Bitcoin Forum

Some time ago I watched the video "28c3: Bitcoin - An Analysis" by Hamacher, & Katzenbeisse that, among other things, suggests Bitcoin is "doomed to vanish" because of the number of lost coins per year. (see http://www.youtube.com/watch?v=hlWyTqL1hFA (http://www.youtube.com/watch?v=hlWyTqL1hFA)).

Lost coins are inaccessible unspent transactions because scriptPubKey is invalid or because the owner of the related private key lost the key.

The video proposal is to give back the lost coins to the community. There is a a simple way to do it: every year (at a certain point, using the block number as index) all coins that were not transferred for the last 5 years are returned to a miners prize pool. The prize pool is divided in equally sized shares and for that year each block mined has an additional price of one share.

With this scheme, every user who owns bitcoins and want to keep them should, every 5 years, transfer the money to another of his addresses.

A 5 year interval does not hurt people using Bitcoins for lifetime savings, and gives enough time to those people to be notified of the change in the protocol.

What do you think?

Regards, Sergio.

1)  A 5 year interval DOES hurt long term savings.  What if I put 100 BTC on a piece of paper, forget about it for 6 years because it's stored in my attic, and then they're all gone?  A lifetime interval MIGHT be acceptable, but....
2)  What's the point?  The coins are infinitely divisible, so even if there's only 1 satoshi left, Bitcoin can still be used.

Now, if you're worried more about deflation and less about actual coins lost, then a much better solution is to just let the 50 BTC block rewards continue on indefinitely.  Eventually, the coins generated would equal the coins lost, and the amount of currency in circulation would be completely stable - no inflation or deflation.

If the concern is keeping exactly 21M coins in circulation, then use a combination of both:  Generate new coins for coins that haven't been transferred in 5 years.  The old coins are still available to the original owner, but if they were truly lost, then they won't detract from the 21M coins in circulation for longer than 5 years.  If they are eventually used again, then slightly more than 21M coins would be in circulation, but that could be made up for by not creating new coins for the next batch of 5-year-old coins that would have otherwise been regenerated.

Taking people's coins is not the same as taking coins that no one controls. Since you can't tell the difference just let it be.

What is it with some people? Control freaks all around us just don't give up. You have a "simple" and elegant system that is Bitcoin, why would anyone want to add all the kinds of stupid rules to it? What is it with this endless desire to turn a simple and elegant system into a bloated monster?

Feel free to fork Bitcoin and add any kind of BS rules to it, then let the fittest survive. It is good that such proposals have no chance to be implemented in Bitcoin itself.

On the second thought, float this idea to Solid Coin N.0 crowd, they may just go for it.


BTW. Today is "Star Wars Day", May the 4th be with you.

Yea, horrible idea, maybe RealSolid is up for it :)

There are tons of rules in Bitcoin, just take a look at the source code: each line is in fact a rule. The only difference is that there are rules that are backwards compatible and others that are not.

I just watched the last part of that video again and it's really bad, he just wipes the floor with bitcoin with dumbed down conclusions that COULD be true but don't have to be. Also his not trusting the bank but trusting anon is weird... man o man... that's not what bitcoin is about, i'm not sure what this guy has been smoking... (sorry for the chaotic rant-ish comment)

1.You can't tell
2. and the decimals are unlimited

So why return ?

I think this is The Idea That Will Not Die.

Bottom line: ain't gonna happen, everybody who created or purchased bitcoin over the last three years did so with the expectation the they would last forever, not that they would have some arbitrary 5-year expiration date.

Its a terrible idea and completely unnecessary. The value in lost coins, is already incorporated in the remaining coins, which become more valuable.

Deflation benefits all bitcoin users.

Never again I shall propose such a bad idea. I swear.

OK, I'll play devil's advocate.  :)

1 can be solved by making people roll it over to a new set of coins every few years.  2 is true and it's why there's no coming 'doomsday'.  I do think there's a benefit though: not being able to know how much currency is in circulation isn't a good thing when you're relying on the rest of it to raise in value.  There's no need to return the coins to circulation, but voiding them after some time has advantages - it would let you know how large the money supply is, and it would allow old blockchain history to be dropped completely after the coins expire.  (The current pruning scheme often can't remove old blocks when some outputs are still unspent.)

This change shouldn't be done in Bitcoin since it would revoke the existing system where coins are good for long term storage.  Who knows how many are on paper in safe deposit boxes with no way to contact the holders to let them know they have to do something to keep them?  But it's an interesting idea for an alt coin.

The only reason anyone cares about how much is out there is because they are trying to manipulate the economy. The free market doesn't need to know the total amount of currency, and neither do the individual participants. They only need to know how much stuff they can trade the money they're holding for.

Its the politicians that care about things like M2 because it gives them a big knob they can turn to "fix" the economy. The big open secret is that for politicians, doing something - even if it is actually the wrong thing - is better for their career than doing nothing - even when that's exactly what they should do.

The market will set a price, but if I want to hold some savings long-term, I want to know if someone can suddenly resurrect a large number of very old coins and devalue my holdings.  It's not a problem now with most coins in active circulation, but what happens if we end up with a large majority of stale coins?  It's not good for confidence.

But the market price already takes that into account.  When I am investing, I know that there are 2-3M coins that are still sitting dormant in their generation blocks.  I know that someone could take those out, and drop the price.  And maybe that's part of why BTC's are only worth $5 instead of $10 right now.

