the fate of bitcoins (all will be lost - literally and eventually)

[mishrahsigni]

Hello all, this is my first post....

so, the other day I had just transfered some bitcoins to my local wallet from bitfloor... and, as (bad) luck would have it, my harddrive went extremely south shortly after... i.s. no backup, and all my attempts to recover my lost wallet failed. 

I asked around and was told there really is no way to recover a lost wallet if I had no backup.

These bitcoins are appearantly lost, forever... encrypted bit floating around homeless in the bitcoin ocean.

If I loose $100 dollars (actual paper money) someone, somewhere, someday is going to find it and spend it.  The money stays in circulation.  If I loose a bitcoin, it is gone forever.  It seems to me that, eventually, little by little, as people loose their bitcoins for one reason or another, and there is not chance to recover them, then the number of bitoins actually in circulation forever dwindles.  A healthy electrical stroem and/or solar flare and half the bitcoins in existance will disappear.

Or (i hope) there IS some way to recover these lost coins.  If so I would love to find out how

[szuetam]

There is not.
Only way is to recover data out of your disc so you could keep it for future when it will be worth.

[noob_jul11]

Or (i hope) there IS some way to recover these lost coins.  If so I would love to find out how

So will a lot of people.

Let's look at it the other way around, shall we? What kind of security will BTC have if it's possible? I can go to blockexplorer, get the addresses listed on each block and try to hash out the keys; transfer those BTC for myself. It's like saying, I'm going to go to the bank where I don't have an account and take any amount of money I want.

[DannyHamilton]

. . .I asked around and was told there really is no way to recover a lost wallet if I had no backup. . .

This is true.

. . .If I loose $100 dollars (actual paper money) someone, somewhere, someday is going to find it and spend it.  The money stays in circulation. . .

That depends on how you loose it.  If your house burns down, and the cash that you had under your mattress burns up, how is anyone somewhere, someday going to spend that?

. . . It seems to me that, eventually, little by little, as people loose their bitcoins for one reason or another, and there is not chance to recover them, then the number of bitoins actually in circulation forever dwindles. . .

This is true.  It is part of the intentional design of bitcoin.

A healthy electrical stroem and/or solar flare and half the bitcoins in existance will disappear.

I hope that enough people will care enough about their money to have safe backups so that doesn't happen, but I suppose it could.  That would be one heck of an electrical storm or solar flare though to wipe out half of all bitcoins in existence. Wouldn't such an event wipe out other forms of electronic funds as well?  PayPal, bank accounts, credit card balances, etc. Something that can damage electronics in such a widespread way would destroy any non-hardened electronic devices, right?

Or (i hope) there IS some way to recover these lost coins.  If so I would love to find out how

Unfortunately for you, but fortunately for the viability of bitcoin as a currency, it is impossible without a backup.  Sorry.

[Kazimir]

1. Backups, dude! I have backed up my private keys at multiple places, both online and offline (and on paper). I will most certainly not lose them. I never create new addresses before sending funds to them (not without first having backed up that as well). So even if I withdraw from an exchange or something, and my harddisk crashes that very same second, I still won't have lost a single satoshi.
 
2. It doesn't matter how many coins are lost. Infinite divisibility. The current smallest unit is 10^-8 BTC but this precision can easily be extended. So if at some point in history, there is only 1 million BTC in circulation and 20 million have been lost, everything will keep working just fine (except the BTC currency rate will be 20 times higher). This also means that the mining reward will never have to reach zero. Sure, it will become smaller and smaller over time (halved every 4 years) but new fractions of bitcoins will always be added, for as long as the universe will exist.

So, no. We will NEVER see a situation where literally ALL bitcoins are lost. And as long as there are at least some bitcoins in circulation, it's automatically enough for a global economy, because the actual number simply doesn't matter at all.

This is a mistake you see often: people thinking "21 million coins is not enough for a global economy". Forget about the 21 million. It's just an arbitrary number. It could have been 85×10¹⁹ trillion coins as well. Or just ONE. Essentially it makes no difference, everything would work the same except with larger or smaller numbers.

[DannyHamilton]

. . . The current smallest unit is 10^-8 BTC but this precision can easily be extended. . .

That sort of depends on what you mean by "easily".  The precision can be extended, but some people might not consider the necessary process to be "easy".

[dancupid]

Hello all, this is my first post....

so, the other day I had just transfered some bitcoins to my local wallet from bitfloor... and, as (bad) luck would have it, my harddrive went extremely south shortly after... i.s. no backup, and all my attempts to recover my lost wallet failed.  

I asked around and was told there really is no way to recover a lost wallet if I had no backup.

These bitcoins are appearantly lost, forever... encrypted bit floating around homeless in the bitcoin ocean.

If I loose $100 dollars (actual paper money) someone, somewhere, someday is going to find it and spend it.  The money stays in circulation.  If I loose a bitcoin, it is gone forever.  It seems to me that, eventually, little by little, as people loose their bitcoins for one reason or another, and there is not chance to recover them, then the number of bitoins actually in circulation forever dwindles.  A healthy electrical stroem and/or solar flare and half the bitcoins in existance will disappear.

Or (i hope) there IS some way to recover these lost coins.  If so I would love to find out how

Forensically they are not gone - pay $600 (a guess) and they could be reclaimed. Keep the disk, wait a couple of years and it may well be worth the cost.

edit - try linux on a USB stick - it's rare for hardrives just to fail absolutely even if they are on their last legs - you should still be able to get something off it.

[bitcoinvideos]

I agree with the backup suggestions but am curious how you could do a paper backup?  I know this is something my wife would feel more comfortable with?  Are you saying that you simply print the addresses found in the wallet?

