Bitcoin Forum

With the general theme of these forums these day, let me indulge you in another "the sky is falling and bitcoin is doomed" scenario. If you think bitcoins getting lost forever is a problem, then you have bigger issues than you may think.

See, Satoshi started mining on his own, before critical mass came to start taking up the mining business. He was obviously able to mine huge amounts of bitcoins. I'm talking about huge amounts. You know, like on the order of a million at least. Now Satoshi has one of two options: keep the bitcoins or lose them. Which do you think he chose?
If he decided to keep them, you're assuming he may or may not run off with his money now. He could easily sell off everything he has and make a nice multi-million dollar profit, probably wreaking havoc and panic for bitcoin and possibly destroying all trust in the currency with a bigger flashcrash than ever seen before in the bitcoin market.
If he decided to lose them, then the designer of bitcoin himself destroyed something on the order of a million or more bitcoins. Would the designer of this beautiful system do that if he thought destroying bitcoins was a problem?

Of course, there is the possibility that he's keeping the coins and plans to pass it on as inheritance over many generations, perhaps spread donations to noble causes, etc. etc. But then, my "trust no one" friends, I hope for all our sake that he destroyed them rather than hope that he is more of an altruist than a hedonist.

What most people fail to realize is that bitcoin is in/deflation neutral. This means that bitcoin doesn't care about inflation and deflation. So what if a pizza costs 10,000 BTC or 0.5 BTC? Bitcoin will still work just as well. You'll just have to deal with the fact that prices change. Get over it.

Edit: It's probably worth noting that bitcoins being destroyed is good for most people. That means there are less in circulation and yours are worth more.

Thank you! Someone who actually understands economics! Bitcoin doesn't get affected by price changes the same way paper money does, it's only merchants and traders that get worried about exchange rates and so on and yes prices change all the time, it's the people that decide that now so you have to decide whether or not something is actually worth that many Bitcoins rather than automatically tie it to your countries' currency.

*sigh* :P

Satoshi, Satoshi... Isn't he the guy that made a fortune on the internet, married into the Rothschild (holy cow even my spellchecker has heard of them!?!? Where is my tin hat?!?!!) family, bought a few more minor nations for their collection, and fathered Spender the Terrible, Scourge of the Markets in the early 21st century?

Do I smell a novel here... "Spender's Game"...

-MarkM-

If an early adopter suddenly were to - by accident maybe - dump a couple of million BTC at the market at once, wouldn't that cause a massive flash crash and hyperinflation? Merchants, but also anyone else dealing in BTC would have to live with that risk of a several thousand percent fluctuations.

Bitcoin wallets getting lost - "shot into space" - is not a big problem for the rest of the users, that's what happens if the lost wallets suddenly re-appear like some sort of gold meteorite.

I can't find a link right now, but I recall some (british?) scientists analyzed all transactions and proved that most part of bitcoins (>50%?) belong to one person.

A transaction sharing 2 inputs is unfortunately only a strong hint, not a proof of ownership.
This might have been true a few years ago by the way, nowadays coins seem to be more dispersed.

Don't forget that 5 M BTC were mined during first 2 years. If 4 M belongs to one person it's still a big part of the whole supply (19%).

If I had a million BTC I would keep the bigger part of it in a safe wallet and only once and a while sell a few of them, and pay out a few friends and fund some beneficial institutions.

Maybe Satoshi is gradually selling his/her coins even as we speak. Gradually drip feeding them into the market.

You'd see some old coins being moved then, most of the early mined 50 BTC outputs still lie dormant. They are either lost or stored long term. OP is worried about option 2

I'd say that's more than unlikely.
I myself started mining in early 2010 and I'm pretty sure there were a bunch of others way earlier than me.

Look at the difficulty history and try an educated guess: Satoshi might have mined most of the first 30k blocks himself (which, I think, is still unlikely), 30k*50=1.5million.
That's probably about the most he ever mined.

If he already sold them, or kept them, who knows, but who cares anyway?
He probably hasn't "lost" them.

Actually, if you read the old cryptography newsgroup and the blockchain, you can see that Satoshi produced the genesis block, then nothing at all happened for about the week, then he first announced availability of the client and only started to mine the first blocks few minutes later. From what I saw people were rather quick to test out the client themselves, so let's assume he had about an hour's time to "premine" alone.

Millions indeed.

You're hypothesizing as much as I am. Neither of us are provably correct, but both of us describe plausible scenarios. Either way, most bitcoins from the dawn of bitcoin are dormant, so the situation hasn't changed. If bitcoins being lost were an issue for Satoshi, there would be some design decision in the protocol to recover them - he obviously knew that bitcoins were going to be lost over time.

