Bitcoin Forum

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2 million Bitcoins get invested into a future economy by Satoshi. Wealth is produced.

God help us all.

...or imagine 2 million Bitcoins being sold into hands that actually want them at prices they are willing to pay over others. Let's try not to think what would happen if the market allocated the resources to better hands at proper prices.

Those 2 million Bitcoins should go to hobos to spend on dirt.

Can you tell us the average age of an unspent block reward coin?

...Atlas?

These cannot be mined in pools, right?  Only solo miners can hoard the whole block reward. The "unknown" (presumably the sum of solo operations) typically represents 15%-30% of the hashing power, http://blockchain.info/pools?timespan=4days

From your data sorted by age it appears that in the past year or so only a few percent of blocks ended up unspent.
As we go back in time this goes up to 40-50%.  Seems like the change takes place with the advent of GPU and pooled mining.

Provisional yet shocking conclusion: miners hoard a lot, but your method only reveals hoarding by solo miners.

I would be curious to see the same age of unspent blocks data but from a 6 months ago perspective. A year as well. These might show us how recently the older coins first moved and how the recently unspent block percentage is changing.

can you give some estimation for how many wallets or different keys these coins belong to

I mean,
can it be seen if those are in hands of a few owners or many ?

They are fresh coins. If they were all mined on fresh adresses (which is likely) it's impossible to link them together.

There is a thread where some folks enumerate their lost coins due to data loss or hdd formatting etc - maybe that would have insight into some of the blocks in this list.

These never been spent coins are often on my mind and I wonder when if ever will they get spent. The potential to cause serious damages is huge if someone decided to foolishly dump all of them but I can't see someone doing that. I sometimes also speculate what the chance might be that the owners of these coins, mainly Satoshi, have deleted their private keys and actually on purpose lost the coins.

The first Bitcoinusers did think of Bitcoin as an Prototyp. It was a Toy, they didnt save the coins, and i think Satoshi didnt save his first coins too.

In my opinion, at least 1 million coins from those 2 Million are lost.

50% is what I'd estimate as well.

But either way, even if you assume all 2 million are usable, the fact that they weren't sold on the run up to $30 or on the current 4-fold move from the last bottom, probably tells you that they are in strong (wise?) hands that are thinking very long-term, and which see Bitcoin as a store of value.  If anything, a high number of slow-moving or non-moving coins is a very positive statistic, in that it validates that Bitcoin is behaving similarly to gold, with a stocks-to-flow ratio higher than just about anything else.

Smart enough to invent a new currency whose production runs out within the creator's lifetime, but too naive to think that they could ever be worth something? Unlikely.

I concur. I think people are waiting for the market to mature. I see it as a bullish sign. Why sell now if you can get more later?  Could 2 MBTC be sold?

According to bitcoincharts...yes, 2 million coins could be sold:

Sell 2000000 BTC for 1987718.05 USD...or about a buck a piece.

Satoshi's a patient guy.

I made a "coins not moved" graph last year (for a thread regarding the mystery miner: https://bitcointalk.org/index.php?topic=37422.msg459385#msg459385):

https://i.imgur.com/kVNsB.png

ThomasV (I guess) has made an interactive graph showing roughly the same (I guess) data (move mouse on chart):

http://ecdsa.org/stats.html

Satoshi's dead.  There is no other explanation.  Why else would he disappear so suddenly, and without saying fair well to the community.   It was a sudden death like being hit by a bus, or drowning, or a heart attack.  If it was cancer or something that takes its time, he would have told us, and he would have transferred his coin to a successor.

RIP Satoshi Nakamoto
??  -   2011

According to Gavin, the primitive code was not neat or professionally put together, it just work, and it was obvious that Satoshi was no coder. Past him inventing the initial code, it was taken over by the current developers and I don't see why it's hard to believe one guy had the initial idea and implementation.

Satoshi likely left in fear of someone finding his identity. People seem to be able to locate his likely origin country by his vocabulary and how he types, though I can't remember which country it is believed to be. To my knowledge he didn't just vanish, he was in private conversations with Gavin. Once he was confident in Gavin taking over the development side of the project, and considering Gavin and/or others were likely better with the code anyway, there wasn't much left for Satoshi to do besides disappear into the background and watch his baby grow.

Interesting theory...did no one really know _anything_ about him? Surely someone knew something...if no one really knew anything, then I doubt he's dead...he was always planning to disappear.

Naw, he got Gavin to agree to take the lead before he left. I mean it is possible that he knew he was dying or something, but it's clear that he didn't just get hit by a bus one day.

Try again. The last reward reduction from 0.00000001 down to 0.00000000 is slated to be in about 100 years from now.

