Loss is hard.

And the bigger the loss, the more it hurts.

So, imagine how we felt when we learned that millions of Bitcoin have been lost forever.

Is there any way to recover it? And what does this mean for the crypto community as a whole?

More in the deep dive.

Correction ✔

Well, we made a mistake, folks.

In yesterday’s newsletter, we misplaced a decimal point and incorrectly published that HBAR hit $.057 at its peak. That should have read as $.57.

If our fourth grade math teacher knew about that mistake, he’d snap his chalk in half.

But in all seriousness, we want to bring you crypto news as honest, up to date, and error-free as possible and yesterday we failed you.

We’re humans, just like you. We’re fallible and we make mistakes. That’s why pencils have erasers and the Titanic had lifeboats.

We promise to do better in the future.

Humbly yours,

The Coffee & Crypto Team

Since you know so much about us, we thought it was time to learn a little bit about you. Tell us about your crypto experience! 👇

Espresso Shots

☕️ Do-Kwon’s Bail Revoked

Terra Labs founder and international fugitive, Do-Kwon, is headed to jail in Montenegro… again.

Do-Kwon finds himself back behind bars after his bail was revoked when the high court of Montenegro overturned their prior decision to grant bail to both Do-Kwon and his co-founder, Han Chong-Joon, Terra’s former Chief Financial Officer.

Both men face forgery charges in Montenegro for allegedly using fraudulent Belgian and Costa Rican passports which Do-Kwon and Chong-Joon continue, insanely, to insist are real.

Rather than house-arrest, they will remain behind bars while the Montenegrin courts decide what to do with them.

In addition to the forgery charges, Do-Kwon faces fraud and conspiracy charges in both the U.S. and South Korea as well as likely extradition to one of the two countries.

Montenegrin authorities first doubted the veracity of Do-Kwon’s passport when they noticed it listed his birthplace as “Hawaii” and his legal name as “McLovin.”

☕️ Ledger Recovery both Real and Delayed

Ledger’s been through somewhat of a PR nightmare as rumors of a backdoor in their wallets was widely circulated through the crypto community.

It turns out that backdoor is very much real, though it was initially meant to be a feature, not a bug.

Through a tool called Ledger Recover, the company intended to break up users’ recovery phrases into pieces which could be sent to three different holders and then reassembled should a user need help.

Despite the well meaning concept, most crypto users don’t want any piece of their data sent anywhere, and that’s always been the promise of a cold wallet.

Keeping your own keys secure and offline is the best way to protect your crypto, this recovery tool feels a lot like a backdoor which betrays that promise.

Of course, in the wake of this PR crisis, it was initially unclear if this bug (or tool) existed at all. We finally have our answer.

Ledger Recover was very much in development, but the uproar it has caused has resulted in the program being delayed. Ledger’s CEO is now promising to opensource, “as much of the Ledger operating system as possible.”

The outrage around Ledger Recover has prompted a serious discussion in crypto about the dissonance between the ideals of decentralization and the real limitations of the existing tech.

It also spawned a video of someone destroying a Ledger Wallet with a hammer and then melting it with a blow torch.

Yet somehow the video of our writing staff eating three Ledger Wallets in under five minutes still only has sixteen views.

☕️ DeSantis Announces Presidential Bid

Republican loose cannon and CBDC-abolitionist, Ron DeSantis, announced his presidential bid today.

DeSantis was the first presidential candidate in history to announce his bid live on Twitter. He also broke the news in a Twitter Space with Twitter owner Elon Musk, who has yet to formally endorse DeSantis.

Naturally, the livestream crashed several times and got started nearly 20 minutes late. Elon’s Twitter engineers are still working out the kinks.

Now, this is a crypto newsletter, not a political one, but as we’ve learned, crypto naturally flows in and around politics.

So as we move into the next election cycle, we’re going to endeavor to cover all the candidates and their stances on crypto.

We just didn’t want to surprise you. Okay, now, back to DeSantis. So where does DeSantis stand on crypto? Well, he actually told us in his Twitter announcement.

"I think people should be able to do bitcoin," DeSantis said to an audience of more than 250,000. "As president, we'll protect the ability to do things like bitcoin."

