Bitcoin is a decentralized network and also a digital currency that uses a peer-to-peer system to process and verify transactions. These transactions are recorded on a public ledger, also called the Blockchain.

The standard for owning Bitcoin is by having a wallet (ideally a non-custodial wallet), which contains: a private key that gives full control of the coins, and also a public address (wallet address) that allows individuals to receive and verify transactions on the Blockchain.

As designed in the Bitcoin protocol, there can be only 21 million BTC in circulation, even though other enthusiasts might think otherwise due to proven calculations and reasons not to estimate.

The concept of Bitcoin scarcity is strongly tied to halving events where rewards of miners are reduced, thereby decreasing the amount of Bitcoin entering circulation. In more detail, the total supply (21 million) remains constant, while circulating supply keeps increasing as long as mining continues, but the amount entering circulation is reduced by halving, thereby leading to more demand.

In addition to scarcity, Lost Bitcoins happens to be a significant contributor. Dormant wallets, also known as hibernated wallets, are considered to house lost Bitcoins. Identifying the total number of lost bitcoins can be very challenging or even impossible due to the fact that there are several inactive wallets connected to the Blockchain, making it impossible to tell who is holding and who has lost.

For example, Satoshi Nakamoto happens to mine the first block. The Genesis address created holds about 99.85 BTC and is currently a dormant wallet. There are also speculations that Satoshi might have thousands of dormant wallets as they were used to receive block rewards. By subtracting the amount of Lost Bitcoin from 21 million, it is likely that we are left with an amount lesser than the total supply when unlocked.

There are hundreds, if not thousands, of dormant wallets that house Bitcoin of different amounts. When we calculate all together, we realize that we are short of the total supply, which I think would trigger scarcity as more people would want to hold the ones available.

Discussion Questions:

• Do you think all dormant wallet (long inactive wallets) are gone forever?
• As we are not certain of Satoshi's return, should we be bothered about his dormant wallets?
• do you think lost Bitcoin can cause Bitcoin scarcity in the future?
• From a total of 21million total supply, can you attempt a prediction guess of the total number of Bitcoin that would be in active wallets after all Bitcoin has been mined?

In addition, here are ...
Possible Causes of Lost Bitcoin

• Death of the holder
• Transferring to the wrong network or address (though some wallet software can detect this and notify the sender before the button is hit)
• Inability to remember memorized or find written seed phrases
• Wallet compromise such as phishing hacks, etc.

Preventive Measures

• The use of private hardware wallets (cold wallets) is strongly encouraged.
• Seed phrases should never be memorized, nor written on a mobile device or computer. They can be written on paper or in a book that shouldn't be visible to external members and should be strongly protected.
• Having a backup of your documented seed phrase is crucial in case of unplanned circumstances like a fire outbreak.

Genesis block - https://www.blockchain.com/explorer/addresses/btc/1A1zP1eP5QGefi2DMPTfTL5SLmv7DivfNa