Bitcoin Forum

Bitcoin has a finite supply of 21 million and that means that it can not be manipulated like fiat currencies. It's limited supply means that no centralized authorities like CBN can mint more of it and cause a likelihood of inflation. Bitcoin was structured from it's creation as a decentralized digital cash with a limited supply which makes it an hedge against inflation.

Many people have lost their Bitcoin forever because they can no longer send it to another wallet from the Blockchain, this happens when a person loses the private keys of their wallet. These Bitcoin that are in the Blockchain but the owners can not sale them are parts of the 21 million finite supply.

If the amount of the Bitcoin that people holds begins to be lost because they have no control over it in the Blockchain forever, due to the lose of their private keys, the effect will be deflation. Although the amount of Bitcoin lost through this means might be insignificant compared to the amount that is in circulation now, but if the loses keeps occuring in the future, it will certainly lead to deflation

The effect of deflation is abnormal increase in price which can cause Bitcoin to be overpriced in the future. My question is what do you think will be the adoption and usage rate of Bitcoin then, whether it will increase or decrease?

According to Satoshi, "lost bitcoins are considered donations," which means they will contribute to reduced the number of bitcoin in circulation.

In such a case, the possibility of the price increasing will be high and the possibility of the price decreasing will be low; the law of demand is real.
 
But the question is: what will keep making people lose access to their wallets? Won't they learn how to protect their assets? And if such things keep reoccurring, do you think the common people who will want to start using bitcoin will feel safe holding it?

Deflation is simply drop in market value as against inflation, bitcoin cannot go under deflationary trend all because of the lost coins to the blockchain technology, what you should know concerning these is that, every lost coins will be sent back to the network and not as if they were there somewhere hanging in wait of someone to claim them, indirectly, they have been redistributed back to the network and which is part of what we see influencing the market price and the demand and supply of what the bitcoin price gives through its volatility.


Just to add more on this for further clarification, i don't think its common for you to see someone making a huge amount of bitcoin transaction to afford making a silly mistake, i don't think the whales can afford to do this, maybe common to the little holders or newbies and these little amount were being returned back to the network in circulation to everyone holding.

Though I can say that carelessness or lack of proper information on how to store their coins contributes to loss of Bitcoins. But then some other factors like natural disasters or death can lead to loss of such coins. A lot of people, keeps their privacies even till death. And lost times these kind of people owns large amount of Bitcoins and due to so many reason they hid it away from everyone even their loved ones doesn't even know about the amount of btc they hodl. Many of these are some reason why lost coins might be in the increase.
definitely from all these lose, and it's limited supply, the price of BTC will be on the rise in the nearest future.

Lost of bitcoin start from the person who is the holder of bitcoin that been lost, many persons who lose their bitcoin some of loss it base on carelessness of investment and also exposing their seed phrase, so it's obvious that people who complained of losing of bitcoin, it's neither they invested in wrong way or they mistakenly misplaced their seed phrase

For me, bitcoin if we don't lose in bitcoin the price will not appreciate,  and greediness is one of the elementary things that makes people to lose in bitcoin, as someone who invest in Bitcoin have a duration when you will make a withdrawal and when you will not make, when you invest in bitcoin  you suppose have a limitation

So the best thing is to know the rudiments of bitcoin before you invest, so therefore if you don't want to lose in cryptocurrency investment mostly bitcoin try to learn and understand everything about bitcoin before you invest.

Any bitcoin lose is an airdroyfpr the rest of the holders, AirDrop on the sense that it becomes a donation to every one since the lost of that bitcoin will increase the scarcity of bitcoin which results in increased in the value of bitcoin, so yes the more peopleise their bitcoin without possible recovery by anyone, the more bitcoin become higher in it value in the market so glad to tell you that when a bitcoin holder list his private keys and access to the wallet, only the holder himself lost but others will definitely gains from such lose no matter the fraction it is, between it good that we take bitcoin as for what it is and allow bitcoin to grow organically.

Firstly this is a general group so when using terms like CBN it's best you define it also in full so people can understand what you are talking about. I believe the CBN you are talking about here is the central Bank of Nigeria. I would agree with you that the supply of Bitcoin having a finite price would help it not to be manipulated but that's not always 100%.