Did he say why he was leaving? Glad the dude didn't (presumably) die suddenly.

Ok, whose production effectively runs out in the creators lifetime...but let's not argue the trivial. Etlase2 is right.

Are you attempting to assume that the future value of 0.00000001 will be equal to or less than its current value? For all we know, in years 2108-2112 such a denomination could be worth quite a lot.

But then of course by then they could have invented lifespan-extending drugs or something. So what do I know.

1 Satoshi probably won't matter to someone who has 10^5 Bitcoins...but I doubt I'll live to see the day where a Satoshi actually could buy something common. I'd love to be wrong, but I think the math is on my side.

I made a quick-and-dirty plot showing the fraction of unspent coins (from Znort's data), Gox price (from bitcoincharts.com), and difficulty (roughly estimated from plots on bitcoin.sipa.be):

http://3.bp.blogspot.com/-OIKdxWb4oNE/UB7YWnJXG8I/AAAAAAAAAAQ/3yNGZM6sXXA/s1600/Capture.PNG

Several interpretations (some contradictory, some compatible with others) come to mind:

• Early miners didn't care much about then-worthless coins, and many of early coins are lost
• Early miners hoarded their coins as they didn't have to sell them to make up for the production cost; mining was dirt cheap (but so were the coins)
• Miners generally hoard about 30% of their coins, however with the advent of pooled mining block rewards had to be spent first (even if earned fraction is then hoarded by individual miners) - and this shows as drop in hoarding
• The nature of mining changed with the advent of SR: many newcomers set up mining operations specifically for SR purchases (freshly minted coins are significantly more anonymous then exchanged)

Any other thoughts?

I think your interpretation that the nature of mining operations changed is spot on. Only a few people can afford doing single mining, where they can keep the block reward locked into an address.

It's interesting that when most coins were spent, the low in price was about a buck (or 2)...currently the price is rising as the percent unspent goes up...but if 2million coins were sold, the price would be about a buck again.

That was my impression.

Interesting that someone mentioned pooled mining, since I didn't think of that. Wonder if you can tell how many blocks have been spent exactly one times and then haven't moved after that?

Not sure how pool operators do it - with payout thresholds and all. I suspect it's more than a single move from the block reward to the miner's payout.

It would be neat to have code that could query the block chain and plot the number of bitcoins unspent (or spent a certain number of times or less) within a certain time frame (ie, since generation, last 6 months, etc). A 3-D generalized version of this would be very informative.

I think the theory that satoshi felt violated by Gavin going to the CIA only a week or so after satoshi gave him the bitcoin "master key" makes the most sense.

http://forums.microcash.org/topic/529-did-gavin-andresen-push-satoshi-out-of-bitcoin/

http://en.wikipedia.org/wiki/Len_Sassaman  there is one theory that he was satoshi.

Interesting.... [tinfoil]

OK, So here's a wild-ass theory:
~April 25th 2011: Sassaman (Satoshi) sends Gavin the "alert key" to Bitcoin.

April 27th 2011: Gavin publicly announces CIA visit in June. Satoshi ceases communicating with Gavin. (on the run?)

June 15th 2011: Gavin speaks @ CIA

July 3, 2011: Sassaman dies, in an apparent suicide. His wife was in Texas at the time. (twitter status (https://twitter.com/maradydd/status/87586809818775552))

Did the CIA assassinate Satoshi?
[/tinfoil]

I'm not thinking he was Satoshi -- he had a lot of negative things to say about Bitcoin -- albeit in a dispassionate, factual manner.

http://twitter.com/lensassaman/status/81084436518674433
http://themonetaryfuture.blogspot.com/2011/07/len-sassaman-on-bitcoin.html

Sure doesn't sound like a proud father talking about his baby, that's for sure. No one would design Bitcoin the way it is if he knew the kinds of things Sassaman did.

Not to downplay Satoshis achievement, ingenuity and balls to pull it off, but many of the things bitcoin is made up of have been invented before by other people (sha, public key crypto, ecdsa, proof-of-work, ownership tracking using transactions).

I think he did it himself. I'm sure he talked about it with some crypto-friends or colleagues who probably understood how it worked but said either: "That's not new, dude, look at my stuff, it's much more interesting" or "this will never catch on". So he grew a pair and pulled it off. Kudos!

eligius pays out using the generating TX in mined blocks. Dont' know wether these show up in znorts analysis?

I agree with znort987 - Satoshi Natakmoto was most likely a Nicolas Bourbaki. At a guess, a good proportion of of those 2e06 btc is in their hands.

