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Author Topic: Will occasional losses of bitcoin wallets limit available maximum bitcoins?  (Read 13292 times)
FreeMoney
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January 14, 2011, 06:28:24 AM
 #61

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.
 

I agree.

Another difference is that when gold or silver are 'lost' it simply means "expensive to recover, we'll get it later when it's easier or when it's more valuable". It's pretty rare for gold to be transmogrified into lead or something, it usually just gets lost in the water to be found later.

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eMansipater
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January 16, 2011, 07:40:23 AM
 #62

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.
 

I agree.

Another difference is that when gold or silver are 'lost' it simply means "expensive to recover, we'll get it later when it's easier or when it's more valuable". It's pretty rare for gold to be transmogrified into lead or something, it usually just gets lost in the water to be found later.


This is the case with bitcoin, too--the recovery cost is in the number of cpu cycles required to find the private keys for the old addresses, which gradually becomes cheaper over time for "lost" bitcoins in proportion to available cpu power with the growth of technology(not so for held bitcoins, which can be continually upgraded to a higher key size alongside technological growth).

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January 16, 2011, 08:26:48 AM
 #63


Money is a way to transfer value.

You give a service or goods to someone, and you receive money which you expect to be able to give back later in exchange for some other good or service.  It's nothing but a convention between people.  Therefore, all money you own is some kind of a debt society has towards you.

If you lose money, you relieve society from this debt.   It's just as if what you did to obtain this money, you did it for free.

I don't see how people working for free could hurt society.
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January 19, 2011, 04:43:13 PM
 #64

Trading unpredictable central bank inflation for predictable annual coin loss seems like a good design decision to me.

But why pick between bad options when a perfect option can be created? God I am so tired of this blind slave consumer "only what's on the shelf" wysiwyg attitude.

But I don't think it's anything that needs to be worried about right now.

That's exactly the kind of thinking that got us into this economic mess in the first place. Now is precisely the time to think about it while the system is still small enough for real change to be adopted. The larger the number of people using the existing system the harder it will be to make sweeping updates.

What is the difference between lost coins, and coins that people have been saving for a long time?


None, it is mearly psychological.

Uhhhh, no. The difference is that lost coins are lost. That's like saying the difference between giving away a dollar and burning it is psychological. Man this really exposes the flawed thinking in people. This is the same logic that allows a baby to think the world has vanished when it's covered its eyes.

A lost coin has no potential to be spent, only potential to be stolen in some remote hypothetical future.

If a wallet.dat file is destroyed, and transactions orphaned, there is no way to use those coins ever again.

Well, not without a forced address collision, but I'm presuming that we would wish to spend those coins before the sun burns out.

Exactly. And that's exactly the kind of thinking enemies of this system would use. When you're trying to destroy competition (traditional currency vs cryptocurrency) a scorched earth policy is acceptable, if not preferable.

Maybe I am missing something, but what exactly is the point of reintroducing lost coins?

Because when more than 4 people use this currency people aren't going to want share the remaining 2 coins out to 50 decimal places. A net wide wallet attack could reduce the total amount of coins to an absurdly low amount overnight. It's all well and good to talk about magic future computers and super updates and deflation value but the fact is the system right now is perceived to be vulnerable. Whether that perception is a result of ignorance is irrelevant.

21 million for an entire global economy is ludicrously low to begin with when you think long term and large scale. Imagine trying to operate in an economy where a single penny will buy you an air craft carrier. You'd need the intellectual equivalent of a clean room and an electron microscope just to buy a pack of gum.

Do you people not realize the heat that will come down the second this currency starts being used by people any large government feels like calling terrorists? Wake up.

http://imgs.xkcd.com/comics/security.png

The system does not need to liberate lost coins.

First, there's no solution because there's no way to know they're actually lost. A bank could be holding some coins as collateral for hundreds of years and never touch them.

Secondly, there is no reason to do it. It just doesn't matter whether coins get lost. The price of the coins will naturally rise as the market realizes there are fewer coins that will "budge" to higher demand.

Thirdly, the U.S. likewise does not care about lost coins. If a federal reserve note (dollar bill) get mutilated or destroyed beyond recognition, the government never does anything to redistribute that lost dollar.


First, if the system has a provision for liberating dormant coins then institutions will simply refresh them from time to time by moving them from one account to another.

Secondly, I don't care about the value of the coin if there is only one coin to go around. Do you understand how damaging to the perceived value of the system all those decimals places will be? The problem existing makes the whole thing look slipshod and unprofessional, regardless of the metaphisyical actuality of the situation. A currency only has value because we all agree it has value. Marketing concerns here are as real in this context as any other concern, and I for one will not use this system until these problems are addressed.