I'm not worried about Satoshi owning millions of coins. I don't think the sky is falling. I'm kind of just poking fun at all the doomsayers on these forums. I think everything is great and Satoshi made a brilliant machine. The only thing left to do is follow through and remove the max block size limit like he wanted (according to the design of the protocol) and let bitcoin roll!

Btw, I know when we see who Satoshi is. When Forbes publish his photo with "The 1st Trillionaire" title. :D

Except that by then we'll all be "trillionaires", seeing as the dollar will be worthless.

Perhaps he will be the first trillionaire in satoshis ;)

What I would like to see is a picture where you can see how long has each bitcoin bin untouched.  Perhaps something like this already exists.

On this picture you would see the untouched virgin coins, as well as the general activity all in one picture.


X axis would be "time last touched", y axis would be "time generaged".  Like this,  if 5 blocks were generated, and no transactions were made:

If first 100 were spent in the last block:

Of course, this would be a bitmap, and each pixel could present 200 blocks or something.

http://blockchain.info/charts/bitcoin-days-destroyed-cumulative

Calculate the total number of bitcoin days and subtract this. You'll get number of bitcoins * staleness.

...which is around 60% atm by the way.

My understanding is that there are no addresses with such large amounts of coins, so if somebody has a million coins he has divided them into many addresses.

He did even a better thing. He left generated coins untouched to make us believe the keys were lost.

If he did mine millions of coins, I doubt he deleted them. I also doubt he would "crash" the market by selling them all at once. I believe he would be smarter than that. Of course all this is just guess work. I wouldn't stress about it.

I was thinking that OP's concerns are extremely valid. There is no way that those original coins are lost.

In my opinion, Satoshi is more than one person, due to the complexity of bitcoin - I dont think a single person could design the whole of bitcoin.

I'd also say that the identity of Satoshi is highly critical to bitcoin due to the reasons given by the OP. The fact that Satoshi remains anonymous and has not touched their original coins is ominous.

My guess is that they 'Satoshi' realised the risks of remaining involved after the project started gaining mass adoption and decided, once the bulk of the design and development of the system had been completed, to let others develop further the concept. Satoshi would be happy to do this, as they would have accumulated the (max) 5M coins already and be happy just to sit on this huge amount of current & future wealth, without feeling any pressure to contribute further to the system.

So the OP states that Satoshi has not moved any of their coins since they were mined. This means they are still just waiting for the system to become more stable and adopted before moving coins out. If they were to move coins from those original addresses, it would be sure to cause alot of chaos at this stage in bitcoin's development (as noted by OP). I would guess that Satoshi, as the persons who invented bitcoin, would prefer for the system to gain mainstream adoption before they touched the original coins.

I'm sure that they have been thinking alot about what to do with those original coins. There is no way that those coins are lost. Someone smart enough to (1) create bitcoin and (2) leave the community to remain anonymous and just sit on the 5M (max) coins that they had created would definitely not loose such a huge number of coins.

Clearly 'Satoshi' is very much in touch with bitcoin and is tracking these forums regularly to work out a good time to release the coins and cash out. The problem for Satoshi is if they touch those coins, it's going to cause a huge amount of interest. Any cashing out would cause chaos. It doesnt matter if he only liquidated a small proportion - it would show in the blockchain that he/they is active and any action by itself that hinted a liquidation of such a large number of coins would be sure to cause a huge sell-off and problems for bitcoin, hence devaluing Satoshi's large holding.

Regarding the identity of Satoshi, there are some good existing posts already on these forums. (I'll leave it to the reader to run a search)

The New Yorker article I believe did not get anywhere to discovering who is Satoshi. As stated, I don't think it could be 1 person, simply because the design and code is so complex and well built. In addition, it is unlikely that Satoshi, given his/their need to remain anonymous after creating Bitcoin, would attend a cryptography conference.

http://cryptome.org/0005/bitcoin-who.pdf

I would also suggest that it is likely to have involvement from both US and Europeans, given that many of Satoshi's posts use American English, yet The Times of London is quoted in the blockchain.

The most convincing arguement for who is Satoshi that I've read is this article, which pins it to 3 engineers - not academics - who have coauthored a range of papers around cryptography. The author located their identities by performing phrase analysis on the original Satoshi paper.

