According to the latest Coin Metrics report, more than 1.6 million bitcoins have been lost forever, either through duplicate transactions, unclaimed rewards, or thefts. Despite the report offering one of the most conservative estimates as to how many coins are lost, it still showed that Bitcoin is getting scarcer with each passing day.

Calculating Bitcoin’s circulating supply much harder than it looks

While Bitcoin’s whitepaper only touches on the topic of supply, one of its biggest value propositions is its scarcity. With a supply capped at 21 million coins that halves every 4 years, Bitcoin doesn’t let anyone forget its scarcity.

A report from Coin Metrics showed that the world’s largest cryptocurrency might be even more limited than we think it is. The report, which set out to calculate Bitcoin’s circulating supply, found that it was significantly smaller than it ought to be.

This time last month, the network celebrated a major milestone as block 600,000 was mined, putting Bitcoin’s circulating supply at around 18 million BTC.

However, further inspection showed that the actual supply was much lower than that.

When added together, lost coins amounted to more than 1.6 million, pushing Bitcoin’s actual supply down to just over 16.4 million BTC.

Getting to that number wasn’t easy, as the report had to divide the lost bitcoins into two groups—provably lost and probably lost.

World’s largest cryptocurrency scarcer than ever

Coin Metric’s research found that the provably lost coins were the genesis coins, duplicate transactions, unclaimed mining rewards, and OP_return outputs.

Bitcoin’s first block, called the genesis block, contains a transaction with a 50 BTC output which wasn’t included in Bitcoin’s ledger, while the only two instances of duplicate transactions on the network resulted in 100 BTC being removed from the blockchain. Just over 3 BTC were embedded into the blockchain as messages, effectively making them unspendable forever.

Before OP_RETURN outputs were standardized, a significant amount of coins were sent to bogus addresses to burn them. Three of these bogus addresses currently account for over 2200 BTC which aren’t lost forever but are unlikely to ever be recovered.

Another category of coins that is most likely lost forever are “zombie coins.” According to Coin Metrics, those are the coins that have been inactive for years. But, unlike some estimates that put their number close to 4 million, the report only considered the 1.5 million BTC that haven’t been touched since July 2010.

The final category of coins considered lost by the report are known stolen coins. As the nature of Bitcoin’s ledger makes it easy to trace these coins, it’s highly unlikely they will ever be inserted back into circulation.

Around 200,000 BTC were lost in two thefts alone—80,000 BTC were stolen from MtGox in 2011, while just under 120,000 went missing from Bitfinex in 2016.

While there are only 182 provably lost bitcoins, the report assumes that at least 1.5 million are most likely lost forever.

That means that Bitcoin’s actual circulating supply is much lower than it should be according to the number of blocks.

With a liquid supply or around 16.3 million and less than 3 million left to mine, Bitcoin is becoming scarcer with each passing day.