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Author Topic: Will occasional losses of bitcoin wallets limit available maximum bitcoins?  (Read 13475 times)
kiba
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December 30, 2010, 05:06:19 AM
 #41

Bill Gates would no longer be in the top ten most rich people list.
that should be fine if it's a result of the owner's fault, under other circumstances, if he's a victim of a crime (theft, sabotage, etc), most people will probably think not having a lost-coin recovery mechanism is a flaw.

Such a mechanism would make bitcoin network unnecessary more complex.

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December 30, 2010, 05:11:28 AM
 #42

Bill Gates would no longer be in the top ten most rich people list.
that should be fine if it's a result of the owner's fault, under other circumstances, if he's a victim of a crime (theft, sabotage, etc), most people will probably think not having a lost-coin recovery mechanism is a flaw.

Some will, certianly.  Those people can stick to paypal, or buy insurance.  Not that a sum as large as what Bill Gates could hold in bitcoin is insurable, but it might for others.  I expect that, eventually, bitcoin banks and similar institutions a la Mybitcoin will have to be insured against liability losses in order to attract and keep customers, but the fees that they charge will have to be low enough to compete with the cost of regular bitcoin transactions, as a well managed personal client with encrypted backups is as good a form of prevention of loss as can be insured against for most people with the good sense to accumulate any notable sum.

Sorry about the long sentence, btw.  That's just how long it needed to be.

"The powers of financial capitalism had another far-reaching aim, nothing less than to create a world system of financial control in private hands able to dominate the political system of each country and the economy of the world as a whole. This system was to be controlled in a feudalist fashion by the central banks of the world acting in concert, by secret agreements arrived at in frequent meetings and conferences. The apex of the systems was to be the Bank for International Settlements in Basel, Switzerland, a private bank owned and controlled by the world's central banks which were themselves private corporations. Each central bank...sought to dominate its government by its ability to control Treasury loans, to manipulate foreign exchanges, to influence the level of economic activity in the country, and to influence cooperative politicians by subsequent economic rewards in the business world."

- Carroll Quigley, CFR member, mentor to Bill Clinton, from 'Tragedy And Hope'
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December 30, 2010, 05:17:52 AM
 #43

Bill Gates would no longer be in the top ten most rich people list.
that should be fine if it's a result of the owner's fault, under other circumstances, if he's a victim of a crime (theft, sabotage, etc), most people will probably think not having a lost-coin recovery mechanism is a flaw.

what's your coin recovery mechanism when someone breaks into your house and steals your stash of cash and valuables?

the 'stolen bitcoin' recovery mechanism is exactly the same.

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December 30, 2010, 06:10:52 AM
 #44

Bill Gates would no longer be in the top ten most rich people list.
that should be fine if it's a result of the owner's fault, under other circumstances, if he's a victim of a crime (theft, sabotage, etc), most people will probably think not having a lost-coin recovery mechanism is a flaw.

what's your coin recovery mechanism when someone breaks into your house and steals your stash of cash and valuables?

the 'stolen bitcoin' recovery mechanism is exactly the same.

Can you imagine going to the police today to report the theft of your wallet.dat  Cheesy Cheesy Cheesy

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MoonShadow
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December 30, 2010, 07:13:45 AM
 #45

Bill Gates would no longer be in the top ten most rich people list.
that should be fine if it's a result of the owner's fault, under other circumstances, if he's a victim of a crime (theft, sabotage, etc), most people will probably think not having a lost-coin recovery mechanism is a flaw.

what's your coin recovery mechanism when someone breaks into your house and steals your stash of cash and valuables?

the 'stolen bitcoin' recovery mechanism is exactly the same.

Can you imagine going to the police today to report the theft of your wallet.dat  Cheesy Cheesy Cheesy

I would imagine that the end results would be the same as when I reported my stolen bicycle as a child.  Too many adults still have a childlike faith in the abilities of the police.

