Bitcoin Forum

Having used the search facility a bit, all the discussion on lost coins seems to be focused on its only a bit, and it will make the rest more valuable so its not an issue.  However, I think there is a problem with this thinking.

All physical currencies have a percentage that are lost.  Its generally around 2-3% per year, and mostly effects the smaller denominations.

If we have a situation where we know there will only be 21 million coins, eventually, all the coins will become lost.

As things were, when you had so many coins that thousands are needed to buy a pizza, then that's when even the biggest denominations are worthless enough to lose.  You also have the issue with losing wallets and that whole learning cycle that early adoptors suffered.

As the mainstream start using the coins, they too will lose a few coins as they get used to the security needed to not lose this new currency.

Assuming a 2% lose per annum, within 20 years, half of the total number of coins will have been lost.

Does anyone else see this as a problem, or is the idea that because the coins can be split down, there is still enough currency to be used by everyone on the internet - for ever?

a 2% loss per year does not lead to a 40% loss in 20 years.

"all the coins will become lost" : no, not with a flat x% rate of loss per year. For all the coins to become lost, you need a 100% loss the last year.

His maths might be off but it's true

We start with 21 M (assuming no coins are lost until all coins have been mined)

Year 1 : 21M
Year 2: 20.5M
Year 3: 20.1M
Year 4: 19.8M

This could in theory continue until we are down to 1 Bitcoin and everyone is trading in 0.0000000001s for a new Ferrari, its true though the loss of coins with no coins being added is a issue, even if only 0.5 BTC were added a year it would still help to combat the loss of coins..

Although, coins are not actually lost they are just inaccessible ie the owner has forgotten his password, so I assume there will be a big business in tracking down lost BTC and recovering them in the future especially for the wallets of innovators who might have hundreds of coins stashed away and at $40 USD for 1 BTC I wouldn't mind finding one of these accounts even now

The more valuable the coins are the less loss there will be.

It is said that people can't think exponentially, but they also can't think asymptotically.

In 2013, John Doe I. may lose his 400 USD or 10 BTC wallet.
In 2014, John Doe II. may lose his 400 USD or 1 BTC wallet.
In 2015, John Doe III. may lose his 400 USD or 0.1 BTC wallet.

A loss of 2% per year gives a half-life of about 36 years,  ie: that's how long it takes to loose 50%.
So, say we've already lost 1,000,000 due to early folly so far but from now on only 2% lost then:
In about 36 years you'll have about 10,000,000 left (this not really that accurate-- because I've based it on the max 21000000 being mined already now when really the next approx~10,000,000 will be mined over this period-- but most of them are mined in the next 8 years so it not so bad)
in about 72 years you'll have about 5,000,000 left
~108yr -> 2,500,000
~140yr -> 1,250,000
~170yr -> 500,000 or so.

500,000 is plenty enough to still be able to buy small cheap items.

(as-an-aside: Personally I believe that we should allow miners to recover lost coins,  but for reasons other than coin base skrinkage.)

This pretty much covers the problem in its entirety. The average user stands to lose less and less every year. However, I think that the security of Bitcoin holdings will increase and people will figure out how to handle inheritance, etc etc. So I don't believe there will be a fixed percentage of lost coins, it will likely be a smaller percentage in the future. When and if Bitcoin hits mainstream, there could be a temporary spike in lost coins due to negligent use.

It's already increased. Multiple backups, online wallets (themselves backed up). I don't think we're going to see anywhere near a loss rate of 2% yearly. More like .2%.

How do you distinguish a lost coin from a saved coin?

I knew someone would ask this.  

Firstly, let me state clearly that don't want to argue on this thread about this-- cause that's not what the thread is about. So, I'll give just this one reply.

Ok, If you allow the miners to sweep up the untouched coins then the ones that remain untouched are most likely lost (yes, before you mention it: I know that a very small percent of the time it maybe that they're not lost its just that the owner can't make any transaction-- say if the owner is imprisoned or in a coma, etc-- but this would be rare. To them I'd say it's just tough luck)
Personally I'd suggest a schedule where you can leave them untouched for a year or two, but then after that the miners can periodically take a percentage of the original amount so that it takes say 5-10years before they disappear completely.