Nice charts.
2009 - mining and hoarding
2010 - mining, and some half of the 2010 coins transacted
2011 - some more of the 2010 coins transacted, during the bubble of Jun 2011 also maybe 20% of the 2009 coins

It suggests the miners of 2009 are big hoarders. They only transacted something during the bubble, probably to cash-in carefully.

that's the way I see it, too. Still, the theory that at least some of the 2009-coins are lost cannot be discarded.

It it was really a team of people, someone from the team would have said, "Hi, it was me" by now.

Yes, smart and patient people do exist. Let's not prematurely take the credit from Satoshi.

Good question.

I think the "potential to cause serious damage" is vastly overblown. An individual or group who held lots of coins could, at worst, cause a very sudden drop in price. However, doing so is A) very costly and highly disincentivized and B) can only be done once.  The second point is the most important. Say someone drops a million coins on the market, it would crash the price, everyone would freak out. Then, the price would find a new equilibrium, rebuild, and we'd go on about our business... and the attacker wouldn't be able to attack ever again.

For anyone who understands the true value of Bitcoins, a huge dump on the market is a blessing, and anyone doing that nefariously becomes impotent afterward.

evoorhees nailed it.   There are only 2 mil coins which have never moved and arguably at least some of them are lost.   The remaining coins are held by multiple people.  Even if they are all spent recklessly at most we are talking about 20 or so 100K BTC plunges.   While bad it is hardly fatal.  As time goes on it becomes less of a danger.  The market depth for BTC is continually increasing. An x BTC reckless sale today will have less price movement than a year ago and hopefully in 1 year, 5 year, 10 years it will be increasingly less.

I think it is highly unlikely that there are many people (if anyone) out there just sitting on stashes of 100,000K+ coins. At the current market value, that's over $1M USD. Unless they are already a millionaire several times over, it doesn't make a lot of financial sense to have a savings account that large in something as volatile as BTC and not gradually draw down on it to buy food, homes, entertainment, whatever.

Someone would have to be extremely confident in Bitcoin's long term value not to use some of that today to improve their lifestyle. Bitcoin is still an experiment, so I think when anyone approaches the threshold of having the majority of their wealth in Bitcoin, it's too risky. Ask yourself, if you had 10-20 years worth of income (assuming 50-100K yearly income) stored in BTC (even if you earned it cheaply through mining), would you still risk it all on Bitcoin's success? Or would you at least enjoy some of that now?

That would be awesome, but I think it's not the case. However, I don't think it's going to backfire badly, as evorhees and deathandtaxes have argued.

To me then the interesting remaining question is if fraction of hoarded coins really dropped, or this finding is merely an artifact of pooled mining. Even if latter is the case, ~30% of mined coins are still being hoarded, and ~70% are actively traded for goods, services, and fiat.

How does this compare to gold? Is it even a fair comparison - with bitcoin mining being so deterministic, unlike gold where (especially in the early days) you had to rely on luck?

"pristine coins" as if one coin is better than another. I guess numismatics can happen in bitcoin but I rather think that's retarded. If it floats your boat to pay a premium to have 1 bitcoin from the genesis block...have at it. :D

That would require Satoshi to spend that coin, and even assuming we can find him to do so, that would ruin the "numismatic" value of it. The "pristine" nature isn't in that it's any different from any other coin, it's that the address it's sitting in is not linked to known transactions, and thus, is significantly more anonymous than a previously spent coin.

It's not possible to spend coins from the genesis block.  To make it possible would require everyone to upgrade their client to a version which makes it possible.  If a group of people didn't upgrade, they would be on a fork of the blockchain as soon as the genesis block's coins were spent.

Is that the case just for the genesis block, or other very early blocks too?

From what I understand, this limitation only applies to the generation transaction of the genesis block. Transactions sent to the "wishing well" could be spent.

Just the genesis block (http://blockexplorer.com/b/0).

What's this about a wishing well?  Went over my head, that.

Some people pretend the genesis block 50BTC address is a wishing well..  :D

This is all from the cryptography discipline though. If you were a real crypto geek you'd probably be aware of these things at least in passing. There was a thread questioning the thought behind using the double SHA hash, with I think the best guess being "it made it initially slightly harder" but the difficulty would have taken care of that anyway. However, I believe it is Applied Cryptography that mentions the potential length extension attack on SHA2 and it is eliminated by double hashing. Though the attack doesn't apply to bitcoin, it's possible he did it just in case. As far as ECDSA, it has inherently reduced the problems of large RSA keys; nothing in particular that Satoshi did there.


Cryptography's use as a digital fingerprint is something that has been combined with the idea of contracts since the first digital signature algorithm. As far as the economics just working, that absolutely remains to be seen and is not proven by a bunch of vague phrases. Especially given the evident pyramidal nature of coin distribution.