"The powers of financial capitalism had another far-reaching aim, nothing less than to create a world system of financial control in private hands able to dominate the political system of each country and the economy of the world as a whole. This system was to be controlled in a feudalist fashion by the central banks of the world acting in concert, by secret agreements arrived at in frequent meetings and conferences. The apex of the systems was to be the Bank for International Settlements in Basel, Switzerland, a private bank owned and controlled by the world's central banks which were themselves private corporations. Each central bank...sought to dominate its government by its ability to control Treasury loans, to manipulate foreign exchanges, to influence the level of economic activity in the country, and to influence cooperative politicians by subsequent economic rewards in the business world."

- Carroll Quigley, CFR member, mentor to Bill Clinton, from 'Tragedy And Hope'
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December 30, 2010, 07:39:28 AM
 #46

Bill Gates would no longer be in the top ten most rich people list.
that should be fine if it's a result of the owner's fault, under other circumstances, if he's a victim of a crime (theft, sabotage, etc), most people will probably think not having a lost-coin recovery mechanism is a flaw.

what's your coin recovery mechanism when someone breaks into your house and steals your stash of cash and valuables?

the 'stolen bitcoin' recovery mechanism is exactly the same.

Can you imagine going to the police today to report the theft of your wallet.dat  Cheesy Cheesy Cheesy

  Cheesy Cheesy Cheesy Cheesy

I would imagine that the end results would be the same as when I reported my stolen bicycle as a child.  Too many adults still have a childlike faith in the abilities of the police.

  Cheesy Cheesy Cheesy Cheesy Cheesy

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Governments are good at cutting off the heads of a centrally controlled networks, but pure P2P networks are holding their own."
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December 30, 2010, 08:22:56 AM
 #47

Too many adults still have a childlike faith in the abilities of the police.

Ain't that the truth.

The police here couldn't find their ass with both hands. They'd likely just have glazed-over eyes if you tried to report a stolen wallet.dat file. Tongue

If you were really lucky they'd find something to charge you with. Perhaps a burnt out tail light on your car?
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January 01, 2011, 08:06:57 PM
 #48

If you were really lucky they'd find something to charge you with. Perhaps a burnt out tail light on your car?

Damn, i really hate this as it is very common in my country.
You come to them asking for help, and you get your ass kicked instead.

FreeMoney
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January 01, 2011, 08:55:13 PM
 #49

If you were really lucky they'd find something to charge you with. Perhaps a burnt out tail light on your car?

Damn, i really hate this as it is very common in my country.
You come to them asking for help, and you get your ass kicked instead.

What? Don't they work for you? If you don't get service that you like stop paying, they aren't going to force you to keep paying, they aren't the criminals.

/sarcasm

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pull
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January 01, 2011, 09:32:21 PM
 #50

If you were really lucky they'd find something to charge you with. Perhaps a burnt out tail light on your car?

Damn, i really hate this as it is very common in my country.
You come to them asking for help, and you get your ass kicked instead.

What? Don't they work for you? If you don't get service that you like stop paying, they aren't going to force you to keep paying, they aren't the criminals.

/sarcasm
Indeed. Hey freemoney, check your PM's... I've been trying to get ahold of you..
ShadowOfHarbringer
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January 05, 2011, 03:23:30 PM
 #51

If you were really lucky they'd find something to charge you with. Perhaps a burnt out tail light on your car?

Damn, i really hate this as it is very common in my country.
You come to them asking for help, and you get your ass kicked instead.

What? Don't they work for you?

Not really. Not in this country...

If you don't get service that you like stop paying, they aren't going to force you to keep paying, they aren't the criminals.
/sarcasm

If you stop paying, you go to jail. Closed loop.

bitk
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January 07, 2011, 02:02:11 AM
 #52

Backing up your wallet after every transaction is pure madness. Consider small marketplaces or "banks", that might receive several transactions per minute. If their server goes boom, the wallet and the backup might be both gone.

EDIT: Sorry for not finding this before, it's explained on http://en.bitcoin.it/wiki/Securing_your_wallet

So, if I understand correctly, if you backup your wallet every 100 address creations or transactions, you're just fine, right? This actually sounds reasonable, I must say. Almost more secure than physical wallet actually.