The reason why I feel miners should be allowed to collect dead coin is two fold:
1) I believe the transaction fee model is fundamentally flawed due to the fact that you can trade bitcoin off-chain.  I've just been arguing this on a another thread-- no-one else seems to believe me though.  (This flaw will take a few decades from now to reveal itself and I'll be a very old man by then so in reality I don't really care about it.)

2) The second reason is an argument from a sense of equity.  It's to do with the question of who should pay to maintain network security.  Take me for example, almost 2yrs ago now I bought approx. 2500 coin as an investment and have left it sit on the network accumulating dust.  I've never made any transactions since so haven't paid any fees to the miners-- however it is the miners that are protecting my coin.  Isn't it fairer if I was forced to contribute a bit to the cost of protecting my investment?  If miner's were allowed to collect dead coin then I'd be forced either to pay the miners by the fee incurred in making a transaction from one of my addresses to to another in order to revive my coin, or pay them direct by dead-coin loss.

I think it's fine to discuss this here because this is an attempt to address the OP's claim that lost coins are a flaw that needs addressing.  But, again, how do you distinguished between lost coins and coins that I've saved, say, in offline, split-key, wallets?  You never answered that.

You said:


Wait, what?  Again, the issue is that you want to take coins from addresses that haven't had activity at all or for a very long time.  The question can be rephrased as, "How do you know that untouched coins are lost, and can thus be taken without depriving anyone of their digital property?".  Your answer is, "Take (sweep) the untouched coins...".  But if the question is about how we can know when we're justified in taking them, the answer can't just be, "well, take them!".  Do you see how you've failed to answer the question?

Having issued that criticism, I think that there is some sense to your reasons for wanting to collect fees on dormant coins, but you can argue that case without saying anything about lost coins; and I think you're better off not trying to say anything about lost coins because there really is no way to tell from the blockchain alone what is lost and what is saved.

I don't know who you are. I don't know what you want. If you are looking for a get-rich-quick-scheme, I can tell you I don't have one. But what I do have is a very particular set of coins; coins I have acquired over a very long trolling career. Coins that have been untouched by people like you. If you let my coins go now, that'll be the end of it. I will not look for you, I will not pursue you. But if you don't,

http://i.qkme.me/3p5dvn.jpg

I have a feeling nobody is seeing the scale involved here.

How many people are currently using bitcoin? lets be generous, and say 1 million.  If we are looking to have just the rich countries of the world using bitcoin, we are talking 1 billion people.  If each one was to lose, 0.01 btc at some time over their 1st year of usage, that would amount to 10 million bitcoins.  I've lost real money in the past - everyone does - but with coins, I don't really care.  It has very little value to me, and the government make sure there is enough in circulation by producing more!

The point is that its not the bit coins people will be loosing, but the decimals as they lose wallets, delete files and generally act as proper ignorant users - anyone who has done any IT support will be aware of how stupid some user errors can be.

With a billion people using bitcoins, we are also going to be seeing a lot of transactions - possibly 100k per second or more, meaning that using the figures from today to extrapolate on future behaviour isn't the best way of preparing for this possibility.

Is there some scope to deal with this issue built into the plan?

It seems that the point he was making is that if it is known by all users that any coins that aren't spent/moved within some official timeframe (say 2 years) will automatically be swept (or have a significant fee), then any rational actor will devise a coin storage plan that includes moving the coins on a regular basis (within 2 years).  Since any rational actor will move their coins regularly to avoid the penalty, any that are not moved can be considered lost.

So everyone will have coin storage plans that will automatically (we know people's memories can't be trusted) move the coins.

Here's the keyword: Automatically. The coins get moved automatically. So there's nothing there to sweep because -again- all the coins get moved automatically. There's no reason to sweep because there's nothing to sweep.

So the logical course of action is: Keep systems simple. Dont' sweep.

We only need 1 Satoshi to keep Bitcoin going, we can always add more decimal places and use new units, such as pricing things in μBTC.

