Lost coins and Bitcoin’s monetary policy

All of the current ~18M coins in circulation can be tracked by the time since coins were last moved. In other words, we can study Bitcoin’s active supply by the time since coins were last transferred on the network. According to on-chain data provider Glassnode on April 26, 2020, the bitcoin can currently be broken down as follows:

  • 7.52% of coins last moved over 10 years ago.
  • 8.29% of coins last moved 7 to 10 years ago.
  • 6.21% of coins last moved 5 to 10 years ago.
  • 5.64% of coins last moved 3 to 5 years ago.
  • 15.30% of coins last moved 2 to 3 years ago.
  • 15.95% of coins last moved 1 to 2 years ago.
  • 13.86% of coins last moved 6 to 12 months ago.
  • 6.43% of coins last moved 3 to 6 months ago.
  • 11.66% of coins last moved 1 to 3 months ago.
  • 5.41% of coins last moved 1 week to 1 month ago.
  • 3.13% of coins last moved 1 day to 1 week ago.
  • 0.61% of coins moved in the last 24 hours.

To rephrase, nearly 60% of circulating bitcoins have not moved in over a year (as of April 26th). Further, ~1.3M Bitcoin has not moved in more than ten years. On May 20th however, the Bitcoin community was amazed by the awakening of 50 bitcoins that had not moved since February 2009, a mere month after Bitcoin was created. Many experts swiftly refuted the idea that it was Bitcoin’s creator back from the dead. On the other hand, Bitcoin is pseudonymous, and all of these takes are speculation at the end of the day.

Only a handful of miners were active at the time these coins last moved, one of them being late cryptographer Hal Finney. Such movement of ancient coins may also be attributed to a heartwrenching post about Hal’s legacy here, written a year before his death in 2014:

“That’s my story. I’m pretty lucky overall. Even with the ALS, my life is very satisfying. But my life expectancy is limited. Those discussions about inheriting your bitcoins are of more than academic interest. My bitcoins are stored in our safe deposit box, and my son and daughter are tech savvy. I think they’re safe enough. I’m comfortable with my legacy.”

Of course, insights into the behavior of holders can only go so far using on-chain data. Despite being a public and globally distributed ledger, Bitcoin is pseudonymous and maintains privacy with proper use. It is likely impossible to predict which of these coins are lost forever and which can potentially resurface. However, it is possible to gain a general sense of the long-term conviction of holders.


What do you think?


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