In block 150,951 there are 23 transactions in which there are a total of 2609.363043 Bitcoins lost.

As the blockchain is a public ledger we can freely inspect what coins are unspendable aka lost. This is exactly what https://bitcoin-supply.com/ does. Burning coins on purpose is nothing new at all, but has regained popularity in very recent times as people started minting tokens on Bitcoin, but not all burned coins are burned on purpose, some are obviously done via human error.

In the grand scheme of things, it does not really matter, burned coins are burned coins and at the end of the day it makes the leftover coins more valuable.

How Bitcoin Script works - very high level

In this post we will focus on the biggest loss caused by human error, but before this lets explore how Bitcoin Transactions work.

When you give someone an address you are actually giving them a box, which ONLY you have a key that can unlock it. This is guaranteed by the fact that only the entity that has the private key corresponding to a public key can provide a signature to unlock the box.

These locks are called Bitcoin Scripts. They are small programs that sit on top of each Bitcoin, when you move Bitcoins you run these programs. You first run the program, and if it terminates with success, then the Bitcoins moves. The good part is that you can add very various conditions here.

Multi-sig is an example of such conditions.

But it is up to you to make sure you set the right conditions. One way to make an error would be to add someone's else address. Another way is to create some conditions that can never be fulfilled, and yes that is a possibility and it is allowed.

Bitcoin wallets/clients try to limit human error as much as possible, and Bitcoin addresses were designed with this scope in mind. Bitcoin addresses have a checksum at the end to avoid sending Bitcoin to the wrong address. This safety check is done at the wallet level. There are no such checks in the script!

The last step in obtaining an address is to hash it with RIPEMD160, this has the effect of shortening the address. The address is the public key hashed 2 times(SHA256 and then RIPEMD160) and with a checksum at the end.

In the script

It so happens that when you write these programs you can set the condition something like: If the public key that after I hash it with RIPEMD160 does this, then thing can happen. In case you were wondering what's the deal with RIPEMD160(read with Seinfeld voice), in the picture OP_HASH160

Now of course this Bitcoin Scripting Language it's in incredibly convoluted(quite frankly sucks, but we're stuck with it), and that's not enough, you also have to specify the amount of data you want to use.. That's what OP_PUSHBYTES_20 does. This says Hey, take 20 bytes (= 160 bits, the output of the RIPEMP160) when trying to check for the signature.

All of this is seen in the "GOOD SCRIPT" section of the photo.

Now the BAD SCRIPT

When we compare the two one thing stands out, there is no OP_PUSHBYTES_20 and instead there is an OP_0 and this is what makes the coins forever unspentable. The 2nd script pretty much say: These Bitcoins can be moved by the public key that when hashed with RIPE160 has a 1-byte-output of 0. But we know that's impossible, as the output of the RIPEMD160 is always 20 bytes, so the condition can never be meet, so coins are locke/lost for evaaaaar.

And in case is not clear, all the coins that are lost, all have the exact same bad script.

Who did it?

The Transactions in question were made by Mark Karpeles aka MagicalTux, the CEO of MtGox. Yes, this was MtGox money, and at the time of the incident, it represented 1 week of income, as Mark said himself. At the time the 2,609 Bitcoins were worth $10,957, today they are worth $120,200,000.

Hope you liked this little story :D

The TX IDs in 1st pic

In case you want to check the TXs yourself, here they are in a copy-paste format.

Amount	TX hash
24.31	111291fcf8ab84803d42ec59cb4eaceadd661185242a1e8f4b7e49b79ecbe5f3
100	81f591582b436c5b129f347fe7e681afd6811417973c4a4f83b18e92a9d130fd
37	ddddf9f04b4c1d4e1185cacf5cf302f3d11dee5d74f71721d741fbb507062e9e
98.48055	305fbc2ec7f7f2bc5a21d2dfb01a5fc52ab5d064a7278e2ecbab0d2a27b8c392
39.81	f0137a6b31947cf7ab367ae23942a263272c41f36252fcd3460ee8b6e94a84c1
65	633acf266c913523ab5ed9fcc4632bae18d2a7efc1744fd43dd669e5f2869ce5
100	5bd88ab32b50e4a691dcfd1fff9396f512e003d7275bb5c1b816ab071beca5ba
21	64c01fedd5cf6d306ca18d85e842f068e19488126c411741e089be8f4052df09
35.784	3be0ac3dc1c3b7fa7fbe34f4678037ed733a14e801abe6d3da42bc643a651401
100	9edab6e7fadf1d6006315ff9394c08a7bf42e19cf61502200a1f73994f8da94b
100	835d4dcc52e160c23173658de0b747082f1937d1184e8e1838e9394bc62c0392
143.62	aebe39a99114f1b46fc5a67289545e54cbfec92d08fc8ffc92dc9df4a15ea05a
367.7584932	aa62bdd690de061a6fbbd88420f7a7aa574ba86da4fe82edc27e2263f8743988
100	6a86e6a5e8d5f9e9492114dafe5056c5618222f5042408ad867d3c1888855a31
35.78	7ad47a19b201ce052f98161de1b1457bacaca2e698f542e196d4c7f8f45899ab
100	0ca7f7299dc8d87c26c82badf9a303049098af050698c694fbec35c4b08fc3df
100	3ab5f53978850413a273920bfc86f4278d9c418272accddade736990d60bdd53
497	03acfae47d1e0b7674f1193237099d1553d3d8a93ecc85c18c4bec37544fe386
100	15ad0894ab42a46eb04108fb8bd66786566a74356d2103f077710733e0516c3a
200	2d00ef4895f20904d7d4c0bada17a8e9d47d6c049cd2e5002f8914bfa7f1d27b
98	6d39eeb2ae7f9d42b0569cf1009de4c9f031450873bf2ec84ce795837482e7a6
100	07d33c8c74e945c50e45d3eaf4add7553534154503a478cf6d48e1c617b3f9f3
45.82	6d5088c138e2fbf4ea7a8c2cb1b57a76c4b0a5fab5f4c188696aad807a5ba6d8

31 sats \ 1 reply \ @orangesurf 12 Jan

Very interesting post, thank you for taking the time

0 sats \ 0 replies \ @raw_avocado OP 12 Jan

20 sats \ 0 replies \ @sirjanstha00 12 Jan

Nice post it's interesting about knowing something

10 sats \ 1 reply \ @DiedOnTitan 12 Jan

I do like the story, thanks for sharing. The ledger is open and transparent and immutable. A pretty interesting area of research. I am curious what other historical details of interest it holds. As just one example, a researcher could compute the total volume of Silk Road transactions ever done. Or inflows and outflows to the major exchanges like MtGox, Binance, Coinbase and now River. This is probably exactly the kind of work Chainalysis does, among other things...

There has been research re both things you mentioned IIRC, but yeah I'm sure all Chainalytics companies also have this information.

10 sats \ 1 reply \ @bilthon 12 Jan

It's still not clear to me what he was trying to do. He mentions something about limiting the number of inputs in a tx, but that has nothing to do with modifying the script

Yeah, I could not figure that out myself. I spent like 5 hours yesterday trying to find some archive of #MtGox, but nowhere to be found on the internet.

Also it's not just that there OP_PUSHBYTES_20 is not there, bu also a pubkey is missing.