Permanent Loss of Bitcoins Over Time

[tcp_rst]

Over time bitcoins will be lost, and by lost I mean forever.  Inevitably wallets will be corrupted or deleted and can't be recovered.  Inevitably someone with bitcoins will die and their heirs will not know how to recover them, if they know of the coins at all.  In theory this loss could add up significantly over a long period of time.  With the total number of bitcoins capped what are the implications?

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[justusranvier]

With the total number of bitcoins capped what are the implications?

At some point in the future if the value of the smallest divisible unit gets too large the users might agree to a protocol change which adds extra decimal places.

[bcpokey]

Then the dude who secretly saved 1000 bitcoins will be the richest person on earth

[Yuhfhrh]

Over time bitcoins will be lost, and by lost I mean forever.  Inevitably wallets will be corrupted or deleted and can't be recovered.  Inevitably someone with bitcoins will die and their heirs will not know how to recover them, if they know of the coins at all.  In theory this loss could add up significantly over a long period of time.  With the total number of bitcoins capped what are the implications?

I think the chance of every single satoshi being lost within the next 100 million years would be 1 in 1 trillion. As technology improves, we will eventually have no data loss at all.

[ingrownpocket]

Over time bitcoins will be lost, and by lost I mean forever.  Inevitably wallets will be corrupted or deleted and can't be recovered.  Inevitably someone with bitcoins will die and their heirs will not know how to recover them, if they know of the coins at all.  In theory this loss could add up significantly over a long period of time.  With the total number of bitcoins capped what are the implications?

I think the chance of every single satoshi being lost within the next 100 million years would be 1 in 1 trillion. As technology improves, we will eventually have no data loss at all.

[tcp_rst]

At some point in the future if the value of the smallest divisible unit gets too large the users might agree to a protocol change which adds extra decimal places.

OK I see what you're thinking.  And the natural forces of the economy would adjust accordingly such that BTC .1 then takes on the same "value" as BTC 1 today.  I know I'm dramatically oversimplifying things, but I think I see your point. Or am I looking at this too much like a currency devaluation?

[mcgravier]

At some point in the future if the value of the smallest divisible unit gets too large the users might agree to a protocol change which adds extra decimal places.

OK I see what you're thinking.  And the natural forces of the economy would adjust accordingly such that BTC .1 then takes on the same "value" as BTC 1 today.  I know I'm dramatically oversimplifying things, but I think I see your point. Or am I looking at this too much like a currency devaluation?

You got it right, it's simply result of law of supply and demand. It is really that simple.

[bitcoinbear]

Over time bitcoins will be lost, and by lost I mean forever.  Inevitably wallets will be corrupted or deleted and can't be recovered.  Inevitably someone with bitcoins will die and their heirs will not know how to recover them, if they know of the coins at all.  In theory this loss could add up significantly over a long period of time.  With the total number of bitcoins capped what are the implications?

Forever is a very long time. As the number of "lost coins" goes up, the chances of people opening a new address and finding a pleasant suprise within also goes up.

As the number of bitcoins drops, the value of each bitcoin goes up, so people hold less and less bitcoins in a single place, and so each time bitcoins are lost the number of bitcoins goes down. In addition, as the value of bitcoins goes up, and as knowledge and protocols increase, people will lose less and less of their bitcoins (They are more careful with what they have, since it is worth more, and better layers of protection are invented and used to prevent total loss of bitcoins.) Based on unscientific polls of users of this forum, most bitcoiners are in the 20-35 year old range, these young people do not think about death and wills and providing a means for people to access their bitcoins if they die. However, as the bitcoiner population ages, they will (on average) think more about these things and many will put into place some mechanism for the coins to be passed to their survivors.

Just consider the math behind what you are suggesting. Let's say we have 100 units of currency, and we loose 1% of the outstanding amount every year. After 100 years we will still have 36.6 units of currency. So all the prices will only be about 1/3 as high, and we have had 100 years to be accustumed to the change in price.

[justusranvier]

As the number of "lost coins" goes up, the chances of people opening a new address and finding a pleasant suprise within also goes up.

Not on any meaningful time scale.

[reyals]

As the number of "lost coins" goes up, the chances of people opening a new address and finding a pleasant suprise within also goes up.

Not on any meaningful time scale.

Not just meaningful... on any time scale... heat death of the universe would probably kick in before you'd just randomly find a collision. 

[DobZombie]

What the bitcoin program needs is a wallet backup to email ability.

[aadje93]

What the bitcoin program needs is a wallet backup to email ability.