So yes, it decreases confidence, but confidence would be even lower if people knew they could lose all their money if they didn't touch it for long enough.

Yup.

There are two possibilties, both bad, but the impossible one is less bad. lol

Time machine: Convince Satoshi to pick an arbitrary expiration.

Change it now: Just terrible. Wrecks confidence in two ways. Savings are less secure and require work to maintain AND you don't know how much less secure because whatever voodoo the changers did might be used while you are on extended vacation to reduce the time even more.

Thank you, Gavin!
I assume that is your last word, although not the last time you have to pronounce it.

NO

Stop trying to mess with Bitcoin and our savings, no one would accept that bullshit.

Go make SergioCoin if you want idiot rules, i like Bitcoin because no matter what, i won't lose my Bitcoin. Your suggestion is idiocy, doesn't make sense and is totally useless.

In case it is not clear: NO

Some of the responses here were quite harsh, and I think your post, as opposed to many similar posts, deserves credit for identifying and addressing some of the issues.

But the point remains. There isn't much of an upside, there is absolutely no problem with coins that are lost. Recycling certainly does hurt many, many ways of using Bitcoin (think for example about Casascius physical bitcoins, or wedding rings with a private key).

More importantly, even if the modification was advantageous at face value (and could be used in an alt), the economics of Bitcoin must never be changed, as that would destroy the Schelling point "the economics of Bitcoin will never be changed" which is the source of the confidence in Bitcoin investments. While more benign than relaxing the 21M cap, destroying bitcoins and creating new ones to replace them is certainly an economic change, and is thus ruled out.

And this is also a good opportunity to point out that the technical means to achieve the economic principles are fair game, and must change as needed if Bitcoin is to succeed.

If the suggestion is shit, i say that it's shit, why should i lie?

Basically he is suggesting to steal people savings  ::)

Unless someone explicitly agrees to follow Crockers' rules (http://wiki.lesswrong.com/wiki/Crocker%27s_rules), how you say something is as important as what you say.

Can I assume you never said anything wrong in your life, or that you had no problem being humiliated when you did?

Crockers' rules are fine for Wikipedia where it is about facts and truth. Whilst nobody can sanely claim to own such things.
Think of or talk about or even dare to touch my property, but then don´t cry if you can´t stand the response.

Interesting,nobody takes into account tech progress and advances in computing. It may be feasible to recover lost bitcoins by cracking the blockchain by quantum computers in, say, 50 years. Of course, official btc will be moved to more secure hash algo,but as long as there will be path to move coins to new quantum blockchain, someone will inevitably use quantum computer to crack lost coins from old blockchain...and thus the problem will be solved itself!

Welcome on the internet, where people will say what they think  ;) If i say an idiocy i expect people to tell me it's an idiocy.

Thanks Meni Rosenfeld for your support.

I didn´t get angry, I was just a bit ironic. I don´t mind Gabi´s comments, he may be right, and the idea of returning coins is bad. It was not my idea, anyway. It was Hamacher, & Katzenbeisse, as I said.

Though I (as most of the people of the world) would like to be treated politely. Gabi is probably a (clever) teenager. Teenagers tend to talk like that. 

I see trees of green, red roses too
I see them bloom for me and you
And I think to myself, what a wonderful world
...

Regards!

It's not theirs either. Here (https://bitcointalk.org/index.php?topic=20799.0) is a June 2011 reference to it, and I doubt it's the first.

We take it into account, occasionally... Even without QC stuff, ECDSA could very well be broken. I wonder what is the proper procedure to handle this - let the first person to build a working ECDSA breaker take all the lost coins? Or, when cracks in ECDSA are found, set a widely publicized expiration date that would force long-term savers to move to a secure address, while keeping truly lost coins lost?

Bitcoin is based on the idea of a fixed money supply which relies on divisibility a lot. Fundamentally it really doesn't matter if we have 21 bitcoins, 21k bitcoins, 210k bitcoins or 21 million bitcoins in existence, their divisibility matters. I for one will be very happy for each and every lost coin, it will increase the value of my Bitcoin savings. :)

In the long term, lost coins will be mined (because wallet security will be easy enough to break for future hardware). All you will have to do to keep your bitcoins savings wil be to move it too upgraded wallet.

Is there a way to find out how many coins haven't moved since bitcoin reached parity with the USD? I'm assuming that's about the time that people started to take their BTCs seriously.

Can you imagine how many wallets/BTCs people have lost in the first few years, thinking this was just an interesting fad before formatting their drives?



The consensus is that this won't happen within our lifetime.

We are talking about time frame of only ~ 2 years till bitcoin gained significant value. I really don't believe that large part of computer-savvy users managed to lose their wallet.dat in such short time, do you?

What consensus? Citation needed...

Losing their wallet.dat? No. But no caring about it and forgetting it was even there? yes.

I'm not saying they lost them by accident, I just don't think they took the project seriously enough to keep an interest in it and backed up their wallets. And a gain, that doesn't go for ALL the miners in the first few years, just some. I've lost quite a few SolidCoins simply because I never took that cryptocurrency seriously.


That's just what I took away from this thread. (https://bitcointalk.org/index.php?topic=78471.0) Feel free to worry about it if you wish, but I'm no longer concerned.

You're confusing brute-forcing a private key, which is impossible, with breaking ECDSA and being able to find private keys (or to create signatures) without brute-forcing, which may be possible and not all that unlikely.

But contrary to Raphy's comment, this is a software problem, not a hardware problem.