Over $1b in ether was lost forever due to bugs and errors
More than $1 billion of ether (ETH) has been permanently lost due to software bugs and human error. The revelation comes from a study by Conor Grogan, Coinbase’s director of product strategy and business operations.
The report revealed that 636,000 ether, or about $1.15 billion at current market prices, has been rendered inaccessible. This represents 0.5% of total ETH supply. Per Grogan, the lost ether includes coins sent to incorrect addresses and those lost due to smart contract bugs and other programming issues.
Most of the lost coins, or 513,746 ETH, were lost during the 2017 Parity wallet issue. The flaw was triggered by a user and led to a loss of $280 million at that time.
Over 85,000 ETH became inaccessible due to buggy smart contracts, which automate transactions and agreements on the Ethereum network. They have been responsible for many high-profile losses in the past.
Moreover, some 24,000 ETH were sent to Ethereum’s so-called “burn address,” a destination for which no one holds the private key. This can occur when users mistakenly send coins to an incorrect address or when smart contracts are programmed with errors.
The remaining lost ether is distributed among various bugs, mishandled transactions, and wallet issues. Despite advances in wallet software and user education, human error remains a significant factor in the loss of cryptocurrency.
Experts and even Ethereum’s co-founder Vitalik Buterin have called for greater attention to security and the development of more user-friendly tools to help prevent such losses in the future. While some decentralized finance (DeFi) platforms have made strides in this area, much work remains to be done. According to a recent report, in 2022 only hackers stole over $6 billion from various DeFi protocols.
As of March 21, ether is trading at $1,802, with a market capitalization of $220 billion. The second-largest crypto is up 3.75% in a past week.