An estimated 3.7 million Bitcoin are thought to be lost or unused because of forgotten passwords, amounting to about $28 billion.
Analysts predict that a huge amount of the 21 million Bitcoin that has already been mined may be sitting unused because of lost credentials needed to access them by investors, reports the Financial Times. Though around 4 million Bitcoins are yet to be mined, an additional 4 million might have to be written off.
Groups such as exchanges and merchants held onto around 2.2 million Bitcoin between December and April, and the virtual currency has been criticised for the volatility that prevents it from being a mainstream means of payment.
“It’s very important to stress, this is not in any sense a rational market,” said David Gerard, the author of Attack of the 50 Foot Blockchain. “It’s very thinly traded, very badly structured . . . and it’s stupendously manipulated. Anyone who goes in not realising just how manipulated the crypto markets are will get skinned.”
Earlier this year, it was reported that more than 70 per cent of cryptocurrency exchanges are allowing users to secure accounts with inadequate passwords such as ‘12345’ or ‘password’.
“Signing up for a cryptocurrency exchange is akin to signing up for a bank account,” said Dashlane CEO Ammanuel Schalit. “With your bank account, credit cards, Bitcoin and other digital assets potentially stored on the exchange, it’s critical that your account is locked down on the security front.
“The fact that most exchanges allow their users to create incredibly weak passwords should serve as a wake-up call to the entire industry.”
Now it seems that some users are making their passwords too hard to remember, or simply forgetting about their crypto collection altogether.