Instead of giving in to our emotions and fearmongering, let's take a look at some facts.
Millions of bitcoins have been lost permanently because people lost the physical backup of their seed phrase.
That is an indisputable fact. The exact number is not known, but most experts agree it is in the millions.
How many bitcoins have been lost due to hacked PMs? I don't know of even one bitcoin that was (verifiably) lost that way.
So statistically you are far more likely to lose your bitcoin because you lost the physical backup of your seed phrase then
your PM getting hacked.
Estimating the Number of Lost BitcoinAs of early 2025, analysts estimate that between 2.3 million and 3.7 million Bitcoins are permanently lost, representing approximately 11–18% of Bitcoin’s fixed maximum supply of 21 million coins, with some reports suggesting losses as high as 4 million BTC. This impacts the effective circulating supply—while the total mined Bitcoin stands at around 19.8 million BTC, the usable amount is closer to 15.8–17.5 million BTC after accounting for these losses, highlighting a significant reduction in accessible coins despite the unchanged maximum supply of 21 million BTC.
But what does that mean, exactly? How can Bitcoin be lost? Today, let’s tackle this phenomenon and help you understand how Bitcoin really works.
What Exactly Does “Lost” Bitcoin Mean?
Bitcoin can indeed be “lost,” but this doesn’t mean it disappears entirely—instead, it becomes permanently inaccessible. This happens when a user loses, forgets, or destroys their private key, a unique secret code that serves as the only way to access and spend their Bitcoin.
Without this key, the Bitcoin remains locked on the blockchain, a decentralized public ledger that records all transactions. Unlike traditional banking systems where a lost password might be reset by a central authority, Bitcoin’s decentralized design offers no such recovery option. As a result, lost Bitcoin is effectively removed from circulation, reducing the available supply of the cryptocurrency, which is capped at 21 million coins.
Even when Bitcoin is lost, it still technically exists on the blockchain—it’s just unusable without the private key.
Think of it like a vault with a lost combination: the contents are still inside, but no one can get to them. This highlights a key feature of Bitcoin’s security and autonomy: there’s no central entity to step in and help recover lost keys, placing full responsibility on the user to manage them securely. Additionally, some Bitcoin is intentionally “burned” by sending it to addresses with no known private key, further shrinking the circulating supply.
In short, lost Bitcoin is a real and irreversible risk. Well, if you were to ask its creator, he would say (and we quote) “Lost coins only make everyone else’s coins worth slightly more. Think of it as a donation to everyone.” Either way you look at it, it’s important to safeguard your private keys at all costs.