Lost coins are not an issue at all.

It really isn't a problem for atleast a few of centuries take a look at the figures I gave above.

At some point you could always change the client/protocol to allow 1 Satoshi to be broken up, e.g. into a trillion pieces. This would be a relatively minor change I don't think anybody would have any objections.

If a satoshi is split into a trillion pieces, then the lost coins won't matter at all.

I also think that a method for accepting infinite divisibility should be incorporated into the Bitcoin protocol now.

Any user should be allowed to take their bitcoin and turn it into a trillion trillion smaller parts, this type of flexibility will help give bitcoin the ability to be everlasting.

Ok, so I will make a comment.  

Yes, this is exactly what I meant.  I'm glad there's atleast there is someone here who has 1/2 a brain, stick around Heaven knows that bitcoin needs you.

Ok, I made the mistake that I'm taking with normal people, not bitcoiners.  I'll try to give a little analogy just incase people here don't understand what Danny has just said.  If you see a mouse in your kitchen and you pick up your cat and rub its nose in the mouse's face and the mouse doesn't run away, then chances are that the mouse is dead.  Do you get it now?   In, general you can assume that people take actions try to avoid an obvious loss-- unless of course that person is a bitcoiner, because bitcoiners will flap there hands about and say that there is no loss coming it a government trick or or that neither sashotshi nor anyof the other bitcoin gods have told me there is a loss coming so I don't believe there is or .....

If you moved the coins autmatically then guess what---  you'd be paying a FEE.....  The whole point of having the sweep in the first place.  Why are the people so thick here..??????

There was a thread on here a while ago, I hope somebody can find it because my Google-fu has failed me, where somebody tried to estimate the amount of lost coins.

He used the blockchain to make a list of addresses where the coins had not moved in 3 years, the entire thread was full of people posting in saying that they're address was on the list and the coins were not gone but were in cold storage.

Its too late to start changing the rules now, if something like this was in the protocol from the start it would be OK, but its not OK to introduce it now as there are plenty of people out there who have stacks of BTC in cold storage but don't actually use them and are saving them for 10-20 years down the line where they may be worth much more, how are they going to know that their BTC is going to expire if they don't dig up their garden and move the BTC on the paper wallet every 2 years.

So you want property taxes? That'll go over well here.

You obviously haven't seen this then:

http://www.youtube.com/watch?v=at_UYBcnmJ4

That might have been what you wanted to say, but it's not what you said.  Again, I see the motivation for imposing this kind of system, and my main criticism right now is that you can make your case without trying tackle the issue of whether coins are "lost" or not.  Essentially, you want to impose an additional fee - one for storage.

You just lost me any confidence I had in bitcoin.

If I have to jingle my money every few years or lose it, I am going to eventually lose it - because that is what happens to every other deal I have had in the past. Insurance deals where you get your money back if you claim within a timeframe, vouchers that have time limits on them just before I decide to use them - they all suck and bitcoin will join the club if it goes down this route.

In theory its a perfectly good idea, but in the real world that the rest of us live in, it fails big time.  

While I like the idea of the splitting the coin even further down, it does negate the limited bitcoin advantage.

I'm starting to think that the only part of bitcoin that is going to go mainstream is the core idea of the chainblock and elements of the mining.  If there is a way to invest in that, its time to start speculating!

PLEASE NOTE : I'm not replying to any more questions relating to sweeping dead coins and my reasoning for it.

PLEASE-- get back on topic.  I'm sorry to the original poster for mentioning fees and diverting your topic.

bye,bye that's the last from me on this thread.

more hysterical postings about lost coins.

i truly feel this is more attempts at some 'robin hood' type of people tryng to create fud to then use as justification to steal other peoples long term investment.

the 2% loss per year is of small denominations of FIAT.

trust me people owning bars of gold or expensive artwork typically don't just lose it.

don't worry about other peoples coins just look after your own.

http://mises.org/money.asp

You could also use one or more altcoins to make change.

It's not that you haven't explained it right.  It's that there's a lot of thinking on this aspect of money, in general, that you aren't aware of.

