- The decentralized nature of Bitcoin has always been one of its biggest selling points, but imperfect storage methods have made millions of tokens inaccessible.
- According to a report from The New York Times on Tuesday, it is estimated that about 20% of the existing 18.5 million bitcoins (worth about $140 billion) will be lost or stuck in locked digital wallets.
- Currently, these coins have actually been trapped behind incredibly complex encryption and forgotten passwords.
- The chairman of the Bitcoin Association, Jimmy Nguyen, told Business Insider that the solution can still come from cryptocurrency reform.
- Nguyen said that in the event that wallet passwords or property transfers are forgotten, an emergency mechanism that can restore Bitcoin can make it a more “open and user-friendly”
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Cryptocurrency enthusiasts praise the decentralized nature of Bitcoin. However, imperfect methods for protecting digital tokens are pulling millions of bitcoins out of circulation, and there is little hope of recovery.
Bitcoin owners have the private keys necessary to spend or move tokens. These keys exist in the form of complex data strings, usually stored in protected digital wallets.
Then usually passwords or authentication measures are used to protect those wallets. Although their complexity allows owners to store their bitcoins more securely, losing keys or wallet passwords can have disastrous consequences. In many cases, Bitcoin owners will be turned away indefinitely.
According to the New York Times citing data from Chainalysis on Tuesday, it is estimated that about 20% of the existing 18.5 million bitcoins will be lost or trapped in inaccessible wallets. Currently, the money is worth about 140 billion U.S. dollars. These bitcoins remain in the world supply and still have value, but they have actually been blocked from circulation.
In short, these coins will be trapped indefinitely, but their inaccessibility will not change the price of cryptocurrencies.
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The chairman of the Bitcoin Association, Jimmy Nguyen, told Insider: “The cryptocurrency community uses this phrase:’Not your key, not your coin.'”
For the time being, this sentence is correct. Certain exchanges such as Coinbase have emergency recovery measures that can help users regain access to forgotten keys or passwords. Ruan said, but the exchange is not safe for wallets, and some have even been hacked.
The Bitcoin community is now at a crossroads, and members are divided on whether Bitcoin should retain its strict security methods or make some of its decentralized transactions user-friendly protection measures.
Nguyen belongs to the latter. The cryptocurrency advocate believes that a mechanism should be created to allow users to recover inaccessible bitcoins in the event of forgotten passwords, property transfers and incorrect payment methods. No such system maintains a barrier between cryptocurrency enthusiasts and people who are not yet keen on Bitcoin.
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Ruan said: “If I hold the key to the house, it does not mean that I have the key. I may have stolen the key to your house. You may have lent me the key.” “It does not prove who owns the property or asset Ownership.”
He added that maintaining the current method of Bitcoin storage can also reduce its value, both as a new payment method and as a security.
Nguyen said: “Among Bitcoin supporters, even if it is not outright hypocrisy, there are inconsistencies because they want to advance the narrative that you must have a private key to make the coin your coin.” “If they want The value of coins has increased due to the increase in usage, then you must adopt a more open and user-friendly way to make Bitcoin.”
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