The unique decentralized design of Ethereum (ETH) ensures security and transparency, but it has a serious drawback in that assets sent by mistake cannot be reversed. According to Coinbase director Conor Grogan, the permanently lost Ethereum amounts to 913,111 ETH, which is approximately 4.71 trillion won (about $340 million) at current market rates. This represents about 0.76% of the total circulation, and its supply limitation effect on the market cannot be ignored.
Grogan emphasized that this figure is a minimal estimate and suggested that the actual number of lost Ethereum could be much higher. He stated on Twitter, "Irretrievable losses occur due to user mistakes or technical vulnerabilities, and transactions recorded on the blockchain cannot be modified." While blockchain's immutability provides strengths in asset preservation, it can also become a 'trap' as errors cannot be undone.
The main causes of Ethereum loss can be analyzed into three categories. First is transfer to an incorrect address. Errors such as typos or sending assets to an unrecoverable smart contract address often lead to permanent loss. Second is smart contract security vulnerabilities. Continuous reports show funds being locked or assets stolen due to code errors or inadequate design. Third is multi-signature wallet configuration errors. If one or more signature participants lose authentication keys or the system itself is deleted, the ETH stored inside becomes permanently inaccessible.
Notable examples include the loss of 306,000 ETH (approximately 1.58 trillion won) due to the Parity Wallet bug, 60,000 ETH (about 310.2 billion won) lost from QuadrigaCX's wallet access failure, and a smart contract error in the Non-Fungible Token project Akutars resulting in $34 million (about 472.6 billion won) in losses. Additionally, ETH sent to burn addresses due to address typos amounts to 25,000 ETH (about 129.4 billion won).
The problem is that most of these lost ETH are absolutely unrecoverable due to structural limitations. Given Ethereum blockchain's characteristics, no central controlling authority exists, and transactions are permanently recorded in blocks immediately after verification. Grogan added, "Many losses are not disclosed by general users or project sides and thus cannot even be statistically tracked."
Additionally, since Ethereum introduced an automatic burning function through Ethereum Improvement Proposal (EIP)-1559, approximately 5.3 million ETH (about 27.48 trillion won) has been burned, reducing the total circulation. Including this, over 5% of the total supply has disappeared from the market.
The issue of Ethereum loss is serious beyond mere user mistakes, signaling infrastructure security vulnerabilities and design flaws. Ethereum holders must strengthen personal key management and review procedures during transfers, while developers must contribute to reducing such cases through safer smart contract designs.
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