In addition to saying he’s cool with the kids “doing bitcoin” he also announced his intention to combat “the woke virus.”

We’re not sure how DeSantis plans to fight the woke virus, but we’re pretty sure it won’t be with vaccines.

Spilling the Beans

Billions in Bitcoin Lost Forever 🏴‍☠️ ⚓️

Atlantis. The Library of Alexandria. Amelia’s Earhart’s biplane and goggle-wearing skeleton.

Nothing captivates our minds like buried treasure, artifacts lost to the pages of time that historians can endlessly theorize about and archaeologists can drool over.

But there’s been another great, societal loss, and this one hasn’t even been covered by the Explorer’s Guild.

And that loss is a veritable treasure trove of Bitcoin. So exactly how much Bitcoin has been lost? According to one estimate, 6 million Bitcoin or roughly $157 billion.

And how could we lose that much Bitcoin?

It’s not a simple case of a poorly written will or somebody’s cold wallet falling down a storm drain.

It’s more like thousands of cold wallets falling down storm drains, being misplaced or destroyed.

It’s the result of handwritten recovery phrases being passed down with handwriting so bad that a dysgraphia diagnosis was clearly overlooked in childhood.

Yes, since its advent, millions of Bitcoin have been lost, likely never to be recovered.

This estimate comes from Timothy Peterson, a manager and researcher at Cane Island Alternative Advisors.

Peterson released data back in 2020 that indicated that 4 million Bitcoin had already been lost through human error, accounting, and misfortune.

By 2023, Peterson estimates that number has jumped to six million.

As we’ve mentioned many times in this newsletter, one of the primary features of Bitcoin is that it’s finite. There can only ever be 21 million Bitcoin in existence.

Given that logic, by Peterson’s rubric, 28.5% of Bitcoin is already lost forever.

And unlike the American dollar, there isn’t the quick, ultimately harmful fix of printing more.

One of the essential characteristics that makes Bitcoin Bitcoin, is that you can’t just turn the money printer back on.

So, what does that loss mean for Bitcoin’s economic health?

Well, in times of crisis we like to turn to the wise words of Bitcoin’s pseudonymous founder, Satoshi Nakomoto, who once wrote:

“Lost coins only make everyone else’s coins worth slightly more. Think of it as a donation to everyone.”

If you’re holding Bitcoin, you’re holding a rare, valuable commodity.

And like any commodity, whether that be gold, diamonds, or a communicative romantic partner, the more rare something is, the more valuable it becomes.

Actually, the less Bitcoin there is in circulation, the better it is for the price of Bitcoin.

Unlike some other cryptocurrencies, Bitcoin doesn’t have any burn cycles. Bitcoin isn’t ever destroyed, in fact, it really can’t be destroyed, it can only be hopelessly misplaced.

And in this case, that’s actually a good thing. It’s part of Bitcoin’s natural economic cycle, one that’s still being established in a relatively young currency.

If you’re already holding Bitcoin, it’s only getting more valuable as more is lost. If you’re not, now might be a good time to consider getting some.

Because in this case, Bitcoin’s loss is all of our gain.

Meme of the Day

Straight to jail!

Crypto 101

DAG: This stands for “Directed Acyclic Graph” and you’re going to see this acronym thrown around a lot in the more advanced realms of crypto.

A “DAG” functions much like a blockchain in that it’s a network of independent nodes, working together in concert to verify transactions.

DAGs are typically considered faster and more secure than blockchains and are an emerging, worthy rival to the blockchain tech that traditional crypto, like Bitcoin, is built on.

The Last Sip

Since its creation in 2009, six million Bitcoin has been lost. Here are some things that we’ve lost since 2009.

• My credit card, twenty-three times, at that one karaoke bar down the street from the office.

• Amy Winehouse and Tina Turner

• The respect and confidence of our fathers.

Stay Caffeinated,

Coffee & Crypto Team

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DISCLAIMER: None of this is financial advice. This newsletter is strictly educational and is not investment advice or a solicitation to buy or sell any assets or to make any financial decisions. Please be careful and do your own research.