Bitcoin Forum

Bitcoins that are lost are lost forever. No it doesn't recover. It is "natural deflation". :P

And this in a system that is naturally deflationary to begin with!  Isn't this a pretty huge systemic problem?

Bitcoins are never lost. just that the key is lost in the ocean somewhere.

One day, some guy might get very very very lucky to find a key to a vault full of bitcoin.

You mean by brute-forcing private key of the wallet owner or what ?

Just randomly generating a key that was lost and held lots of money

Some idiot loses his wallet. My wallet becomes worth more. No problem!  :D

For bonus points, can you tell us how this info is transmitted? :)

How long does it take for your wallet to be worth more?

For bonus points, can you tell us how this info is transmitted? :)

How long does it take for your wallet to be worth more?

It's hard to say how long deflation would take to kick in.  It depends on many variables not easily quantified.  Hell, even though we know, for example, roughly how much larger the USD money supply is today compared to several years ago, its effect on inflation hasn't really been seen.  The economy will have to pick up a lot more in order to create a sufficiently-high-enough increase in demand in order for us to see inflation.

lost coins will eventually be recovered when quantum computers become large enough... as the rest of the network will have already moved all the active coins to stronger addresses well before that time.  ;D

But that may be at least 40 years in the future.

Do you think there will be a period where bitcoin is still used, but big accounts are getting 'sniped' by fast computers? I guess with certain assumptions it might be possible. It's funny to think about the protections people would take, splitting down coins to many addresses to avoid being targeted, maybe moving them around quickly (might not help I guess).

The system at the very least needs a way to liberate lost coins.

Quantum computers will not be able to develop to a threating size without it escaping public knowable.
When it becomes likely that a quantum computer of a attacking size will been developed within the next say - 10 years. A security update will be developed that will make Bitcoin much more difficult to attack.

This update will consist of three parts:
1. Increasing the length of the hashes used for the block chain. (maybe SHA256 => XXX8192)
2. Massively increasing the asymmetrical private/public key length used to secure transactions.
3. Massively increasing the length of a Bitcoin address (the hash of the public part of a key). (maybe the new address will be 1024 + 8 character long)

This security patch will be released well before a quantum computer is developed to a stage that can attack it.  For anyones bitcoins to remain secure, they will need to 'spend' the coins to the new secure addresses.

Since 'lost' coins cannot be 'spent,'  they will on day be collected (and moved to new secure addresses) by somebody who can take the effort to crack the old (insecure) addresses.

Once, quantum computers become common, bitcoin could even use cypto that requires quantum computers to do the calculations, otherwise it would be prohibitory slow.

The system at the very least needs a way to liberate lost coins.

Coins that stay dormant for say 100 years are divided up among all current users? Is something like that possible?

It's certainly conceivable that if at some point the community perceives it to be a problem, then a majority of bitcoin clients/miners would be patched such that coins that have been dormant for that long get added in some fair fashion to the transaction fees being collected by the miners, and open clients will move coins to new addresses randomly every few years to ensure that their coins stay active. But I don't think it's anything that needs to be worried about right now.

What is the difference between lost coins, and coins that people have been saving for a long time?

It's certainly conceivable that if at some point the community perceives it to be a problem, then a majority of bitcoin clients/miners would be patched such that coins that have been dormant for that long get added in some fair fashion to the transaction fees being collected by the miners, and open clients will move coins to new addresses randomly every few years to ensure that their coins stay active. But I don't think it's anything that needs to be worried about right now.

Sounds like a good solution, the key is how to reintroduce the lost coins back into the system in a fair and democratic manner.

The system at the very least needs a way to liberate lost coins.

Thirdly, the U.S. likewise does not care about lost coins.

the money supply needs to be able to react to the demand on money freely.

The U.S. does not care about lost coins because it introduces new coins at a rate sufficient to compensate.

The actual quantity of paper bills and metal coins in circulation is market driven.

If all of us decide to cut up our credit cards, withdraw our savings from the banks in cash, and pay cash for everything, then they just print more bills and mint more coins.

If a month later, we reverse our decision and return a huge mountain of paper and coin to banks for deposit, they burn the bills and melt down the coins or put them aside out of circulation.

Bitcoin needs to decide whether it is an alternative medium of exchange, or an alternative long term store of wealth.

It is way too young and fragile to provide a reliable long term store of wealth; so it necessarily will raise and fall on its suitability as a medium of exchange.