Blockchain.info

But where do you think your email is stored? Somewhere in hydrogen atoms that float around in the outer space?. No still harddrives.


Best backup if you ask me is the raid 11111111111 backup. Just copy your wallet to as much storage devices as possible (including CD/DVD that you store in your secret wall vault )


I lost 100BTC because of a backup from blockchain.info being captured (probarly by dropbox acount) So now i use client with cold storage linux boot.... (the nice thing about bitcoin is that in fact your coins are stored in the blockchain and you only backup your wallet key)

[Realpra]

At some point in the future if the value of the smallest divisible unit gets too large the users might agree to a protocol change which adds extra decimal places.

.. or a permanent block reward of 1 satoshi. This would lead to some equilibrium between the loss rate going up with more coins and the steady creation of new coins. Conceivably a perfect no inflation/deflation economy.

EDIT: On second thought this leads to miner waste, decimal moving is better.

[Yuhfhrh]

At some point in the future if the value of the smallest divisible unit gets too large the users might agree to a protocol change which adds extra decimal places.

.. or a permanent block reward of 1 satoshi. This would lead to some equilibrium between the loss rate going up with more coins and the steady creation of new coins. Conceivably a perfect no inflation/deflation economy.

EDIT: On second thought this leads to miner waste, decimal moving is better.

I never thought of a permanent block reward of 1 satoshi before. Interesting concept nonetheless.

[Fcx35x10]

i too think that in the future as technology continues to grow. btc will be more stable

[Rudd-O]

Over time bitcoins will be lost, and by lost I mean forever.  Inevitably wallets will be corrupted or deleted and can't be recovered.  Inevitably someone with bitcoins will die and their heirs will not know how to recover them, if they know of the coins at all.  In theory this loss could add up significantly over a long period of time.  With the total number of bitcoins capped what are the implications?

I think the chance of every single satoshi being lost within the next 100 million years would be 1 in 1 trillion. As technology improves, we will eventually have no data loss at all.

http://westorlandonews.com/wp-content/uploads/2010/12/housefire.jpg

It's called backups.

[Rudd-O]

At some point in the future if the value of the smallest divisible unit gets too large the users might agree to a protocol change which adds extra decimal places.

OK I see what you're thinking.  And the natural forces of the economy would adjust accordingly such that BTC .1 then takes on the same "value" as BTC 1 today.  I know I'm dramatically oversimplifying things, but I think I see your point. Or am I looking at this too much like a currency devaluation?

Currency revaluation.  You are right.

[Jack1Rip1BurnIt]

I guess it's really not gonna matter how many bitcoins get lost because no one will actually know how many have vanished. That's what is so awesome about the 8 decimal places bitcoin has.

[WhitePhantom]

I got a friend into bitcoin mining with about 4GH/s of BFL Singles, but I didn't get around to explaining how the wallet worked.  Shortly after he started mining, he decided to reload Windows on the laptop that contained his Bitcoin client.  He assumed that his wallet was somehow web based and lost 3 BTC.  When I explained how everything works, he didn't show too much concern over the $30-ish and just started over.

I, however, was more upset, mostly with myself.  I spent several hours recovering his lost wallet and trying to get at the coins, but it was corrupt and I finally had to give up.  It wasn't the loss of the current value that bothered me, but what 3 BTC might be worth someday and how annoyed I'll be at the situation if that happens.

tl;dr: Losing bitcoins sucks because they might be worth a LOT more someday, amplifying one's regret over having lost them.

[Jack1Rip1BurnIt]

I got a friend into bitcoin mining with about 4GH/s of BFL Singles, but I didn't get around to explaining how the wallet worked.  Shortly after he started mining, he decided to reload Windows on the laptop that contained his Bitcoin client.  He assumed that his wallet was somehow web based and lost 3 BTC.  When I explained how everything works, he didn't show too much concern over the $30-ish and just started over.

I, however, was more upset, mostly with myself.  I spent several hours recovering his lost wallet and trying to get at the coins, but it was corrupt and I finally had to give up.  It wasn't the loss of the current value that bothered me, but what 3 BTC might be worth someday and how annoyed I'll be at the situation if that happens.

tl;dr: Losing bitcoins sucks because they might be worth a LOT more someday, amplifying one's regret over having lost them.

I totally agree with you! I went on satoshi dice and lost about 6 bitcoins betting and it still burns me up thinking about it and that happened like 4 months ago. I will never bet my hard earned bitcoins again! I totally plan on using them as a form of retirement one day in the future because I believe they are destined to be worth a considerable amount one day.