Greetings !
I was introduced to Bitcoin by a fellow friend who offered to pay his debt to me in BTC. When I googled it the tech behind the system piqued my interest, and I researched this currency very extensively for the past few days. So now I have two questions towards the more experienced members of the board :
Firstly, suppose that the coin goes mainstream and so it happens that by 2150 90% of the coins have disappeared from circulation due to loss of private keys etc etc. What happens when a large, lost stash is found and unlocked ? Like, what happens when the entire economy clocks at 2 million coins, and suddenly someone finds a stash of 500.000 BTC ? That's like 25% of the entire circulation !
1. It is unlikely that 90% of the bitcoins will have disappeared by then. As the value increases from increased adoption, the quantities that are lost will decrease. If 1 bitcoin is worth $1 million, it is rather unlikely that they will all be stored in one place and lost all at once by a single person. Instead the amounts that are lost will get smaller and smaller.
2. The really large amounts that are lost early on when bitcoins are relatively cheap are exceedingly unlikely to be "discovered" as more time passes.
3. I'll be dead in 2150, so I'll let the people who are alive then decide how they want to prepare for that situation. It would be rather conceited for me to think that I know best in 2014 how the people in 2150 would want to handle a sudden discovery of a single large cache of bitcoins.
4. The person who discovers the large cache of bitcoins will be very rich and very happy. If bitcoin is mainstream by then, the person who discovers it won't have to "cash out", so there won't be a sudden flow of bitcoins into the economy. Instead, they will spend the bitcoins as needed, slowly releasing them in exchange for products and services.
Then there's the issue regarding the block chain getting too big for regular clients to handle. If the coin catches on then thousands upon thousands of transactions every second are bound to happen. At that rate the blockchain will start becoming massive. Even if computer drives get bigger the blockchain growth will outpace that of the HDD's. And that is something that could happen if for example it becomes a reserve currency.
Thanks all
At the moment the protocol limits the size of blocks at 1 megabyte, and the number of blocks at approximately 144 per day. At that rate, the blockchain can't grow any faster than 52.5 gigabytes per year. You can purchase a 4 terabyte hard drive for less than $200 today. That will hold the blockchain for 76 years. Hard drive technology hasn't even existed for 76 years yet. How much larger and cheaper do you really suppose permanent storage will be 76 years from now. What new permanent storage technologies do you suppose will be invented in the next 76 years?
Even if permanent storage technologies don't advance, the users of bitcoin in the future will have the option of reaching their own consensus on how to reduce the size of the blockchain. Perhaps they will choose some sort of checkpoint system. Perhaps they will replace bitcoin with a new cryptocurrency on a hard coded 1 for 1 basis. Perhaps they will come up with something ingenious that none of us have even thought of yet.
