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Comment by magicjosh | Hacker News Reader

User error is an order of magnitude more dangerous than scams.

Estimates suggest 4 million bitcoin are lost due to user error [1]. Estimates also suggest $14B per year of cryptocurrency is lost to scams. [2]

At $40k per bitcoin this suggests 350,000 bitcoin are lost each year to scams and theft, ignoring all other cryptocurrencies. This would take 11 years to add up to 4 million lost to user error.

Testnets are good for overcoming user error. Please learn on testnets to your heart's content.

1 https://fortune.com/2017/11/25/lost-bitcoins/

2 https://www.cnbc.com/2022/01/06/crypto-scammers-took-a-recor...

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The "lost bitcoins" figure is misleading, since most of these happened during the early days of Bitcoin when their value was low and mining outputs high. Little care was taken about backing up wallets, many have simply been abandoned. The new users of 2021 did not handle thousands of Bitcoins.

A relevant comparison should rely on surveys realized in recent years, where crypto holdings represent significant monetary value for most participants and where tooling has improved to be slightly safer.

As such, I'm not convinced that your conclusion is right. And if we add "lost gambling on cashgrab investments" to the scam category, I'm fairly sure it is wrong. From experience prowling many crypto developer communities, everyone in the field discusses investments at some point, so as a user you cannot avoid building an understanding of those mechanics as well.

Good point let's factor that in. Let's say 4% per hear or 1,500 Bitcoins are lost per day as of 2020 (crappy sources but let's use them as an example) (1)(2). That puts us at 547,000 Bitcoin lost per year compared to 350,000 from scams across all cryptocurrencies.

(1) https://coinquora.com/bitcoin-supply-loses-1500-coins-per-da...

(2) https://static1.squarespace.com/static/5d580747908cdc0001e67...

This piece cites the exact same article you linked in your previous reply as the source used to come up with their number. Same issue.

To be clear the paper claims they developed their own methodology. And that this methodology lines up with the previous source: "This figure is consistent with research conducted by Ratliff in 2014 (n. 5) and Chainalysis in 2017.6"

Whether you want to believe them is another issue, may simply be that they took the source and built a curve around it.

Happy for any other sources or surveys you care to share.

It sounds like you think scams and user error are not equivalent. Let's say user error losses are 150 bitcoin per day instead. That would suggest scams are 10X losses from user error.

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