Human Error Causes $3.4B Ether Loss, Says Coinbase Exec

Ether lost forever due to user errors and bugs has climbed to 913,111 ETH — around 0.76% of the current circulating supply, according to Coinbase’s head of product, Conor Grogan.

Grogan shared the estimate on X on Sunday, noting that the lost Ether (ETH) due to human error and bugs now accounts for more than $3.43 billion at current market prices.

When including 5.3 million ETH destroyed via Ethereum Improvement Proposal 1559 (EIP-1559) since 2021, the share of ETH lost is even higher.

Including ETH burned with EIP-1559, the total amount of Ether lost — around 6.2 million ETH ($23.4 billion) — would account for 5% of Ether’s current supply of 120.7 million, Grogan said.

Lost Ether supply surges 44% since March 2023

According to a similar report from March 2023, the amount of Ether supply lost due to bugs and user errors has surged 44% from 636,000 ETH reported at the time.

Despite the surge, the largest sources of loss have remained mostly the same, with the latest report citing the same major incidents highlighted in Grogan’s March 2023 analysis.

Both reports specifically referred to the 306,000 ETH loss due to the Web3 foundation’s Parity Multisig bug, Quadriga’s 60,000 ETH loss to a faulty contract and Akutars’ 11,500 ETH loss in a faulty mint of non-fungible tokens (NFTs).

The only amount that has changed since is the transfers to a burn address, which has added 1,000 ETH.

“To be clear, this $3.4 billion number significantly undershoots the actual lost/inaccessible ETH amount — it just covers instances where Ethereum is locked forever,” Grogan wrote in the latest report.

Related: Crypto funds post record $4.4B inflows as Ether ETPs break 2024 gains

“For example, it doesn’t cover all lost private keys or things like Genesis wallets that have been forgotten,” he added.

Cointelegraph approached Grogan for comment regarding the biggest contributors for the surge in ETH supply losses since March 2023, but had not received a response by publication.

Ethereum supply is flexible

Unlike Bitcoin (BTC), which has its supply capped by 21 million coins to ever be issued, Ether does not have any hard cap on its total supply.

Still, ETH issuance has been significantly constrained by two major upgrades: EIP-1559 and the Merge.

Introduced in August 2021 as part of the London Hard Fork, EIP-1559 changed Ethereum’s fee mechanism by burning a portion of transaction fees, effectively reducing the circulating supply over time.

The Merge, completed in September 2022, transitioned the Ethereum network from proof-of-work (PoW) to proof-of-stake (PoS), resulting in a significant drop in new ETH issuance.

According to data from YCharts, Ethereum’s supply steadily grew from 2020 to 2022, reaching 120.5 million ETH by September 2022.

The supply then started to decline, dropping slightly by about 0.4% through April 2024, reflecting reduced issuance and ongoing ETH burns. Since then, the supply has resumed gradual growth, reaching around 120.7 million ETH at the time of writing.

Magazine: Outrage as $1.8B ‘DGCX’ crypto scam ringleader mocks victims: Asia Express