The price of Bitcoin like almost every other crypto-currency is volatile and so demand and supply goes hand in hand. I believe you understand what whale is and how they play a part in affecting the price of crypto-currency. Large holders in unionism can actually drop the price of Bitcoin if they decide to sell off, creating panic which can further affect the price negatively.

Lost of bitcoin can be due to many events like , one losing his seed phrase, one getting his bitcoin stolen from his wallet due to lack of proper security of their assets or due to death etc. Alot of folks lose their Bitcoin by losing their seed phrase, we all know that our seed phrase is like the key of our apartment without you can't get in but in this cases is irreplaceable once you lose it you have lost it forever till you are able to find it back .

While some bitcoin losses are due to death , some folks endup losing their lives without their love ones, knowing the where about of their seed phrase to Access the wallet, or sometime their love ones may not be aware of them having some bitcoin stashes.

So we should always be cautious with our bitcoin stashes so that we won't endup being a victim of losing our bitcoin due to careless keeping of our seed phrase, or  not securing our wallet properly.

Manipulation exists in all market and all areas. Bitcoin market is not an exception and it can be manipulated as same as other markets.

Bitcoin is Proof of Work in design and to get more bitcoins, there is work to mine new blocks and get bitcoin from block rewards. Until 2140 and 21 millions of bitcoin in total supply mined all by miners, with each new Bitcoin block, there will be new bitcoins appearance and added to circulating supply.

Bitcoin by its design, is inflationary too but its inflation rate is less than fiat currency and inflation rate is fixed by Satoshi Nakamoto code. No one can change it, that is different than fiat currencies with manipulated inflation rates by governments and central banks.

Here is the quote from the man himself:



It's not abnormal, it is how Satoshi design it. It will not have any effect on the adoption and usage it. And that's what really separate Bitcoin is, only 21 million supply and so you really have to hold and it will really become scarce in the future.

I guess that there is nothing any Bitcoin holder can do when they lose their coins, they have to accept the lose as a donation to the Bitcoin community, although no other holder can benefit directly from the "donation. That means that anybody that wants to hold Bitcoin must have sufficient knowledge about the importance of securing their private keys otherwise the inevitable of losing their coins permanently will happen and their only consolation is that they have donated it. I think that this is one of the major demerits of Bitcoin because aside from a holder losing his/her private keys, death, lose of memory, man made and natural disasters can also cause permanent lose because Bitcoin is not centralized, except the person shared the private keys with a trusted person or people.

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Since you're see decentralization as demerits of Bitcoin, this will make your Bitcoin becomes centralized and other people don't have to remember the keys in order to retrieve your coins.

This is what the good thing in Bitcoin, it offers freedom, someone can use Bitcoin in centralized way and other people can use Bitcoin in decentralized way.

Well, this is a very good question you have brought up, and what I have to say is that..
First, the chances that the amount of bitcoin people loss access to continuing to Increase is very slim, not impossible, but also understand that sometimes, "slim" can be equal to "not possible".

Secondly, if a good number of bitcoins are lost by their owners, which simply means that those bitcoins are off the market,  which thereby increases the price of bitcoin as demand gets high and supply becomes very low due to the number of bitcoins that their owners have no access to, bitcoin can still be used for day to day transactions even with its high price, since one doesn't need a whole 1 bitcoin, bitcoin can be divided into smaller parts known as satoshi, and the lesser the parts (even down to 0.00000001), the cheaper it is.

The scarcity of bitcoin is increasing due to human error, it is estimated that around 7,800,000 BTC have been lost ^[1], other reports say there are around 3,840,000 BTC ^[2], this number even exceeds bitcoin that has not been mined.


No one can resist innovation, bitcoin & crypto adoption will massively grow from year to year, in line with statistical data from Statista ^[3], the lack of actual circulating supply of bitcoin because lost bitcoins cannot be a benchmark for reducing bitcoin adoption in the future. That may happen if there are not many units in bitcoin, or the minimum transfer in a bitcoin transaction is 0,1 0,01 or 0,001 BTC.

