I suppose it is if an immature currency wants to pretend it's all grown up. The reality is, a "wait and see" attitude is what's causing it to not see some action. The bottom line, this thing is going to move violently next week. Most likely, in both directions. That's the way it should be, for some time to come.

It's a long way from being a mature currency, with a stable valuation.

I'll answer your question. I don't hold Zimbabwe currency or currencies like it. On the other hand, some currencies are rather stable, and are fine for holding for periods of time. Bitcoins, while volatile, are an interesting investment, and there's a strong chance they will rise significantly. But in the end, they will become unstable.

Given a choice, I would much prefer to hold a version of Bitcoins that requires a heartbeat, for the reasons clearly stated above. I would have zero fears of losing it.

Why the preference?

I know all about Zimbabwe's currency. That's not the point.

The point is: what would you do if it was the far future and the apparent circulation of Bitcoins is about 1,000, and as a result, due to the public's general fear that 10,000 or even 100,000 Bitcoins could be dumped on the market tomorrow, people, in general, when receiving payment in it, immediately cash it out for something else, driving its value down even further? Would you place much of your wealth in it? Would you be so confident that nothing might happen tomorrow?

Or, would you prefer a version of Bitcoins that mandates heartbeats, thus ensuring the above situation could never occur for all time?

True, but there is only one entity that could dump a quantity that is many times the current number of dollars in circulation, and they do have an interest in not doing something too drastic.

In the case of Bitcoins, as the ratio goes towards zero, the number of entities that could dump an amount many times Bitcoin's perceived circulation onto the market will be unknown, and their motivations will be unknown.

This isn't really true. Towards the end of Bitcoin's life, the ratio goes towards zero, which means that a near infinite change can occur.

However, if some form of the heartbeat is implemented, then things really are good.

To everyone,

The issue is increasing uncertainty, which progressively renders Bitcoins an unreliable vehicle for commerce activities and storage of wealth. The reason why is stated in this thread more than once.

It may take near an eternity for that uncertainty to become a real issue, but the mathematics are sound, which calls into question whether a system really needs increasing uncertainty designed into it. The solution is to require Bitcoin holders to connect to the network in some form or another, probably on a timeframe on the order of several years or even decades. This is not unreasonable. We all live with this requirement in regard to bank accounts today anyway, without feeling overly burdened.

It is one thing to accept that a currency may become unsound in the future because of external events. This is reasonable. However, it is questionable that a currency, by its own internal design, should be allowed to become more uncertain over time precisely because of its own internal design.

I totally don't understand what you're saying, at all. Bitcoin attrition will happen until there are no more Bitcoins. It may take a million years, but it will happen. As loss occurs, uncertainty increases. That is a problem.

Sadly, and with my tongue planted firmly in my cheek, I would like to say that I have not seen my account blossom with generous donations, as of yet. But I feel now is the opportunity for me to humbly request a donation of any size, if for no other reason than to see Bitcoin commerce in action.

So, there you have it. Donations from any who wish to donate are welcome! My address is below!

It is guaranteed that the number of total number of lost Bitcoins tomorrow will be greater than or equal to the total number of lost Bitcoins today, until the end of time, or until there are no more Bitcoins. There is no point in disputing it. We can argue all day long about what the rate of loss will be, but we'd only be guessing.

We also have no idea about what the future holds for methods of saving wealth, but let's assume that there will at least be the following places in which your wealth can be stored:

• Material items: land, gold, products, etc.
  
• Currencies
• Securities

If Bitcoins are successful, then we can assume the following:

• some individuals will store none of their wealth in them
• some individuals will store some of their wealth in them
• some individuals will store most of their wealth in them

Based on the discussion here, it should be clear that the chance of the Bitcoin supply suddenly and rapidly increasing by a huge amount relative to its perceived supply is much greater in the future than it is now. Given that, the repercussions are obvious: if such an event occurred, Bitcoins will be worth much less. In my second bulleted list, it should be obvious which group will be unaffected, and which group will be wiped out.

Given that the third group in the list will be wiped out, logically, they won't exist, if they are prudent. From that, it follows that over time, the notion that Bitcoins are a prudent means of storing wealth will lose traction.

Yes. But I would say that the third bullet need not be just one wallet. Collectively, the unknowns becomes greater over time, and that leads to the fourth bullet.

It seems to me that a well designed system would attempt to maintain as relatively constant over time the dynamics of the system. By that, I mean, behavior. I am in no way implying that the valuations should be constant, only that, collectively, valuations made today, or at any point in the future, no matter how far, are made with information that is relatively uniform in quantity. Granted, some noise and fluctuation in the quantity of information is expected. But the system should not be designed with the built in guarantee that uncertainty will increase over time.

No, that's not it. I will not keep repeating myself. Read my replies. Especially those that discuss ratios and uncertainty.

Automatic methods do exist:

https://trading.scottrade.com/Login/PasswordResetRequest.aspx?lang=en

https://us.etrade.com/e/t/user/resetpasswd

In the event that the TradeHill team is reading this thread, I realize my above comment may sound a little abrasive. I do realize that setting up a secure site is not easy, and you should be given credit for launching the site.

However, there are standard practices when developing sites which allow individuals to sign up, and when dealing with money, instilling confidence in the users is important.

I would suggest that the two items enumerated in my initial post be addressed.

After that, I think a review of this thread ( http://forum.bitcoin.org/index.php?topic=20720.0 ) would be worth your while. It is an evolving document which makes suggestions for exchange developers.

Notes about TradeHill:

Let's just suppose you forgot your password. Where on the site can you request that a new one be emailed to you? Using the contact option is not good enough, as it does not sound immediate.

Let's just suppose your email address is greater than 30 characters. How do you sign up?

Given these two huge oversights, one wonders what is going on inside their trading engine.

Read the replies. Bitcoin divisibility has nothing to do with the matter at hand.

Clearly, you have not read my replies if that is your response.

How ironic.

Because when the ratio is near zero, the number of Bitcoins in circulation is small. It is so small, that some discovered dormant wallet can be huge by comparison, which can have a drastic effect on the wealth of all current users of Bitcoins. There is no way to know what might happen, but it is certain that it could happen. Because it is certain that there is extreme uncertainty when the ratio is near zero, there is little inclination to put faith in Bitcoins.

But conversely, when the ratio is much larger than one, as it is now and as it is in the beginning stages of any protocol that does not allow reclaiming of inactive wallets, then we operate with the knowledge that most coins are not lost, and thus can be put into circulation.

This is not difficult, but it is important to understand.

Do you know what happens to bank accounts after seven years of inactivity?

So, please address the following two points:

1. Show that somehow, the ratio will not approach zero, as I claim it must eventually.
2. Assuming you cannot address point 1, show that the currency is usable when the ratio is near zero.