Lost Bitcoin and possible future scarcity

[kotajikikox]

• do you think lost Bitcoin can cause Bitcoin scarcity in the future?

The halving and loss of bitcoins are almost similar.

Just the halving tends to increase the value of bitcoins by reducing the number, scarcity due to loss of bitcoins also reduces  the number of bitcoins available too, and as usual, a reduction in the available bitcoins will greatly affect positively the value of bitcoins available

Halving is not primarily done to increase the price of bitcoin but it is only a consequence of such. Halving is done to counterattack inflation and in the process of it the bitcoin price hiked up.

This is due to the common and very well-known economic concept that less suppy = more demand. The rarer it is, the more expensive it is. On the other hand some bitcoin who are lost well they were just lost unless some people actually burn some coins to hike the price up.

[dzungmobile]

Halving is not primarily done to increase the price of bitcoin but it is only a consequence of such. Halving is done to counterattack inflation and in the process of it the bitcoin price hiked up.

This is due to the common and very well-known economic concept that less suppy = more demand. The rarer it is, the more expensive it is. On the other hand some bitcoin who are lost well they were just lost unless some people actually burn some coins to hike the price up.

Halving does not make Bitcoin deflationary in its circulation curve that is still inflationary.

How is the 21 Million Bitcoin Cap Defined and Enforced?

Halvings are like events to shock Bitcoin miners, weak hands will be shaken out; and to advertise Bitcoin on media with noise from halvings. It helps to bring Bitcoin to more people and convert some of them to Bitcoin investors. With more new investors, new capital, higher demand, price will increase.

The math is demand usually increases more than x2 and this helps price to rise more than x2 with each bull run after one halving.

[Solosanz]

In addition, here are ...

• Transferring to the wrong network or address (though some wallet software can detect this and notify the sender before the button is hit)

You can't send Bitcoin to invalid address because Bitcoin address has a checksum. By the architecture, Bitcoin already help the users to not send to wrong address since you can only send your coins to valid address (although it could be an address that you can't access.

In addition to your list, I will add "centralized exchange" as one of the reason why people lost their coins, when CEX bankrupt, people can't access their coins anymore.

• Seed phrases should never be memorized, nor written on a mobile device or computer. They can be written on paper or in a book that shouldn't be visible to external members and should be strongly protected.

Remember, ink can fade over time https://bbs.boingboing.net/t/which-inks-fade-fastest/96814

[kryptqnick]

Op is correct that it's hard to evaluate the number of lost coins, since we don't know why some wallets are inactive. I think of them as just inactive, and I don't view them as lost forever.
As for Satoshi's coins, we shouldn't focus on someone else's money.
Bitcoin is scarce by design, which will drive its price up if more and more people want to get some of it. But, thankfully, each Bitcoin is divisible into 100 million satoshis, so we can actually just refer to satoshis rather than bitcoins in the future if the price becomes that high and satoshis become a more relevant indicator of prices. So the issue is not as serious as it might seem at first glance, even if a significant part of coins is lost.

[0t3p0t]

1. Do you think all dormant wallet (long inactive wallets) are gone forever?
2. As we are not certain of Satoshi's return, should we be bothered about his dormant wallets?
3. do you think lost Bitcoin can cause Bitcoin scarcity in the future?
4. From a total of 21million total supply, can you attempt a prediction guess of the total number of Bitcoin that would be in active wallets after all Bitcoin has been mined?

1. Not all but majority of those long inactive wallets are gone forever for some reason.
2. Nah, if ever those dormant wallets will remain untouched or even moved then it is considered as burned Bitcoins that might help the scarcity of it.
3. Yes of course no doubt about that.
4. I personally have no idea on this but maybe it's more or less 15M Bitcoins.

[Felicity_Tide]

According to speculation, we are made to believe that Satoshi owns over 1 million Bitcoin, whereas according to the real time value of the total circulating supply of BTC at the time of writing this post is said to be 19,696,950 BTC,  which means if we are to subtract Satoshi's acclaimed 1 million BTC, what will be left for both lost+unlost BTC currently in circulation will be 18,696,950 BTC.

I actually came across this speculation and wanted to use it in the post, but I thought it would be too contradicting as I don't have enough evidence to back it up. It's really good that you pointed this out.

You are totally right from your calculations. Assuming we are to subtract the speculated 1 million Bitcoin owned by Satoshi, then that's literally a significant amount of subtraction.

1. Not all but majority of those long inactive wallets are gone forever for some reason.
2. Nah, if ever those dormant wallets will remain untouched or even moved then it is considered as burned Bitcoins that might help the scarcity of it.
3. Yes of course no doubt about that.
4. I personally have no idea on this but maybe it's more or less 15M Bitcoins.

I agree with the 15M value as I perceive that Bitcoin loss would keep happening even after halving. But that would be a reckless action from anyone who does that in the future when Bitcoin price is already above $200K.