Providing a little information regarding units in bitcoin, we have bitcoin (BTC), bitcent (cBTC), millibit (mBTC), bit (μBTC), finney (finney), satoshi (sat) & millisatoshi (msat). You can visit bitcoindata.science to make conversions for each unit ^[4].

Back to the discussion about adoption, because we have these units, of course a real reduction in supply due to human error will not reduce bitcoin adoption in the future, even now we have LN which can make payments as small as 0.00000001 bitcoin or 1 sat ^[5].

[1] https://coingape.com/blog/approximately-7-8m-bitcoins-have-been-lost-can-they-be-recovered/
[2] https://rewallet.de/en/blog/bitcoin-statistics-2023/
[3] https://www.statista.com/statistics/1202503/global-cryptocurrency-user-base/
[4] https://bitcoindata.science/bitcoin-units-converter
[5] https://dci.mit.edu/lightning-network

Deflation isn't an issue, in my opinion, but it is worth considering. So, first, we need to consider Bitcoin as money and Bitcoin as an asset. Bitcoin as an asset should increase in price, and it's beneficial to investors, so scarcity is a good thing. Bitcoin as money should be convenient to use. It seems that in general, economists believe that a slight controlled annual inflation is good for fiat because it motivates spending instead of hoarding. If we accept that perspective, it's a problem. But it's an ongoing concern, then, as Bitcoin keeps growing in price. As for a usability perspective, Bitcoin is divisible into satoshis, so there's plenty to go by even if the price per coin gets much-much higher.

The security and permanence of Bitcoin mean that users must be diligent in protecting their private keys. However, this also introduces the challenge of making Bitcoin more accessible and user-friendly, especially for those who are not tech-savvy. If more people start losing their Bitcoin due to mishaps like forgotten passwords or lost keys, it might deter some potential adopters. The fear of permanent loss could make Bitcoin less appealing to new users, especially those unfamiliar with the necessary precautions.

I think the adoption and usage rate of Bitcoin might depend on the community’s ability to educate new users and develop solutions that can mitigate the risks of loss without compromising the core principles of decentralization.

There is also another way of loosing Bitcoin, and that way is by sending ones Bitcoin into a mysterious address mostly by wrongly inputting the address before activating the transaction. A lot of Bitcoin has been lost already and more are still going to which entails that we have to be careful enough to secure our wallets likely from theft or cyber hacking.

A minimal and basic knowledge on Bitcoin can save a person from lossing his/her portfolio, it will be much disastrous if the portfolio has been grow into a full size. Knowledge on where and how to hold is essential in other not to be victimized.

I think this is seriously a question that will remain unanswered because of the multiple conditions on it. First off, most of this coins are not done out of carelessness, some are of lack of proper knowledge and then we have the biggest amount of loss which is due nature, either the owner lost memory of where the offline back up is before natural or due to health conditions or probably he dies while not been able give a trace to the recovery seeds place. Most of these things are things I don’t think can be changed, luckily it adds to other value.


Although the possibility is very hard but I don’t considered that been lost in totality because there is a faint chance that the address can be generated by someone else or probably someone else has the address generated already and has access to the keys belonging to it, but the possibility is just too small.

Well, what I actually think on this matter is that people will not continue to lose Bitcoin now and in the future. As a matter of fact, every new and old investor in Bitcoin already knows the worth of the asset, and as such, they are always very careful now compared to in the early days of Bitcoin when it wasn't worth any reasonable amount and some people were just taking it for a joke until the price spiked. That was when some people started looking for where they kept their private key and couldn't find it, and their coins were lost forever. The rate at which people lost their Bitcoin ten years ago is not the same as what is happening today. Bitcoiners are more informed now than before. 

The only way people are losing their Bitcoin this time around is that their Bitcoin gets stolen by scammers or hackers. 

when more and more people are finally aware of Bitcoin assets, then when they have them, of course, they will be more aware of protecting their assets from the risk of losing wallet access.
the situation may have been different when Bitcoin was still not so popular and its price was still cheap in the past. because its ownership was considered not so large, there was a tendency for them not to consider the security of their wallet storage.

the adoption and use of Bitcoin in the future is real. currently, people are more open to Bitcoin even though they still use fiat. however, currently, the use of Bitcoin is still limited. But when it is successfully used en masse, its adoption will continue to increase even though its price will definitely increase.

