Permanent Loss of Bitcoins Over Time

[tcp_rst]

As an alternative to (or perhaps adjunct to) revaluation as described above could the community decide we should reinstate mining for some specified number of coins?  Ignoring whether or not it's a good idea, is it technically possible to modify the block chain to do this?  I'm talking a long time from now, like 3 or 4 human generations after the 21 million coins have been mined.

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[DeathAndTaxes]

Bitcoin is simply a set of rules agreed to by consensus you can change anything.  You could make the blockreward 500,000 BTC per block tomorrow.  You could make the block reward 500,000 BTC per block retroactive back to the very first block.  Both changes would require at most a couple dozen lines of code and maybe a weekend worth of coding (including testing).

However anytime the protocol changes unless 100% of users (not 100% of just miners, but 100% of all nodes installed, all exchanges, all merchants, all bitcoin owners, all client developers, etc) there will be a fork in the network.

Some % of the network will continue to use the old code and some % will use the newer incompatible code.  Unless a change has nearly unanimous support or rejection a split like that could be very damaging as both forks could continue to exist independently however they would be incompatible.  Imagine two protocols both calling themselves Bitcoin, both very similar but completely incompatible.  Imagine you are on fork A but your friend is on fork B.  He sends you some coins but those coins aren't seen as valid on fork A so you never "get them" (at least not of fork A) but from his point of view he did send them (just to the same address on fork B).  Now imagine neither side is willing to drop the name Bitcoin ("we are the real Bitcoin").  Some merchants accept Bitcoin-A, some accept Bitcoin-B.  Some sloppily don't indicate the compatible fork so merchant-A gets paid orders paid with Bitcoin-B Bitcoins that the merchant can't see but the customer can't get back.

Of course such a scenario is unlikely to happen because the results are known to be chaotic.  Any such change will get minimal support and die a quite death.   The fixed supply is part of the social contract.  Bitcoin users join Bitcoin voluntarily and do so based on the information that is known (including the fixed supply).  Changing that decades later would be a huge blow the confidence in the network.   I would go so far as to say it is immoral, it changing the contract after the fact and STEALING (yes STEALING) from existing users.  So can it be changed?  Sure.  Is it likely to ever be changed (a year from now, a decade, a century)?  No.   Of course if you feel it is so important to have coins never stop minting then simply make a fork of Bitcoin call it "Inflat-a-coin" or something like that and if it is popular enough someday it will displace Bitcoin.

TL/DR version:
If you can change the minting rate once you can change it again, and again, and again, and again. Anytime inflation is changed there are winners and losers.  So if people accept such changes and you can benefit from a change in inflation you should keep changing it over and over and over.   The confiscation of wealth via inflation is probably the most powerful concept in the enslavement of modern man.   I would hope that most people would have no faith in such a system where the rules can be changed to the benefit of some at the expense of others and reject it outright. 

[hashman]

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?

The implications are discussed ad nauseum in this forum.  This is what people often simply call "deflation", more accurately one might call it deflation of the money supply. 

Some people read more into it but imho the implications are just that a single unit of currency will become more valuable with time (provided you can hold onto those keys

[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.

Yes, everyone does that.

Most people who have lost data once do them.  Those who don't, well, haha, sucks to be them, but I'm not them, so I really don't give a shit.  In fact, I find it economically beneficial that there are idiots out there who don't do backups, because that means their lost coins give my own non-lost coins much more value.

[Richy_T]

It's called backups.

Offsite backups

And in the case of BTC, the private key or even the whole wallet is so small, there's really no excuse not to. Heck, there should be cloud integration in the client (not that I'm a huge fan of "the cloud")

[Richy_T]

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.

Spend the 30 bucks and buy three bitcoins. How much time did you spend trying to get them back?

How badly was the file corrupted in any case? You know you only have to get the private key out, right?

[Richy_T]

Bitcoin is simply a set of rules agreed to by consensus you can change anything.  You could make the blockreward 500,000 BTC per block tomorrow.  You could make the block reward 500,000 BTC per block retroactive back to the very first block.  Both changes would require at most a couple dozen lines of code and maybe a weekend worth of coding (including testing).

I think he's talking about re-mining "lost" coins. The thing is, how do you know what's lost and how do you know what's been put away for a rainy day? You could be quite literally stealing* if you did that.




(*Arguments that bitcoins cannot be stolen notwithstanding).

[zebedee]

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.

That's completely irrational of course. Today's price is all that should matter to you,  if  really bothering you just buy 3 from someone or some exchange.

[J-Norm]

The implications is that bitcoins will be more valuable and the decimal will be moved over.

[meebs]

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.

That's completely irrational of course. Today's price is all that should matter to you,  if  really bothering you just buy 3 from someone or some exchange.

Yup, if you HONESTLY feel they will be worth a lot more... buy a few dozen coins or whatever is reasonably affordable based on ones income.

[Aabel]

Most people who have lost data once do them.  Those who don't, well, haha, sucks to be them, but I'm not them, so I really don't give a shit.  In fact, I find it economically beneficial that there are idiots out there who don't do backups, because that means their lost coins give my own non-lost coins much more value.

True story.  

I think losing bitcoins won't never be a problem for bitcoin. 21 Million coins with millions of users requires a few broken hard drives.