There are some interesting challenges to Bitcoin and questions too. According to estimates, 1/5th of the world’s supply of Bitcoin is lost. This raises the question – should this loss be considered a donation? Will this pose a challenge to adoption?
Custody solutions for cryptocurrency is a booming business and have grown tremendously in the last few years. Storage and security systems that are designed to hold crypto in large quantities for clients have the chance to bring in capital from institutions and retail investors. Many waiting on the sidelines bank on such systems to help them in investing because access to funds is not lost. No one wants their investment to go missing and not be recovered.
The decentralized nature of big blockchains like Ethereum and Bitcoin poses some issues to users. Once access to the wallet is lost and private key information is lost because it hasn’t been backed up, the funds become unrecoverable. There is no controlling body to help and the blockchain cannot help people get access to their funds.
Storing private key information is a huge challenge and it has to be kept away from unscrupulous parties. This information has to be made accessible to legitimate users, as and when needed. Dealing with cryptocurrency management challenges has made many people leave their funds and move on. This is the reason for the 20% abandonment of scarce Bitcoin and has led to a huge demand for the services of crypto custody management companies.
Crypto can be lost in many ways and it is not always possible to tell who lost theirs until they declare it. The most common reason is the loss of private key information. There are instances of the funds being sent to the wrong address by users. Once this is done, there is no way to get the tokens back. Some buyers have died and there is no information about these tokens in their wills.
Crypto custody services offer security to institutional investors when they want to enter the market. For those who want to deal with uncensored money, lost crypto tokens are going to be a problem for a while longer.