Losing access to ones wallet can be helpful to keep Bitcoins value higher because that loss is a kind of locked liquidity that helps the whole Bitcoin holders.

Bitcoin is deflationary by nature because of its limited supply, however the ones who got Bitcoin for cheap rates could dump the value of Bitcoin to some extent if they hold huge number of Bitcoin.

I think some recent sell offs by German government, and those Mt. Gox creditors getting their Bitcoin back are such examples for us. They somehow crashed the market by selling bulk number of Bitcoin.

However, I believe such type of sell offs can be helpful to make Bitcoin more deflationary because such holders when sell their Bitcoin then actual holders buy those Bitcoin for long term holding and that approach makes Bitcoin value higher overtime.

There isn't a mass adoption until we figure out a way to make transactions very cheap, like nearly free, very cheap, and also very fast, like 30 seconds max. Which means that we have a lot to figure out until then because we will not be having that type of transactions anytime soon, it will not happen all that easily and unfortunately it will take time for us to fix many issues here as well, including regulations as well.

But at the end of the day, if we are growing that's all that matters, because it means there are more people today than yesterday so that is the only thing that we should be caring about. I get that it is not going to be all that crazy or be any great, but we could make that work one way or another.

Imagine a situation where the whole world is using it right now, for everything, there are no more fiat currencies and we all use bitcoin, the transaction times would ruin the whole world, and the costs would be insane. Hence, we need to fix some stuff before we start to think about this. Lost coins do not mean anything at that point, because we have other stuff to think about, lost coins just makes the price go higher, that's all there is to it, nothing added on that, it is what it is.

Every sell-off, we can expect that there is temporary decline of the market price. However, as we have seen, it will go back again to where it was and will try to recover from the plunge. It means, there are still people believing on this market and will continue to hold this currency. Also, no country can totally influence the termination of this market as we have witnessed with China. They banned the usage of crypto and yet, we have seen that this market continue to proliferate. It goes to show that no country or no single entity can make this market collapse.

It will increase. I think if we're going to have that stats for which I've read before that there's only around 1 digit of percentage for its adoption globally. And that means that we're not yet on the peak of its adoption and usage of it. As per usage, I am not expecting anymore that many are still going to use it as a payment because what people will do is going to hold it as a store of value.

That's most likely the usage of everyone as an asset compared to what it has been used and endorsed before by satoshi. Gone are the days that everyone likes to have it and use it as a payment because it's quick and cheap. But today, there are moments that we can't use it as payment whenever the network is being attacked and spammed for which causes it to be quite expensive.

So far, the fees aren't that much and it's fine because it's not a lot at all. We might even see that it goes down from 4 sats/vB to 2 sats/vB and eventually, 1 sat/vb.

The Bitcoin price can be manipulated by buying and selling large amounts of BTC, but I agree that the BTC price cannot be overvalued by a centralized entity, that is creating BTC out of thin air and increasing the BTC supply.



What do you mean by "overpriced"? A price is determined by the current balance between supply and demand on the markets(and production costs). If the supply and demand are balanced at 150K USD per BTC, then this is the real market price of BTC. However, this market price can be temporary and the changes of demand could lead to a new market balance, at a lower or a higher price.
BTC will always remain volatile, which means that it will get adopted by a lot of risk seeking investors and speculative traders.
The "average Joe" would never adopt and use BTC to buy groceries at the grocery shop.

Bitcoin's scarcity is one of the mechanisms that gives it its value. But the 21 million cap can be changed if there is consensus for such a change and a hard fork. But this would be close to impossible to obtain, and I don't see why anyone serious would propose such a move let alone support a devaluation of bitcoin. In fact, any number of bitcoin is enough (even less than 21 million) because it is divisible to far below a 1 cent value. 

