]

Questions are good but the last one is most interesting one, and it is technically impossible to tell apart long term holder from lost wallet onchain. They are both the same, coins that have not been moved for years. Chainalysis uses chance based models that are based on wallet age, last activity patterns and known exchange addresses, but it is guessing, not certain.
This “lost coins showing up” situation has happened in the past. In 2023 a wallet sleeping since 2010 moved 1,000 BTC and briefly scared the market. Price was down but bounced back in days. So, yes, it is possible to be panicking in short term, but Bitcoin has shown it can take these shocks pretty well.
Actual problem would be if the wallets that Satoshi is known to have moved, that is about 1.1 million BTC and that would be different story completely. Regular sleeping wallets moving in smaller amounts? Market will likely ignore it after initial shock.

[noorman0]

Now my question here is; Have you ever wondered that some of this losses could just be an illusion and can someday show up in the blockchain? It being moved from those dormant addresses deposited in an exchange or another address?

This isn't unheard of; several blockchain monitoring tools have detected multiple dormant addresses moving their coins. In fact, the lost coins never leave the blockchain; in the realm of speculation, they continue to contribute to market capitalization.

Now, How can we create the difference between a long term holder and a lost wallet?

No one knows for sure, but some time ago, someone began claiming legal ownership of the lost coins, likening them to abandoned property. He used OP-return to send messages to thousands of supposedly dormant addresses. Eventually, some of them responded to the messages, proving they weren't abandoned.

[Hatchy]

Now, How can we create the difference between a long term holder and a lost wallet?
If the recovery result in a drastic dip, what is the tendency of bitcoin bouncing back to the original price.

You have to understand that most of the numbers or figures are just speculations. There has been a long debate on how to identify lost wallet from dormant wallets because both literally involves long term hold, where the coins have not moved since purchasing or a very long time. You are indeed on point, but you must understand that when those coins begins to wake up, they won't just all wake up at the same time. It's not possible. It's normal for us to see wallets wake up and move coins around after a long time, so I don't see how it would affect the price of the market that much. People might panic like some already said when these coins are moved to exchanges but the impact on the market won't be as much as you think. Everything still on speculation.

[rachael9385]

Now my question here is; Have you ever wondered that some of this losses could just be an illusion and can someday show up in the blockchain? It being moved from those dormant addresses deposited in an exchange or another address?

Don't forget the fact that even though you lose access to your Bitcoin, it's still on the blockchain. Bitcoin doesn't disappear even though you lose access to your private key.

Obviously, a wallet can be dormant for decades, and we can't know if the original owner decides to keep it that way or if they no longer have access to it. But as for me, so long as there are recent deposit records, 1 year or a few months, I will just take it that it's not lost.

One thing I'm sure about is that when the seed phrase to your Bitcoin wallet is lost, the chances of recovering it are very slim. Only a few people have had the chance to recover their seed phrase and access their Bitcoin, which means that the only way lost Bitcoin can be recovered and moved from one wallet to another is when the owner or someone else has access to the seed phrase.

However, no matter how it goes, I don't think that the movement of Bitcoin price will affect Bitcoin to the point that it will crash, so even though all Bitcoin is mined and none is lost, it will still not affect the price because it has a limited supply already

[Dr.Bitcoin_Strange]

Now my question here is; Have you ever wondered that some of this losses could just be an illusion and can someday show up in the blockchain? It being moved from those dormant addresses deposited in an exchange or another address?
Though circulating supply of bitcoin varies, the amount you see now may fluctuate in the next ten minutes but then, if 1 million coins from already considered lost hits the blockchain, will it trigger a short-term panic that will result in market dips and uncertainties in the mind of holders?

Since different sources such chainanalysis and fortune are giving different estimated number of Bitcoin that is considered to have been permanently lost, it just made me also think that some of these coin might not have been permanently lost, perhaps the blockchain doesn't flag permanently lost Bitcoin, so it is actually impossible that analyst can know for sure the exact amount of Bitcoin that its owners can not gain access to them again. So, I'm not also completely convinced that all these Bitcoin are lost.

If maybe In the future, a large amount of Bitcoin is moved out from any of those dormant address which has already been considered as lost forever, then it can certainly cause FUD and the price could dip, but I believe that Bitcoin price will always recover.

Now, How can we create the difference between a long term holder and a lost wallet?

Analyst uses their own personal method to determine a lost coin, that's why there is no accuracy in the number of stated lost coins, so I don't thing there's a means to actually be very accurate about this, although, I'm guessing that some long term holder could move their coins to different address after a long period depending if they feel that the security of the current address is not so secure again as before.

[aoluain]

Now, How can we create the difference between a long term holder and a lost wallet?
If the recovery result in a drastic dip, what is the tendency of bitcoin bouncing back to the original price.

You cannot create a difference because of the degree of anonymity with owning
Bitcoin. The best you can do is:

There will never be more than 21,000,000 coins and its a guarantee that some will
be lost forever.

Yea in the future there might very well be a 30 year old wallet which comes to life.

TBH, I dont lose any sleep over it whatsoever. I am content that there will not be
more than 21,000,000 and some will be lost.

[Ambatman]

Have you ever wondered that some of this losses could just be an illusion and can someday show up in the blockchain?

No I don't.
And also the coin were always in the UTXO set and just hasn't been spent.
The blockchain simply record the first spend after the long period of inactivity.

if 1 million coins from already considered lost hits the blockchain, will it trigger a short-term panic that will result in market dips and uncertainties in the mind of holders?

I believe you speaking about Satoshi coins
It would affect the market not only because it was thought lost before but what it represents.

How can we create the difference between a long term holder and a lost wallet?

We can't.
We can tell by just looking at there blockchain
The only I can think of are coins sent to provably burn address.

If the recovery result in a drastic dip, what is the tendency of bitcoin bouncing back to the original price

High.

[Royal Cap]

Now, How can we create the difference between a long term holder and a lost wallet?

The biggest thing is we can never say for sure which wallets are truly lost and which ones have just been inactive for years. Many old wallets have suddenly become active after 10 or 15 years, so just because there have been no transactions for a long time is not proof of loss.

Though circulating supply of bitcoin varies, the amount you see now may fluctuate in the next ten minutes but then, if 1 million coins from already considered lost hits the blockchain, will it trigger a short-term panic that will result in market dips and uncertainties in the mind of holders?

And if a lot of old Bitcoins come to the market at once, it is natural to panic in the short term but just because coins are moved does not mean that they will all be sold. There have been many cases in the past where old coins were moved, but the market returned to normal after a few days, so instead of panicking when you see a big movement on the blockchain, you need to also see whether those coins are actually going to the exchange or not.