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theymos
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January 07, 2011, 02:04:58 AM
 #53

Backing up your wallet after every transaction is pure madness. Consider small marketplaces or "banks", that might receive several transactions per minute. If their server goes boom, the wallet and the backup might be both gone.

You don't have to back up after every transaction. You only have to back up every 100 sends or address creations. And if you set keypool=10000, you only have to back up every 10000 sends/keys.

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ShadowOfHarbringer
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January 07, 2011, 02:40:01 AM
 #54

Backing up your wallet after every transaction is pure madness. Consider small marketplaces or "banks", that might receive several transactions per minute. If their server goes boom, the wallet and the backup might be both gone.

On Linux/UNIX there are network filesystems such as NFS and CODA, which can give you multiple backups on many servers at once. Everything everywhere cannot just go "boom" all in the same time.
Not saying about ZFS, SAN/RAID disk arrays, and lots of other technologies which give you multiple data redundancy. You can have as many backup servers as you want... possibilities are endless.

Anyway, this is not really a problem, because modern banks all use electronic currencies already, and if their computer systems failed, people would lose money the same way as they would lose bitcoins...

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January 07, 2011, 04:21:35 AM
 #55

Anyway, this is not really a problem, because modern banks all use electronic currencies already, and if their computer systems failed, people would lose money the same way as they would lose bitcoins...
I haven't heard any incidents that depositors lost all their money because their bank's computer failed... and there's always a FDIC to fall back on.

The more I think about this, the more scenarios I can think of:
1. File or machine corruptions (once you make an transaction, the previously backup wallet file become useless, correct?)
2. Some % of new users will abandon their bitcoin wallets or bank accounts, along with whatever balance in them.
3. If there's an error in the address, payment is sent to a "no man's land", the BTCs are essentially lost forever.

My ballpark estimate is there will be 5%~10% bitcoins disappear from circulation every year and this will create significant deflation pressure, once the generation curve flattens.
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January 07, 2011, 04:36:10 AM
 #56

had a back of the envelop calculation: if the loss rate is 10% per annual, it will take 21 years to reach the 1/10 mark, which can be compensated by moving the decimal point one digit to the right. Not too bad indeed.
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January 07, 2011, 05:33:47 AM
 #57

There is nothing to worry about.  Just feel sorry for the suckers who loose their wallets.  Sad

contrary to common belief on this forum;  there is a damage done to the Bitcoin economy when on looses his or her Bitcoins to the either.

If somebody is capable earning Bitcoin, then they will be more likely to re-invest those Bitcoins effectively, thus growing the Bitcoin economy faster than the natural deflation cause by lost coins.

However, as coins get worth more, the number lost will lessen.

One off NP-Hard.
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January 07, 2011, 09:54:34 AM
 #58

had a back of the envelop calculation: if the loss rate is 10% per annual, it will take 21 years to reach the 1/10 mark, which can be compensated by moving the decimal point one digit to the right. Not too bad indeed.

I seriously doubt that 10% of gold/silver/platinum bullion is lost every year...

Once people understand that bitcoin is a hard money & a commodity, they will protect it with their lives, the same as they do with normal bullion. Therefore, i think that 10% may be probable for the first few years of bitcoin adoption, and when masses understand the power of bitcoin, the loses will fall to 3% or less.

----
EDIT:
Also, new, better clients will be created with built-in multiple automatic wallet backups & data redundancy (or it will be implemented in the default client). So the losing of a wallet will become less common.

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January 12, 2011, 02:56:05 AM
 #59

Well I never loosed my wallets but, if some of you say that "there is no recovery", then maybe in the time of the coins creation there is a limitation of available max. bitcoins since there's a loss. (of course quantitatively.)
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January 14, 2011, 04:11:08 AM
 #60

Personally i simply double-backup my whole partition every day (weird RAID configuration).

Also, i backup my wallet on a pendrive every longer period of time.

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