I think it is ignorance that makes people lose interest in keeping their access to their Bitcoin safe. Such persons won't say that they do not know about the importance of keeping their keys safe and how to do that, yet they still make mistakes, and the worst part is in this present generation where knowledge and resources are available in the interest. It's not like they need any personal guidance or tutor to guide them through the part.

Anyone going into Bitcoin is a personal choice no one is willing to take responsibility for anyone just because they introduced them to Bitcoin. Keeping our assets safe is personal so getting the knowledge first of how to store our coin is good.

The possibility of people losing access to their wallets and assets will keep decreasing as the price of Bitcoin keeps increasing. The reason why so many people lost their wallets and their bitcoins in the past was because it wasn't valuable at that time, and people used to buy or mine it but never cared much about it. It's just like you have a bunch of coins and tokens that are worthless in a wallet, you wouldn't care much about the wallet because you don't expect those tokens to make you rich one day.

Now that the price of Bitcoin is so high, and people know its worth, they are not going to lose their wallets or access to it because they will take good care of their private keys and seed phrases. They can't afford to lose their bitcoins because they are worth a lot of money.

So even though the effects of more bitcoins being lost can be positive in terms of their price, the possibility of that happening is very low now.

I wouldn't advocate for a change of Bitcoin 21 million cap, that will destebelize everything that Bitcoin stands for, it will mean that it's original finite supply that has made it to stand out will become altered. I will rather have the amount of Bitcoin that will be in circulation in the future to be lower than 21 million, owing to the "donations" that will remain dormant in the blochchain, instead of exceeding it, it will cause it to have inflation which will reduce the value in the long term. And when that happens we will likely not see ATH price again and it can be reduced to the level of a stablecoins. Scarcity remains the main ingredient that propelles price increase and the lesser Bitcoin that is in circulation the higher chances that it's price will continue to increase.

The originally foreseen supply should neither increase nor decrease. Instead, it should remain as it is. There is no reason to abandon the number 21 million. Instead, the developers should think about L1 scaling, so we don't end up in situations with fees going up to several hundreds of sat/vByte as was the case with Runes and Ordinals. A lot has happened since 2009. Computer technology has developed and become more accessible and cheaper, and Bitcoin should move with the times if it is to ever become a serious competitor on the big stage.   

I don't think people will make the mistake of losing their wallet key in the future. Maybe it happens by accident. Bitcoin is one of the most valuable assets today. No one wants to lose this wealth and various steps are taken to protect this wealth. Even if some bitcoins are accidentally lost, I think this is positive for the bitcoin market.

I quite agree with you, with Bitcoin's ever-increasing value and fame, more and more care will be exercised in protecting one's private keys by individuals and organizations. While the accidental loss of a private key can and will occur, awareness and measures for bitcoin asset protection are likely to improve over time. If i remember it right a friend told me when I was first introduce in crypto, that the high price of Bitcoin enhances user incentive to take wider ranges of precautions, like the hardware wallet usage, multiple signed systems, and secure backup for practices, with the understanding that some bitcoin disappear by accident he added. This can be viewed as a net positive for the market because it reinforces the scarcity of the asset and potentially increases the price. In general, the resilience of the bitcoin ecosystem could be higher because security practices unfold to ensure most owners properly protect their assets.

Yeah, i think your opinion on this is quite relatable because I believe the level of exposure now wasn't actually the same compared to when Bitcoin actually started so I feel every practically Bitcoin investor now fully understand the context behind them actually doing something that can lead to the loss of their coin and like you said the possible most frequent results to people not having assess to their assets is majorly because of the scammers and hackers threat in the society.

Let me tell you one true story of my country.
The dictator government ended last week here, and now we are getting the real news. The government approved a couple of banks without any collateral because of their owners' political backgrounds. Those bank owners took billion-dollar loans from their own banks, which is not their money. The central bank just printed as much money as it needed to save those banks from going bankrupt.

Bangladesh's currency had some good value just four years ago. Its ratio against the dollar was 1/78 (1 USD = 78 BDT).
But now, 1 dollar is equivalent to 119 BDT. This means whoever has $1000 worth of BDT in their bank account is not worth $644. Can you imagine? This happened because the central bank printed unlimited money. I am glad that I have saved Bitcoin for the last two years instead of keeping fiat in banks.

