There can only ever be 21 million Bitcoin ever created. However many are lost, a small fortune lies dormant in the wallets of the mysterious founder Satoshi, and some has been stolen and blacklisted. To calculate the circulating supply of Bitcoin now and in the future we need to take all these factors into consideration along with the current mining supply. Ethereum is equally complex as there is no fixed cap on the total supply but a hard limit of 18m ETH per year while software updates expected next year are expected to turn it into a deflationary asset.
- Calculating How Many Bitcoin There Are
- Calculating How Many Ethereum There Are
- The Future Of Digital Scarcity
Calculating How Many Bitcoin There Are
Accurately calculating how many Bitcoin there are in circulation can help with modelling and valuations. To date I haven’t seen anyone do a thorough investigation of this so here goes.
How Much Bitcoin Is Mined
Bitcoin mining rewards go out on average every 10 minutes at a rate of 6.25 BTC per block (as of 2021).
At time of writing 18,888,275 BTC have already been mined with 2,111,725 remaining which will be distributed in a diminishing schedule of bitcoin halving every 4 years.
How Much Bitcoin Is Lost
Chainanalysis, an on chain analytics company, recently estimated that up to 20% of BTC supply is dormant in untouched wallets that is likely lost.
The difficulties in storing private keys safely and dealing with inheritance and passing on funds after death means that much more will be lost in the first generation of Bitcoin ownership.
There’s no real way to accurately know the correct figure but there are a lot of stories of early holders losing funds which would be worth millions today. Based on the unmoved funds analysis and not including Satoshi’s funds I’d estimate the unrecoverable funds at around 3m BTC or just over 15%. I think this will at least double in the next 50 years due to lost hardware wallets and private keys and exchange access.
How Much Bitcoin Does Satoshi Own
The Satoshi wallets from the early days of Bitcoin mining contain vast fortunes when the block rewards were 50 BTC and there was little or no competition. None of these funds have ever been moved or spent and the real identity of the creator remains crypto’s greatest mystery.
Analysis from 2013 identified the Patoshi pattern which estimates Satoshis wallets contain around 1m BTC. At the current market price this makes Satoshi Nakamoto the unofficial richest person in the world. If Bitcoin price exceeds $100k then Satoshi may well become the first trillionaire.
How Much Bitcoin Has Been Stolen
Mt Gox was the original cryptocurrency exchange which was hacked in 2011 losing 850,000 BTC. Some of which is likely to be returned to users next year after lengthy litigation proceedings. Other notable hacks include Kucoin (1008 BTC) and Bitfinex (120,000 BTC).
A lot will go unreported and there’s a lot of undisclosed information from some of the breaches. I think an estimate of 1m BTC would be somewhere in the ballpark taking into account the amounts of returned funds to Mt Gox users. Hacked funds are only taken out of circulation when they are blacklisted by the exchanges making it impossible to sell.
How Many Bitcoin There Are
From the current supply of 18,888,275 BTC I estimate that 3m has been lost, 1m is owned by Satoshi and 1m is unrecoverable from hacks leaving a total of
13,888,275 BTC with a valuation at today’s market price of $57k = $791 billion USD
Calculating How Many Ethereum There Are
Ethereum is much harder to calculate than Bitcoin because the supply is more dynamic, the losses in the DeFi space to flash loan attacks are too numerous to calculate and funds are more frequently held across multiple wallets.
How Much Ethereum Is Mined
72m Ether was pre-mined at launch and originally it was suggested 18m is mined each year. We can check the latest blocks on Etherscan to see that 2 ETH is mined roughly every 13 seconds.
2 ETH * (86400 seconds in a day / 13 sec block time) * 365 days in a year = 4,851,692 ETH mined per year.
We also need to take into account the burning mechanism introduced in EIP 1559 which in the last month has burned more than 360k ETH.
Next year we will see the beacon chain merge as the protocol moves towards a proof of stake consensus mechanism. This will coincide with the tripple halvening event which will make ETH a deflationary asset.
There is currently a circulating supply of 118,567,151 ETH and it seems unlikely that this will increase significantly if at all in the future.
How Much Ethereum Is Lost
Ethereum wasn’t released until 2015 by which time digital assets were known to have value and were already trading on exchanges. It seems likely that as a percentage much less ethereum was lost during the early days when compared to Bitcoin which for the first few years was a hobbyist project with no value.
I’ve put in a conservative estimate of 10% lost to date (11,856,715 ETH) and again doubling at least over the next 50 years as the first generation dies off taking their keys with them.
How Much Ethereum Has Been Stolen
A lot, but much of it was never blacklisted as it was routed through DeFi protocols like Curve before the tokens could be traced. One negative of decentralised finance is that there’s noone to police the network and bad actors.
However there have been some losses on exchange and some funds have been blacklisted from large breaches. There’s a big list of breaches here which includes many of the notable ones.
I’d estimate that the actual hacked funds out of circulation to be around 3m Ether or just over 2.5% of the circulating supply.
How Many Ethereum There Are
From the existing supply of 118.5m ETH I have allowed for 11.8m as having been lost and 3m is unrecoverable from hacks leaving a total of
103,710,436 ETH with a valuation at today’s market price of $4.5k = $466 billion USD
The Future Of Digital Scarcity
While I’ve done my best to estimate the true circulating supplies of Bitcoin and Ethereum it doesn’t actually tell you how much there are actually available for purchase.
For this we can look at assets on exchange using CryptoQuant data.
We can see from these charts that the supply on exchange is dwindling over the last year, particularly for Ethereum.
There are always going to be some holders that will never sell at any price. More funds are being purchased from weak hands by institutional long term holders, for example Microstrategy who are currently holding over 100,000 BTC quotes a 100 year investment time frame.
This brings about the possibility that in the future we may see a supply side issue which will introduce the concept of digital scarcity to the wider public.