With that all said, I would not be surprised that several people did work closely on the project.




But an individual or group who was a bank that lent lots of money could, at worst, stop loaning money and cause a very sharp increase in price, buy up lots of stuff, and then start the process all over again.

Check it out: http://blockexplorer.com/address/1A1zP1eP5QGefi2DMPTfTL5SLmv7DivfNa <-- address of the genesis block's generation transaction.
While the 50 BTC can't be spent, it should be possible to spend the additional 6.57403164 BTC.

Interesting.... didn't pirate say something about taking the price down to $1?

Oh, I see.  Yes, that's my understanding of the situation as well.

I recall reading that too. I guess we know how many btc he controls.

Actually, there are some really unfortunate flaws in how Satoshi implemented Bitcoin that the developers have had to work around, at least one of which I'm not really meant to publicly talk about yet (or even know about in the first place for that matters).

Well, the issue has now been announced by forrestv, who discovered it: https://bitcointalk.org/index.php?topic=102395.0 Design flaw in the way Bitcoin computes merkle hashes that allows an attacker to create invalid blocks with the same hash as valid blocks. Can be used to carry out a 6+ confirmation double spend with essentially no computational resources. Very feasable attack from what I can tell.

Why is it that the coins mined in the genesis block can't be spent?

Because it wouldn't be fair: there are no miners to compete for the reward. One more thing about Satoshi.

Lots of smart people around here.

Sorry, I meant technically what prevents it. But I think the answer is in how the client deals with the block. Yea I agree Satoshi is/was awesome :)

or: lots of extremely careless ones ;) (although I doubt it)

nahh it is a nobrainer.  ;) like buying a call option (with say 10-20 years before expiration) or shares of a 5$ stock (with known dillution schedule) that has decent chances to go to 10 000$. and with no counterpart risks.

Just try to value Bitcoin like a stock. It easily worth 100-200$ right now.

Hi,

I requested to Piuk from blockchain.info to create a new chart for addresses without activity, see: http://blockchain.uservoice.com/forums/152743-general-ideas/suggestions/3177586-new-chart-for-addresses-without-activity

I value a bitcoin the same way I value a stock - current market price:

about $12.50.

But I understand what you're getting at.

That is a lot of money. Hopefully a large chunk of those are simply people that have faith in the market and are waiting for a more stable time. I can't see someone dumping them all on the market at once. It would make their hoard useless.

:-D Looks like some smartass has sent a message at 9.11 2012 ~5am to the genesis block address:

01010101 = 0x55 U (0x55 start symbol?)
01100010 = 0x62 b
01110100 = 0x74 t
01100011 = 0x63 c
00100000 = 0x20
01101001 = 0x69 i
01110011 = 0x73 s
00100000 = 0x20
01100001 = 0x61 a
00100000 = 0x20
01110011 = 0x73 s
01100011 = 0x63 c
01100001 = 0x61 a
01101101 = 0x6d m

---------------
17gNvfoD2FDqTfESUxNEmTukGbGVAiJhXp

Can you make an analysis to check if these coins really are lost:

"Bitomat.pl Loss
Time: 2011-07-26"
https://bitcointalk.org/index.php?topic=83794.0

Or maybe someone has been able to actually spend them after 'losing' them?

If the private key is lost, it's prohibitively expensive (both time and effort) to recover it (you need to guess). Equally expensive as recovering the private key to any address. Not going to happen. Lost is lost, you can subtract the lost coins from the bitcoin money supply.

I lost BTC 10 myself ;).

Thanks for link to interesting thread.

Is it possible to "expire" coins after a certain amount of time?
That introduce an upgrade and deploy it after 2-3 years when the network is ready? While the expired coins will be a reward of the new block. And encourage mining after the reward becomes lower and lower.
(I am new here, just thinking about it. Please don't blame me.  :D)

"Sorry, your pension savings and child tuition money adresses have expired."

No thanks.

Yes, of course, if it really is lost... ;-) But could we find out, if the claimed lost coins has actually been used afterwards? Just by examining the block chain?

Of course we could find out. Just enter the address into blockchain.info.

We do not know the address(es). But we know the amount; there should be about 17000 lost coins, which has not been used since 2011-07-26. Is there a spike in the amount of 'not-used-coins' at that time?

Edit: of course, we could also ask some of the addresses from their custromers.

Well, actually there seems to be a spike in amount of lost coins around 2011-07-26.

I thought that was just a theft...

And since there is asymmetrical information which means the efficient market hypothesis is flawed resulting in price being what you pay and value being what you get .... then good luck with that strategy.

An animation would be nice. I wonder how much activity is going on down there in the blockchain.