A suitable medium of exchange needs to hold its value relatively stable over the short term.  If the market price of some good or service, specified in some currency unit, rises or falls noticeably, it should mostly be because of something to do with that good or service, not with a recent surplus or shortage of the currency unit, relative to the demand for that currency by the current economic activity.

As FOFOA notes in http://fofoa.blogspot.com/2010/12/windmills-paper-tigers-straw-men-and.html :

One of the essential and defining properties of bitcoin is that it not so react.  After an initial buildup, its supply is permanently capped and in the long run, declining at a gradual and slow rate, regardless of overall economic activity.  This is a property perhaps suitable to a long term store of wealth, not a medium of exchange.

I don't think this works.

Don't use it.

Maybe I am missing something, but what exactly is the point of reintroducing lost coins?

Let's say bitcoin has been widely adopted, the wallet.dat containing Bill Gate's net worth crashed (because his misplaced faith in Windows) and there's no way to recover the file; his foundation need this money to pay 10 million children's medical bill -- in another word, there's catastrophic/extraordinary consequence if the money cannot be recovered -- should there be a mechanism to deal with this kind of situations?

Let's say bitcoin has been widely adopted, the wallet.dat containing Bill Gate's net worth crashed (because his misplaced faith in Windows) and there's no way to recover the file; his foundation need this money to pay 10 million children's medical bill -- in another word, there's catastrophic/extraordinary consequence if the money cannot be recovered -- should there be a mechanism to deal with this kind of situations?

It's called backing up and encrypting it.

sorry but the dumb operator has been backing up the wrong file ... a low probability event,  just wondering what if it really happens.

sorry but the dumb operator has been backing up the wrong file ... a low probability event,  just wondering what if it really happens.

Bill Gates would no longer be in the top ten most rich people list.

that should be fine if it's a result of the owner's fault, under other circumstances, if he's a victim of a crime (theft, sabotage, etc), most people will probably think not having a lost-coin recovery mechanism is a flaw.

that should be fine if it's a result of the owner's fault, under other circumstances, if he's a victim of a crime (theft, sabotage, etc), most people will probably think not having a lost-coin recovery mechanism is a flaw.

that should be fine if it's a result of the owner's fault, under other circumstances, if he's a victim of a crime (theft, sabotage, etc), most people will probably think not having a lost-coin recovery mechanism is a flaw.

what's your coin recovery mechanism when someone breaks into your house and steals your stash of cash and valuables?

the 'stolen bitcoin' recovery mechanism is exactly the same.

Can you imagine going to the police today to report the theft of your wallet.dat  :D :D :D

Can you imagine going to the police today to report the theft of your wallet.dat  :D :D :D

I would imagine that the end results would be the same as when I reported my stolen bicycle as a child.  Too many adults still have a childlike faith in the abilities of the police.

Too many adults still have a childlike faith in the abilities of the police.

If you were really lucky they'd find something to charge you with. Perhaps a burnt out tail light on your car?

Damn, i really hate this as it is very common in my country.
You come to them asking for help, and you get your ass kicked instead.

What? Don't they work for you? If you don't get service that you like stop paying, they aren't going to force you to keep paying, they aren't the criminals.

/sarcasm

What? Don't they work for you?

If you don't get service that you like stop paying, they aren't going to force you to keep paying, they aren't the criminals.
/sarcasm

Backing up your wallet after every transaction is pure madness. Consider small marketplaces or "banks", that might receive several transactions per minute. If their server goes boom, the wallet and the backup might be both gone.

Backing up your wallet after every transaction is pure madness. Consider small marketplaces or "banks", that might receive several transactions per minute. If their server goes boom, the wallet and the backup might be both gone.

Anyway, this is not really a problem, because modern banks all use electronic currencies already, and if their computer systems failed, people would lose money the same way as they would lose bitcoins...

had a back of the envelop calculation: if the loss rate is 10% per annual, it will take 21 years to reach the 1/10 mark, which can be compensated by moving the decimal point one digit to the right. Not too bad indeed.

I seriously doubt that 10% of gold/silver/platinum bullion is lost every year...

Once people understand that bitcoin is a hard money & a commodity, they will protect it with their lives, the same as they do with normal bullion. Therefore, i think that 10% may be probable for the first few years of bitcoin adoption, and when masses understand the power of bitcoin, the loses will fall to 3% or less.
 