Op is correct that it's hard to evaluate the number of lost coins, since we don't know why some wallets are inactive. I think of them as just inactive, and I don't view them as lost forever.
As for Satoshi's coins, we shouldn't focus on someone else's money.
Bitcoin is scarce by design, which will drive its price up if more and more people want to get some of it. But, thankfully, each Bitcoin is divisible into 100 million satoshis, so we can actually just refer to satoshis rather than bitcoins in the future if the price becomes that high and satoshis become a more relevant indicator of prices. So the issue is not as serious as it might seem at first glance, even if a significant part of coins is lost.

Very correct. Evaluating the number of lost coins can be very difficult, and it would be also wrong to think that all inactive wallets that holds Bitcoin are long lost. Recently, a long inactive wallet just made a transaction, which means it is certain that others might still safe.

• do you think lost Bitcoin can cause Bitcoin scarcity in the future?

The halving and loss of bitcoins are almost similar.

The two of them just finds a way to trigger scarcity

[dothebeats]

• Seed phrases should never be memorized, nor written on a mobile device or computer. They can be written on paper or in a book that shouldn't be visible to external members and should be strongly protected.

Remember, ink can fade over time https://bbs.boingboing.net/t/which-inks-fade-fastest/96814

And this is why you make multiple copies and store them somewhere safe, create new ones after a certain amount of time and repeat the process until you die or probably be unable to do it. It's a pretty straightforward approach to keep your funds safe, and even if inks fade, it will take a long ass time for it to do so, and you will always have time to replace those writings and create new copies of your seed/passphrase.

[sokani]

Do you think all dormant wallet (long inactive wallets) are gone forever?

No, there are two possibilities. It might be that the owner has lost the private keys to the wallet or he's not yet ready to sell the Bitcoin.

As we are not certain of Satoshi's return, should we be bothered about his dormant wallets?

Satoshi is not coming back to take ownership of Bitcoin, and I don't know why he hasn't move his Bitcoin all this years but I'm not really bothered about it. I believe there's a reason he left it there, he could have just use a mixer and send it to a new address.

do you think lost Bitcoin can cause Bitcoin scarcity in the future?

Yes, lost Bitcoins are lost forever and will help to increase scarcity just the same way altcoins are burnt to reduce supply and increase scarcity of the token.

[Stalker22]

I agree with the 15M value as I perceive that Bitcoin loss would keep happening even after halving.

What do you mean by "even after halving"?  You know that this is neither the first nor the last halving?

Very correct. Evaluating the number of lost coins can be very difficult, and it would be also wrong to think that all inactive wallets that holds Bitcoin are long lost. Recently, a long inactive wallet just made a transaction, which means it is certain that others might still safe.

Wait, a minute ago you were cool with a value of a 15 million Bitcoins? Whats that based on? You literally just admitted it is hard to estimate this thing!

[AmoreJaz]

• Seed phrases should never be memorized, nor written on a mobile device or computer. They can be written on paper or in a book that shouldn't be visible to external members and should be strongly protected.

Remember, ink can fade over time https://bbs.boingboing.net/t/which-inks-fade-fastest/96814

And this is why you make multiple copies and store them somewhere safe, create new ones after a certain amount of time and repeat the process until you die or probably be unable to do it. It's a pretty straightforward approach to keep your funds safe, and even if inks fade, it will take a long ass time for it to do so, and you will always have time to replace those writings and create new copies of your seed/passphrase.

That is true, you can always find a way how to create copies of your seed phrases and secure it. In this forum, there are even threads how to safely and securely store your keys, your options on how to implement it. Below are just few of the threads that you can read related to this topic. But for sure, it is hard to memorize your keys and expect that you won't forget those keys.

How best to secure your Private Keys and/or Seed phrase
HOW DO I SECURELY STORE MY BITCOIN AS A BEGINNER?
Crypto Security - Additional Protection For Your Seed/Private Keys.
How do i make sure my Bitcoin Private Key is Random and secure?

[AprilioMP]

Answers to discussion questions.

• I do not really know whether it is lost forever because it is still possible that the owner of the wallet who is inactive due to the death of the owner has submitted or inherited a private key or seed phrase to other parties who are trusted.

It is likely that if upon the death of the owner, there was no hand over of seed phrase, then it is lost forever.

If the owner does not have time to submit or leave it to the person he trusts, then it can be justified disappearing forever. If the owner before dying could store well the private key or seed phrase in a special storage, it is likely that one day someone will meet him.

To avoid losing access forever, I chose to save it somewhere if I did not have time to pass down to the parties that I believe.
Bitcoin is a very important inheritance to be inherited.

I remember the guy who lost his drive where he had his bitcoin wallet in a dump. He's been looking for it for years and cannot find it. It could also be considered lost forever.

The story of a person who lost Bitcoin due to being thrown into trash and a search for years after I read.