Please take a look at this book:
http://mises.org/money.asp

It's tough to really lose your bitcoins. Even if your hard drive dies (and there is no backup), you have a pretty decent chance of recovering your wallet file, assuming that there are enough bitcoins to go through the trouble. If you somehow forget your password, it might be worth it to put years of brute force cracking into it if you think that might solve it. If a person dies, his family might try to recover the bitcoins from his hard drive if they know that they are there.

There is a far simpler reason why confiscating coins not used "soon enough" will never happen.  Users would have to agree to the theft.  That isn't going to happen.  Getting any breaking change to the protocol is tough.  Even non controversial changes take a lot of time, effort, testing, and lobbying.  Getting something like a "you use or your lose" policy implemented is essentially impossible.

This idea comes up like clockwork at least once a month but the end result is it doesn't matter how "good" this idea is it will never happen.

From a ethical standpoint changing the rules AFTER people have invested in bitcoin is simply dishonest.  It is a bait and switch.

If you feel so strongly that this is the deathblow to bitcoin the fork the project implement remining rules into the protocol and launch "eternalcoin" or whatever you want to call it.  If Bitcoin is truly flawed then in time the market will dump bitcoin in favor of eternalcoin.  Personally I have no problems with a coin which does this from the begining (or implements demurage like freicoin) but to change the rules after the fact is just plain theft.  Period.

Nelson Mandela was released from prison after 18 years.

How long would be enough? There is no answer, really.

And there is no need. Bitcoins are divisible.

That's really all you need.

The 21,000,000 limit only serves the distribution model that gives higher rewards for earlier adopters. It's completely arbitrary in the face of infinite divisibility.

And again, any "involuntary loss" of coins will never be accepted by the network.

We will reach the point where a small nation could potentially have an annual GDP of 10-100 BTC.

21 million will be plenty. Half of that will be plenty.

"Lost bitcoins - an even more complete non-issue than concluded in the previous 21 million threads on this topic?"

It's a digital currency. The "limit" is a concept. You can nudge the decimal point along indefinitely.

If we only have 1 BTC left. That BTC represents the current ~ 21 mill 'limit', and can be divided infinitely.

You already paid the "storage" fee when you either mined them or the sender of them paid the transaction fee, those coins are recorded in the blockchain and as we are dealing with digital numbers there really isnt and "storage" costs, your record of 2500 bitcoins is somewhere nearer the begining of the blockchain, it has already been bought and paid for, if your feeling guilty for having so many then maybe run some mining rigs with your proceeds that do not take preference of higher fee paying transactions, or invest in an ethical bitcoin start-up. The fact is because you were an early adopter you benifited so you have helped me and us later adopters to be able to use bitcoin now, it is adopters now that have to download and sycronise the growing blockchain containing your transaction but this not an issue, its a part of the process.

So what I'm trying to say is that if the whole blockchain from every computer were to be halted and put in cold storage on a HDD or flash drive somewhere there really wouldnt be any fee for your wealth, the real world cost in electricity and data costs are due to the continuing use and transactions in Bitcoin, so the people using these processes are paying for it, its not immoral.

For real. I think I'm going to use GMAA (go make an altcoin) as the new GTFO.

So you'd say tough luck to them but to people irresponsible enough to lose their coins, zomg we need to reclaim them!  GTFO GMAA and don't touch my emergency savings account.  If only 1 bitcoin is left, you know what will happen, everybody will agree to add more decimal places, so nobody loses any value, but amounts small enough to be used can be used.  THAT's how loss of coins gets solved.  Ain't nobody gonna ever agree to add into the protocol a way for them to lose their own coins without their consent.  Fuck.. that... shit.

+1

Simple and real !  no need to care about lost coin !

Next Topic ...

Of course no one is thinking the obvious......

After 100 years the private keys for the old wallets will be broken anyway, just due to enhancements in crypto technology.
So ultimately the coins will re-enter the system.

No way to know that.  It is certainly a possibility, but it is just as possible that ECDSA, SHA-256, and RIPEMD-160 will remain completely secure for far more than 100 years.

yep cannot into 1/x = y

the problem with that is... if someone then discovers 1 bitcoin somewhere, they'd become the richest person in the world.