This is pretty accurate and it's what I believe. People today don't get careless with their private keys. Bitcoin is too valuable an asset for anybody to just have it and forget about their private keys in a way they won't be access their wallets anymore. Gone are the days when Bitcoin was a joke, today, bitcoin is a pretty big deal and anybody who has will not want to lose it so carelessly.



True, and with this, the coins are still in circulation because the hackers and scammers will sell the coins, hold them or swap them for altcoins.
We are a long way from  there, but I believe that with time, more people will take their privacy and security more seriously and that will mean fewer people will lose their bitcoin to scammers and hackers. It's already better than it was six years ago.

Like I said before, I believe that Bitcoiners are majorly losing their coins to the hands of scammers and hackers who will still sell the coins on CEX. I am not saying that there are not people who have lost access to their Bitcoin wallet recently, but it rarely happens these days, unlike how it happened to most early investors who lost their coins because they lost access to their private key, and they were careless about it because they never knew that Bitcoin would experience the huge success it had today.

The fact that you consider deflation as abnormal means that you're taught modern fiat economics where debt is good, spending more than you have is good, fractional reserve banking is good, and all that other bullshit.

First of all bitcoin is not deflationary in its core because you have coins being mined and 10 years from now they will still be mined. As for deflation, you could argue that it's happening anyway, regardless of how many coins are being lost.
Why? Deflation means the amount of goods and services you can purchase with the same amount of money grows over time, making it profitable for you not to spend it. Isn't that bitcoin? If you bought it in 2010, in 2012 you could buy x times more stuff with it. In 2013 even more than that, and so on. You don't have to wait for people to lose their coins to experience this. Just hold bitcoin for more than 4 years ;)

Those that lost their bitcoin for any reason is not going to have a negative effect on the supply size because the entire supply is fixed and this will all have to do about the circulation pattern, in the sense that the lost ones were believed to be as part of the released coins to the network, moreover, the rate of losses is very small compare to the entire supply we have, i dot think this is what we should take as a problem to consider in any way.

Those lost Bitcoin are still Bitcoin but of course there's no market action happens if it's just loss and also if the amount is just not too much large the same with the wallets that compromised still it's up to them if they want to sell but we know does the trader active with the market they will grab every opportunity they have just to accumulate coin as possible.
Also we have a large supply of the Bitcoin yet and not all institutions will hold this kind of coin just to monopolize they will make a quick slip right here.

Having a finite supply doesn't mean that it can't be manipulated or are prone to it and the more it can happen to BTC because it is highly decentralized. Even if there is no inflation, the effects of inflation like a decline in the value of a currency can still be experienced by Bitcoin. The thing is, it can still recover faster than any other currencies or assets out there, no wonder why it is still considered as a hedge against inflation (as you also said). Blockchain is only a technology that BTC and other crypto uses.

We don't send coins there but we send our coins to another wallet and the transactions are only going through the Blockchain for public viewing. Obviously, that once you lose your BTC forever there is no way to recover it and send it to another wallet.

We must only confirm it though because there are lots of Bitcoin recovery stories I have heard in the past and maybe one of it is now us. Lost BTC's can lead to deflation but it can also be a good thing because this makes Bitcoin more scarcer or more valuable. BTC is not a secret anymore. With its huge value and lots of information being scattered everywhere about it, I don't think there will still be lots of people who are going to care less about their BTC's and lose it, so don't worry now.

I agree, even though I'm not the most relevant person to make this claim, as I haven't conducted a single Bitcoin transaction for years. The fees are still generally high compared to other altcoins, such as Stellar, Monero, or even stablecoins like FDUSD or USDT. 

Lost Bitcoins isn't an obstacle; I'm expecting to have lost anywhere between 0.05 and 0.10 BTC myself—not a noteworthy amount in 2014–2015, but it's still a reasonable amount of money nowadays. Lost Bitcoins limit the available ones, leading to increased rarity and, thus, higher prices since the available supply is lower than the 21 million.