According to Conor Grogan, the reasons for the losses were code errors and the human factor

​Coinbase director says 636 000 ETH lost forever

21.03.2023 - 14:45

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What’s new? Coinbase crypto exchange director Conor Grogan has identified 636 000 permanently lost Ethereum coins worth about $1,15 billion, which is about 0,5% of the entire circulating supply of the asset. According to its research, the results of which were published on March 21, the reasons for the loss of ETH were “thousands of instances of Ethereum typos, user errors, and buggy contracts.”

The most widespread cases of ETH loss. In 2017, 306 000 coins ($552,3 million) were lost due to a bug in a multi-signature wallet smart contract from Parity Technologies. 60 000 ETH ($108,3 million) in 2020 was also lost by crypto exchange Quadriga due to a smart contract failure, and about 24 000 ETH ($43,32 million) was sent to a burn address by the Ethereum users for all time. Another 11 500 ETH ($20,76 million) was lost due to the failure during the release of the 2022 Akutars collection of non-fungible tokens (NFTs).

Cryptocurrency burning is the process of removing a certain number of tokens from circulation, after which they become permanently inaccessible. Often burning is carried out in order to increase the rate of an asset or prevent it from inflation. Burning can be done by sending tokens to a wallet without a private key, by conducting a hard fork, using special software, or, as in the case of Ethereum after the transition to PoS, using algorithms that destroy some of the transaction fees.

Grogan stressed that his figure is significantly lower than the actual number of lost and inaccessible ETH, and it only includes cases where coins are locked forever. In particular, this number does not include ETH, which can not be accessed due to the loss of private keys from crypto wallets.

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As of March 21, 14:30 UTC, ETH is trading at $1805, having gained 1,91% in 24 hours and 3,56% in a week, according to the Binance exchange.

Earlier, Ethereum co-founder Vitalik Buterin stressed the importance of the self-storage of cryptocurrencies and named ways to restore access to a wallet if keys are lost.

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