There would be an Indiana Jones of Bitcoin ;D

If you actually read and understood what I've written on this thread then you would know that I DON'T consider lost coins an issue.  In fact I even demonstrated this by calculating for you the number of coins remaining after 170 years of loss at 2%-- there's plenty left at this stage.  What you've quoted above I wrote in response to something else, not lost coins!

In response to what you've written: It would be very difficult to add more decimal places to the coins in the bitcoin network itself cause this requires a hard fork.  However to allow trading in sub-satoshi unit is trivial to do in other ways.  For example, a bitcoin bank could just staring minting electronic tokens or even real physical tokens (coins/notes) which they claim are backed by bitcoin-- eg: they print 1000 X milli-satoshi tokens every real bitcoin they have.  For course, they could even print 2000 x milli-satoshi tokens for every bitcoin they have and hope that not every one tries the redeem them at once (ie: they recreate fractional banking). 

(I'm expecting you people here to start trashing me at this point-- but the argument still stands and it is impossible to stop a such development if bitcoin heads in that direction. 
By-the-way: I not saying that you should do this or that it will happen, just that it can happen-- but I'm not hopeful that you'll understand the difference.  I've witnessed enough on these forum-boards to realise that it doesn't matter what you say, when people here read something that they don't like or can't comprehend, as a knee-jerk reaction they assume that you support it and must therefore by the part of some-great conspiracy to destroy bitcoin.)

Just a quick question of forum etiquette - if someone is writing total nonsense, is the tradition to let them get on with it, or do you point it out?

;)

Could someone crunch the numbers  ;D how many satoshi's each would every person on earth be able to have?

Before or after the war?

If we assume that all lost coins are eventually somehow recovered, all future coins have been mined, the population doesn't increase above the current level, and all coins are shared equally, that is some pretty simple and straight forward math (if you don't like those assumptions, what numbers would you prefer?).

Total Bitcoins:20999999.97690000 = 2,099,999,997,690,000 Satoshis
Total current world population = 7,070,409,764

2,099,999,997,690,000 divided by 7,070,409,764 = 297,012 Satoshi per person.

Nice figures, but it does highlight that many of the claims that keep the bitcoin potential alive are just theory.

For instance, I have about 4 wallets all ready to store my bitcoins in, but two of them have less than .05 btc in them.  I might forget the details of the wallet within the next few years, and not feel too guilty about it, because currently, its not worth more to me than the coins down the back of the sofa.

Most of the people on this forum are the sort of people who don't do things like that, and don't understand why someone would do something so irrational.  However, the majority of people are very irrational and this is why I brought up the question in the first place.

What would happen if there wasn't a limit on the number of coins created?

My gut feeling is that anyone reading this with more than a handful of bitcoins is going to get very angry as they see their potential pension pot disappear in a cloud of zeros and ones! ;)

Any feedback?

A constant coin creation rate can be expected to eventually reach an equilibrium of sorts with the rate of coin loss and thus a ready steady total amount of active (not-lost) coin.  I'm guessing you've already had an inkling along these lines.  (One can reasonably expect this to be the case as long as the mining rate wasn't ridiculously high causing hyperinflation and completely destroying bitcoin)

As for people getting angry for even mentioning, yep, I'd bet on it.

This is assuming that bitcoin has reached saturation peneration of the population and that the popularity of bitcoin remains constant.  Also other factors such as population growth would effect it, but that's on larger time scales (years->decade) so quater to quater it would be quite steady.

Thanks for the calc.  ;D At 297,012 Satoshi per person - what could I buy with 1 satoshi ?

Lol

Gee, how nice of you.  I'm sure the dude's spouse and heirs would be thrilled at the double whammy.


Even if you believe this (and I don't) then if you have a lot of "stash" and you're worried about network security - the obvious non-violent non-coercive non-stealing solution is to spend a bit of coin in a transaction to help fund miners.  Every day if need be.

And if you're not worried, then why should you pay for security you don't need?

You're imagining an issue where there isn't one.  This kind of answers your point below too.