Charles Bry

Vladamir Oksman

Neal J. King
http://www.facebook.com/neal.j.king (http://www.facebook.com/neal.j.king)

* a phrase in Nakamoto's Bitcoin paper is replicated in a patent application filed the same year
* the domain name for Bitcoin was registered 72 hours after the patent application was filed
* Satoshi's posts were made during European working hours and are a mixture of US and UK English (implying US and European involvement)

http://www.fastcompany.com/1785445/bitcoin-crypto-currency-mystery-reopened

Its likely that 1 of these 3 men, if not all of them collectively hold a huge fortune in bitcoins (a theoretical max valuation of nearly $250m) and are waiting to cash out, but have chosen not to do so yet for the reasons given earlier in this post.

Also, I notice that Satoshi was at one point a regular on these forums. Therefore one of the people out there who might be able to help with confirming this identity is Theymos, the forum admin.

From that chart, you can't tell how many coins from the first, say, 6 months, were moved, and at what time.

Does anyone know if some code that generates that 'days destroyed' chart is available?  In fact, I would just need something that iterates trough all the blocks and looks up the point in time when they were moved.

what about actual transactions that seem to be lost in bitcoin land.   ??? ??? ???

Status: 0/unconfirmed
Date: 3/11/2013 22:17
To: 1ABY6fqJtvxAjgMSijCCvXrrYHN33b8eNa
Debit: -3.159 BTC
Transaction fee: -0.00004606 BTC
Net amount: -3.15904606 BTC
Transaction ID: 534125043490a5c0c53c1140efa3e4f0f1d4489435fc5a4840b3647f5a95d785

Not to be too pessimistic. But there is an alternative scenario that is likely to happen eventually. Satoshi may quite literally be dead.

In the long run, we all are. My family will be able to get to my fiat accounts but will have a hard time even comprehending my Bitcoin investments/stash/mining-equipment/etc. Something to consider.

see also: https://bitcointalk.org/index.php?topic=153238

It looks like there's no sound answer for this (huge?) problem. Is the solution mentioned in my topic (https://bitcointalk.org/index.php?topic=153238), to disable the 'Kill-switch', even considered by the (core) Bitcoin community?

This transaction is not valid (negative fee and amount?) so it's not accepted by any other client (particularly the miners). Anyone with a (modified?) Bitcoin client can generate invalid transactions all they want, but if no other client accepts it, it's not recognized as a transaction and won't get added to the blockchain.

I had a very good explanation on this subject by one of the mods of the board. For me it has become quite acceptable that the wealth distribution isn't that bad after all and gets better over time.

read it here: https://bitcointalk.org/index.php?topic=153238.0

I have thought about this...until mass understanding...and the killer app....most people struggle with even simple concepts....let alone how to se bitcoin, for a deep freeze, signed armoury account.

They would guaranteed fuck it some how even if they knew it was valuable.

likley the would just throw everything out/mining rig, usb/wallet to some landfill

it almost seems that world is going to be divided like this those who understood bitcoin crpto early and the rest

Some points, yeah I agree they wouldn't crash the markets.  If they sell slowly they can make craploads of money.

Secondly, its probably a good idea not to put it all in one address.  Like what if someone got the private key by accident then client computed it and like finds out he has 4 million coins in his account.  Splitting it up is safer.

And its not trillions of dollars.

We can imagine a number of scenarios. Most of what I have read paints the Satoshi as a boogeyman out for profit. This is possible, and realistically if you can design an open source p2p crypto currency then, hats off to you, by default you are a prime adopter. Should those who started to mine on day 2 be painted with a similar brush? Maybe the 2nd guy who started to mine has such a plan, and which would be more likely.

I had been wondering what % of the total coins one would need to be the bitcoin 'central bank'; obviously such a position would need to be large, for no one can provide liquidity out of thin air, ie print, I am thinking more about the Hunt Bros attempting to corner the silver market. Perhaps our evil Satoshi is holding reserves to prevent an external force from attempting such a scuttling maneouver, perhaps when the captains of the world's banks fear the worst?

The problem with cashing out to a fiat currency is that you're then stuck with a lot of fiat. You might get taxed. You might get arrested for illegal proceeds. You might lose the proceeds a-la Cyprus. You might have to submit KYC to Mt.Gox.

Q: If you think you're going to be so rich as Bitcoin climbs how do you cashout when there's nothing safe to cashout into? Gold? Which country do you want that gold to be in? Think about it.

So ideally what you want is to spend the coins direct. There's only one guy selling his house for coins right now.

If Satoshi is actually more than one person as many believe then
the coins would be divided among them thus decreasing the likelihood
that they would all agree on some concerted action.