I agree.

Another difference is that when gold or silver are 'lost' it simply means "expensive to recover, we'll get it later when it's easier or when it's more valuable". It's pretty rare for gold to be transmogrified into lead or something, it usually just gets lost in the water to be found later.

Trading unpredictable central bank inflation for predictable annual coin loss seems like a good design decision to me.

But I don't think it's anything that needs to be worried about right now.

None, it is mearly psychological.

If a wallet.dat file is destroyed, and transactions orphaned, there is no way to use those coins ever again.

Well, not without a forced address collision, but I'm presuming that we would wish to spend those coins before the sun burns out.

Maybe I am missing something, but what exactly is the point of reintroducing lost coins?

The system does not need to liberate lost coins.

First, there's no solution because there's no way to know they're actually lost. A bank could be holding some coins as collateral for hundreds of years and never touch them.

Secondly, there is no reason to do it. It just doesn't matter whether coins get lost. The price of the coins will naturally rise as the market realizes there are fewer coins that will "budge" to higher demand.

Thirdly, the U.S. likewise does not care about lost coins. If a federal reserve note (dollar bill) get mutilated or destroyed beyond recognition, the government never does anything to redistribute that lost dollar.

Agreed.


*facepalm* Oh for the love of...

Here we go, the classic head burying, if you don't like it get out, intellectually/politically/ethically lazy motto. The real reason real changes to the system are already impossible. Because of entrenched defensive elitists. The same crowd (literally in some cases I have no doubt) that uses telnet to browse the Internet and thinks user friendliness is weakness. The digital crotchety Amish waving slide rules at the kids on their lawn.

I guess Rosa Parks should have just walked to work. Screw trying to fix the system right?

I'm so tired of that whole sycophantic and yet egotistical mentality.


It's called control being an illusion. This is the exact same logic that people who don't wear helmets and seat belts use to disastrous effect. "I'll just be careful, I don't need basic safety precautions." Please.


Right, because it's not necessary to address a basic, widespread, and obvious concern during the infancy of a currency you're trying to get people to adopt. >.>

I'm not going to literally bet my life savings on my ability to out-tech the entire hacker community; regardless of what color their hat is. And neither will anyone else with any rational understanding of reality.


No, because the currency actually exists somewhere in some form. One person losing access to their funds is not that same as the currency being effectively annihilated in all cases as it is under bitcoin. And so long as I have to be have a masters in comp sci (public perception, regardless of how easy you think things actually are) just to buy a loaf of bread I'll avoid the currency.


No they won't for the same reasons everyone here is basically talking smack to those with concerns right now. As the system grows resistance to change and intractability will as well. It will be like trying to convert America to metric. Those with a desire for user friendliness and security will be called newbs and lamers and the techno Luddites will run the show like always seeing to it that we all remain in the digital dark ages to preserve their own profit margin.

And if you don't see that mechanism at work already in virtually every other area of technical endeavor well I just don't think there's help for you.


Can an older wallet file be used to partially recover funds?

I was under the impression that after so many transactions are made older backups were rendered worthless.

If loss of a current wallet file only means loss of funds since last backup, and not loss of all funds then much of my concern is alleviated since I could at the very least print my wallet file once a year and physically secure it.

Not that I would actually do that for the same reason I don't buy gold and bury it, but I like having the option.


I'm sure American blacks in the pre-civil war era would disagree. :P :)

But seriously. The point isn't to evade damage to society, but to address legitimate concerns with the system to foster adoption.

I'm not using the currency till they are addressed. My labor has the same value regardless so I can afford to wait. I don't feel like dedicating a computer to the creation of new coins. It's just a currency and I'll use whatever one I judge is best until things change. The question is, how many other people will judge bitcoin too risky, and will that number be significant enough to A. force changes to the system. B. Damage the perceived value of bitcoin (and other cryptocurrency schemes) sufficiently to sink it/them.

21 million for an entire global economy is ludicrously low to begin with when you think long term and large scale. Imagine trying to operate in an economy where a single penny will buy you an air craft carrier. You'd need the intellectual equivalent of a clean room and an electron microscope just to buy a pack of gum.

Complete nonsense. The supply doesn't matter when you can divide forever. Even 1 BTC is enough to run the whole economy. It's just a fucking integer, for Eris' sake.

Also, please reframe (sic) from making such a gigantic post.