If you don't contribute to your own coin protection and lose it owing to lack of network security, who do you have to blame?  No-one but yourself.

There is no problem to see here.

Lol. If it's so important to compensate for estimated coin loss, why don't you make an alt-chain that implements it your way? Even if your alt-coin struggles at first, people will eventually start to feel the pain from all that unwanted deflation and they will come flocking to your idea.

I think 20999999.97690000 includes the generation 50 in block 0 that aren't spendable (and there isn't consensus on whether to make them so; do it I say) so actually it's 50 less.  But I could be wrong.

Are you replying to me or to nwbitcoin.  Cause if you're replying to me and have read this thread a bit then you should have realised that I DON'T consider coin loss a problem.  I was just replying to a genuine question with an intelligent and to the point answer.

Oh, by the way, thanks for fullfilling my prediction.  I should take up gambling for a living.

4 pages, did someone proposed the idiocy "ehi, if a bitcoin is not used for 10 years, we should remove it and put it back to be mined"?

Of course they did... maybe we should start a new subforum, only for people who've been around since 2011 or so, and pay someone to edit out the chaff.

OP, please do a better job of looking in the forums for these asinine discussions.

On the up side I have one more to add to the list.

See you guys in two more months ;)

for future reference here are all the threads I've found to date that near constantly try to resurrect a non-problem. If you feel so passionate about it, please move it to the alt-currency section. It has no place here on Bitcoin Discussion. It already been "discussed".

• Is this idea to counter lost bitcoins possible? https://bitcointalk.org/index.php?topic=131101.0 (https://bitcointalk.org/index.php?topic=131101.0)
• Can bitcoin die at some date because of stranded bitcoins? https://bitcointalk.org/index.php?topic=112525 (https://bitcointalk.org/index.php?topic=112525)
• A proposed solution to adjust for lost Bitcoins: wallet 'heartbeats' https://bitcointalk.org/index.php?topic=20799.0 (https://bitcointalk.org/index.php?topic=20799.0)
• Recycle lost coins https://bitcointalk.org/index.php?topic=44511.0 (https://bitcointalk.org/index.php?topic=44511.0)
• Deflation and Bitcoin, the last word on this forum https://bitcointalk.org/index.php?topic=11627.0 (https://bitcointalk.org/index.php?topic=11627.0)
• Coins checking and snapshotting https://bitcointalk.org/index.php?topic=473.0 (https://bitcointalk.org/index.php?topic=473.0)
• Restoring Lost Bitcoins https://bitcointalk.org/index.php?topic=48851.0 (https://bitcointalk.org/index.php?topic=48851.0)
• Deflation, Doomsday and the return of Lost Coins https://bitcointalk.org/index.php?topic=79576.msg882591#msg882591 (https://bitcointalk.org/index.php?topic=79576.msg882591#msg882591)
• Make Bitcoins "dissolve" after some time if not used? https://bitcointalk.org/index.php?topic=8640.msg125407#msg125407 (https://bitcointalk.org/index.php?topic=8640.msg125407#msg125407)
• PROPOSAL: Move all "lost bitcoins" threads to "Alternate cryptocurrencies" https://bitcointalk.org/index.php?topic=131121.msg1404275#msg1404275 (https://bitcointalk.org/index.php?topic=131121.msg1404275#msg1404275)

Yeah, but what if too many of the old threads get lost? (For that matter, are you sure you found them all?) That's why it's imperative that we create new "lost coins" threads every month in perpetuity. Ideally, it should be hardcoded into the forum software so that they're generated automatically.

Using that logic, it might make more sense to expire the membership of anyone who has been on the forum before 2011 to prevent them feeling that they have entered groundhog day! 

;)

You think memory is going to be the problem?! At the rate hardware is improving? Frankly, your proposal is absurd and tyrannical. How do you know that those "zombie" threads you are proposing to dig up are lost? Maybe they were abandoned for a reason. People should be free to make that choice. I suggest you go make an alt forum, because you don't have a frickin' clue what bitcointalk is all about. Oh, and guess who just got added to my ignore list?