Thirdly, except print more? Where do you think inflation comes from? The controllers of the currency are strongly motivated to create more currency.

Quote
I don't think this works.

Agreed.

Don't use it.

*facepalm* Oh for the love of...

Here we go, the classic head burying, if you don't like it get out, intellectually/politically/ethically lazy motto. The real reason real changes to the system are already impossible. Because of entrenched defensive elitists. The same crowd (literally in some cases I have no doubt) that uses telnet to browse the Internet and thinks user friendliness is weakness. The digital crotchety Amish waving slide rules at the kids on their lawn.

I guess Rosa Parks should have just walked to work. Screw trying to fix the system right?

I'm so tired of that whole sycophantic and yet egotistical mentality.

It's called backing up and encrypting it.

It's called control being an illusion. This is the exact same logic that people who don't wear helmets and seat belts use to disastrous effect. "I'll just be careful, I don't need basic safety precautions." Please.

Such a mechanism would make bitcoin network unnecessary more complex.

Right, because it's not necessary to address a basic, widespread, and obvious concern during the infancy of a currency you're trying to get people to adopt. >.>

I'm not going to literally bet my life savings on my ability to out-tech the entire hacker community; regardless of what color their hat is. And neither will anyone else with any rational understanding of reality.

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...

No, because the currency actually exists somewhere in some form. One person losing access to their funds is not that same as the currency being effectively annihilated in all cases as it is under bitcoin. And so long as I have to be have a masters in comp sci (public perception, regardless of how easy you think things actually are) just to buy a loaf of bread I'll avoid the currency.

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.

No they won't for the same reasons everyone here is basically talking smack to those with concerns right now. As the system grows resistance to change and intractability will as well. It will be like trying to convert America to metric. Those with a desire for user friendliness and security will be called newbs and lamers and the techno Luddites will run the show like always seeing to it that we all remain in the digital dark ages to preserve their own profit margin.

And if you don't see that mechanism at work already in virtually every other area of technical endeavor well I just don't think there's help for you.

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.

Can an older wallet file be used to partially recover funds?

I was under the impression that after so many transactions are made older backups were rendered worthless.

If loss of a current wallet file only means loss of funds since last backup, and not loss of all funds then much of my concern is alleviated since I could at the very least print my wallet file once a year and physically secure it.

Not that I would actually do that for the same reason I don't buy gold and bury it, but I like having the option.

I don't see how people working for free could hurt society.

I'm sure American blacks in the pre-civil war era would disagree. Tongue Smiley

But seriously. The point isn't to evade damage to society, but to address legitimate concerns with the system to foster adoption.

I'm not using the currency till they are addressed. My labor has the same value regardless so I can afford to wait. I don't feel like dedicating a computer to the creation of new coins. It's just a currency and I'll use whatever one I judge is best until things change. The question is, how many other people will judge bitcoin too risky, and will that number be significant enough to A. force changes to the system. B. Damage the perceived value of bitcoin (and other cryptocurrency schemes) sufficiently to sink it/them.

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kiba
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January 19, 2011, 04:51:02 PM
 #65


21 million for an entire global economy is ludicrously low to begin with when you think long term and large scale. Imagine trying to operate in an economy where a single penny will buy you an air craft carrier. You'd need the intellectual equivalent of a clean room and an electron microscope just to buy a pack of gum.

Complete nonsense. The supply doesn't matter when you can divide forever. Even 1 BTC is enough to run the whole economy. It's just a fucking integer, for Eris' sake.

Also, please reframe from making such a gigantic post.

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January 19, 2011, 06:47:51 PM
 #66

Complete nonsense. The supply doesn't matter when you can divide forever. Even 1 BTC is enough to run the whole economy. It's just a fucking integer, for Eris' sake.

You're being hopelessly ignorant of how the mind actually works, and at this stage of the currency's propagation, perception is rather important.

http://bitcointalk.org/index.php?topic=2436.msg34820#msg34820 <---< this also

Also, please reframe (sic) from making such a gigantic post.

Oh I'm sorry am I pushing your minuscule attention span? Well I tell you what, you can just divide my post into nanoposts so it's easier to handle. It's just a #$%^ing integer for FSM's sake. Smiley

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grondilu
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January 20, 2011, 06:14:01 PM
 #67

I just found out about this thread.

The 21 millions problem ?   Again ?

Just see the bitcoin as a measure unit.  Does it make any difference if you get one ton of gold or one million grams ?
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May 24, 2011, 07:13:34 PM
 #68

I see no problem referring to microbitcoins and picobitcoins. Even my grandmother groks kilo, mega, giga, -liters, -meters, -bytes or bits. After all 50 BTC is already represented as:

Value: 5000000000

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