Bitcoin Forum

When someone dies his physical gold is inherited. Even when someone dies unexpectedly eventually someone finds it. Instead with bitcoin, if I understand it well, once a person dies or forgets his password, the bitcoins are lost forever. Not just for that person but for everybody. In other words, if this is true, bitcoin is not an economy based on a fixed amount of bitcoins, but with an ever diminishing amount of them.

Is my understanding correct?
Is this perceived as a problem?
Has anyone tried to address it?

Also, has there been any study on how bitcoins are lost?

Thanks,
Pietro

It is not problem because only fractions of bitcoins can be used. I saw a thread here where estimated number of bitcoin lost is already 10%, which equeal to 1.000.000 lost bitcoins

How was the amount of lost BTCs estimated?

While this is a "problem," it's also a good thing. As more are lost, the value of the remaining will rise.

It's like the Ferrari Enzo. It had a limited run. What makes the car special to some is that any time one is damaged due to weather or wrecks, the value of each of the remaining ones goes up significantly.

put your btc wallet on testament

I think this loss is acceptable as it further increases the scarcity of bitcoins.

And technically the coins are not lost, they are just not recoverable.

the remaining bitcoins go up in value  :)

Yes.
No.
Yes.
No, but you can make an assumption about it.

The problem is that it's not possible to distinguish lost bitcoins and bitcoins that are just hold on.  ::)

But it's all based on supply and demand. So those that are "lost" just won't ever be put on the market, meaning (using the 10% lost example) there is 10% less supply.

People holding coins are decreasing the supply. they don't use it, they don't sell it, they do nothing with it.
But it's not possible to say if those coins are just "inactive" or "lost" ...


If there is  1000 tickets sold for something, and 10 tickets are lost, you know exactly how many tickets are sold, and lost ...
But it's not possible with bitcoins. Anyone can just pretend to have lost his bitcoins, to make the value increase, and they sell it

Ahh, that's a good point... but I think over time it should resolve itself.

By the time lost coins have any affect on the bitcoin economy, there will probably be better digital currencies available.  People who believe that BTC will exist forever aren't being realistic.  This is something for us to play with today.

You could do a forum search, there is a thread where people list all the known lost bitcoins. Things like people formatting their hard drive without making a backup of their keys, or people sending bitcoins to the wrong address which nobody owns.

I would estimate that whatever's on the list, there's at least 10-20x as many that aren't reported.

LOL nobody needs to "fake" losing bitcoins.  Lost bitcoins would have the same affect as hoarding them.  They won't make up the big sell walls you see on your favorite exchange and therefore will result in the buy walls moving up.  

If sometimes bitcoin is used in the whole word, and there is only 1 btc remaining. You better "fake" loosing your 10 btc in your wallet.
After a couple of year you could buy Apple or Microsoft maybe.

There is this old thread: https://bitcointalk.org/index.php?topic=63690.0

Or from another thread:

Aha, I think I found it now: https://bitcointalk.org/index.php?topic=7253.0 Total know lost bitcoins is over 70 000 bitcoins.

This IMHO

Yeah, that was a good read and appears to agree with exactly what I think: as more are lost, the value of the remaining go up.

I would also think that if somebody had a significant amount of bitcoins, they would have paper backups somewhere (under the bed, safety deposit, in a safe, etc).

Hogwash, how can lost bitcoins pull its perceive value down when in fact to soothsayers it doesn't have a perceive value. 

Many bitcoins are being lost all the time it sucks

You seriously need to try reading next time. Nobody said the value of them goes down as a result.

Bitcoins used to get lost by the thousands when the currency was in infant stages.

fair tradeoff imo

If the number of coins in circulation goes down, a number of things can be done to offset the effects of deflation and maintain the velocity of transactions.  For example, smaller fractions of currency can be introduced into transactions, however it would be annoying to have to constantly count a bunch of leading zeros.

I was just wondering about this situation the other day, interesting article.

Figured the value would just increase, but it's startling to think that so many coins have been lost already.

No need to count leading zeros.  If the common denomination gets that small, people will naturally migrate to millibitcoins and then eventually to microbitcoins.

Why count the leading zeros in 0.00126 BTC, when you can simply refer to 1.26 mBTC.

I'd certainly expect to see a price of 2.83 µBTC rather than 0.00000283 BTC (or at least I'd expect it to be displayed as 283 satoshi).