Lost Coins

Lost Coins
 
The Bitcoin protocol is made so that 21 million Bitcoins will ever exist within the network.  As of the day this article was written, February 27th 2014, 12.45 million coins have been distributed.  I often am asked is there any way to recover lost coins?
 
There are several ways coins can be lost.  One way is not having a private key to access the wallet that contains Bitcoins.  This can happen if you do not have any backups of your wallet.dat file and it becomes corrupted.  Another way is to send transfer Bitcoins to a valid address you do not control.  Destroying or deleting backups can also be a cause.
 
Bitcoins can only be recovered in the physical sense.  If you have a corrupted hard drive, there are costly and timely data-recovery procedures that might be able to resurrect your original wallet file.  There have been many success stories where corrupted drives have been sent to experts who charge around the range of 20% of Bitcoins recovered.
 
Things get a little complicated here.  Wallets can be encrypted locally, so on top of the private key, you also need a password in order to make transactions in the wallet.  In the event that this local password is lost, you can send your wallet.dat to a specialist who can brute force the password.
 
Bitcoins cannot be recovered by way of bruteforcing the private key itself.  This means that if there is no possible recovery of the wallet.dat file from hardware, and all you have is the public key, Bitcoins cannot be recovered.  If this was possible, you could bruteforce any Bitcoin wallet; the value would drop to zero.
 
When Bitcoin was worth sub-cent amounts, many Bitcoins were mined and forgotten about because they had no value.  I have read much original research into the calculation of lost coins, and most of them estimate they are somewhere in the millions.  I will look for this research and add links to the blog when I find them.
 
Bitcoins are never truly gone from the network however.  The Blockchain still has record of which wallet contains the coins, even if no one has access to them.

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