In less than a month, Bitcoin will enter its 12th year of operation. In the past 11 years, Bitcoin and the entire blockchain world have come into the spotlight from mailing lists, professional papers and technical forums. The digital currency economy and blockchain technology have been out of the niche circle. became a worldwide topic. At present, the block height of Bitcoin has exceeded 600,000 (the statistical scope of this article is the first 606,000 blocks), and the market value in circulation exceeds 130 billion US dollars, which accounts for about 70% of the total market value of the entire digital currency market (December 6, 2019 day). The average daily transfers in the Bitcoin network are close to tens of billions of dollars.
A large part of Bitcoin's value comes from its scarcity. Probably the first thing everyone who comes into contact with Bitcoin remembers is that magic number—21 million. As of block height 606,000, a total of 18,075,000 bitcoins were generated through block rewards, accounting for about 86% of the total. This means that in the next two decades, the new Bitcoins generated through mining will only account for 14% of the total, or less than 3 million. But just like banknotes will be accidentally damaged during storage and circulation, although the UTXO of Bitcoin is difficult to be eliminated after generation, the private key can be used, and so can the hard disk where the private key is stored. In the early stage of the largest output, the price of Bitcoin was very low. Most of the miners and traders in that period were out of temporary interest and experimental nature, and it is likely that they would not keep the private key seriously for a long time.
How many bitcoins have become "dead coins"?
So how many of the more than 18 million bitcoins accumulated today can enter the circulation channel? How many became "dead coins" and were permanently removed from the 21 million cap? Let's take a closer look at the data level.
If we add up the spendable outputs (UTXOs) in Bitcoin, we get a slightly smaller amount than the total issued based on block rewards. There are several reasons for this:
The 50BTC in the founding block did not generate UTXO, so it cannot be spent;
Some miners did not apply for all block rewards, resulting in no corresponding UTXO for this part of BTC;
Duplicate coinbase transactions. In the early days, a small number of miners used the Bitcoin protocol to not prohibit duplicate transactions (creating exactly the same transaction to cover the old transaction), and created duplicate transactions in coinbase (coinbase has no input, so it is easy to create the same transaction), making Some UTXOs of coinbase are overwritten and cannot be recognized.
A small amount of BTC was sent as OP_RETURN, which made it impossible to be included in the UTXO set.
In a recent study, CoinMetrics counted the total amount of BTC affected by the above situations [1], and concluded that a total of 182.6754176 BTC could not be circulated because there was no corresponding UTXO.
This part of the "disappearing" BTC is only a small part of the "dead coins". I believe that all friends who have been exposed to digital currencies outside the exchange have encountered a problem: where is my private key/mnemonic? And many BTC can never be used again because of the loss of the private key. There are also some bitcoins that have been intentionally or unintentionally entered into addresses with unknown private keys or using wrong scripts, making this part of bitcoins fall into the void forever. But from the perspective of data, these two situations can be regarded as one, and both belong to silent addresses. Our previous "Satoshi Nakamoto's Bitcoinimage description
Data source: Chain.info
image description
image description
Data source: Chain.info
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Data source: Chain.info
in conclusion
in conclusion
Disclaimer: The opinions involved in this report are based on comprehensive research and judgment based on data analysis. They are only for reference and not as investment basis. Risky investment in currency speculation requires caution.
references
[1] https://coinmetrics.substack.com/
[2] https://coinmetrics.substack.com/
Disclaimer: The opinions involved in this report are based on comprehensive research and judgment based on data analysis. They are only for reference and not as investment basis. Risky investment in currency speculation requires caution.