[DeathAndTaxes]

I agree with the backup suggestions but am curious how you could do a paper backup?  I know this is something my wife would feel more comfortable with?  Are you saying that you simply print the addresses found in the wallet?

Not just the address, the private key.  You could dump the private key and address, and construct something nice for re-importing at a later date and then format and print the entire thing  or you could just go here:
https://www.bitaddress.org

(note all code is done client side, you can inspect the javascript and if ultra paranoid, save a copy of the page and use it offline)

[DeathAndTaxes]

If I loose $100 dollars (actual paper money) someone, somewhere, someday is going to find it and spend it.  The money stays in circulation.  If I loose a bitcoin, it is gone forever.

You seem to be using the word loose incorrectly.   Your didn't loose your bitcoins in the sense they fell out of your pocket they lost in the sense they were destroyed (or more correctly access to them was permanently and irrevocably destroyed).

You have $1,000 in your pocket and it falls out of the street - money gets a new owner (if someone picks it up).
You have a 100 BTC in a wallet on a thumb drive and it falls out on the street - money gets a new owner (if someone picks it up).

You have $1,000 in your house when it catches fire and burns to the ground - money lost forever.
You have 100 BTC in a wallet in the same house - money lost forever.

Those would be the equal comparisons.  Note that there is nothing to recover destroyed physical currency (like in a house fire).  You can't "back it up", make a copy for safe storage, etc.  However you can do that with a Bitcoin wallet.

Or (i hope) there IS some way to recover these lost coins.  If so I would love to find out how.

There isn't.  If you could recover your lost coins then anyone could "recover" anyone's "not so lost" coins.  The currency would have no tangibility, no value.  

The only way to recover the lost coins is to recover the destroyed private keys.  It may be possible if to recover them even from a failed disk.  There are low level tools which can recover raw data from drives even if the partition is corrupt.  Going even more extreme there are data recovery specialists who can recover data from drives which have physically failed although the cost is likely higher than the value of the lost private keys.

[FreeMoney]

Even if you don't feel like saving them now keep the disk and pay to get them out when they are worth $1k, $10k or $100k.

Also, the sun is going to burn out eventually, literally.

[szuetam]

A healthy electrical stroem and/or solar flare and half the bitcoins in existance will disappear.

I hope that enough people will care enough about their money to have safe backups so that doesn't happen, but I suppose it could.  That would be one heck of an electrical storm or solar flare though to wipe out half of all bitcoins in existence. Wouldn't such an event wipe out other forms of electronic funds as well?  PayPal, bank accounts, credit card balances, etc. Something that can damage electronics in such a widespread way would destroy any non-hardened electronic devices, right?

Huh, thats why I keep my BTC with BlueDisc backup, storm wont destroy it so easy.
But I doubt that banks do that.

[DannyHamilton]

Huh, thats why I keep my BTC with BlueDisc backup, storm wont destroy it so easy.
But I doubt that banks do that.

Sure, but where are you going to get your hands on a computer that hasn't been fried by this freakish event?  And will enough internet routers still be operational to maintain the blockchain and relay transactions?  Will the power grid still be operational?

[szuetam]

Or just ONE. Essentially it makes no difference, everything would work the same except with larger or smaller numbers.

In 2006 I had Idea for internet currency with suply of only one and emission halving time to time. dividable for infinity small pieces. Unfortunetly I hadn't tech skills and motivation to create it. But I'm so glad that it is.
I can't understand why there is 21M rather than 1 single BTC with 16 places after dot.
As like degrees in circle why the hell 360? why not 1 or 2pi?

[dancupid]

Or just ONE. Essentially it makes no difference, everything would work the same except with larger or smaller numbers.

In 2006 I had Idea for internet currency with suply of only one and emission halving time to time. dividable for infinity small pieces. Unfortunetly I hadn't tech skills and motivation to create it. But I'm so glad that it is.
I can't understand why there is 21M rather than 1 single BTC with 16 places after dot.
As like degrees in circle why the hell 360? why not 1 or 2pi?

100% of remaining Bitcoins is 100% - we can call it anything. I personally like British imperial units. Let's call 223 bitcoins 5 shillings and 6 pence.

[RodeoX]

..
2. It doesn't matter how many coins are lost. Infinite divisibility. ...

People seem to have such a hard time understanding this. Perhaps it is because you cant cut a penny into 10,000 pieces and call each piece a dollar. Which you could do with a bitcoin.

[pinnpe]

Maybe this might help: http://www.grc.com/intro.htm


I personally believe that bitcoin should die after a period (10 years) of no usage
and be reborn through mining.

[flynn]

I kinda disagree.

I have no problem with the mathematical concept of infinitely dividing the remining bitcoins, BUT the problem is that nobody knows that the lost bitcoins are lost or simply kept under someone's mattress

As a consequence, everyone can legitimely think that the total monetary mass of bitcoins stays at 21M

The market will then most probably evaluate the value of a bitcoin by balancing that monetary mass against something it thinks bitcoins (as a whole) is worth, thus impacting bitcoin's exchange value.

Or not : Maybe the market will stabilize to a price evaluated by balancing the bitcoins in movment during a certain timeframe ?

Little can be done about it tho. Maybe the founders could modify the clients so that a bitcoin needs to move from an address to another within a certain timeframe to stay valid ? (just trolling here, forget it)

[mishrahsigni]

I may be exposing my general ignorance here... but...  it seemed to me that if each bitcoin I held was encrypted with my private key when i took ownership of it, and that private key is used to validate my ownership... i.e. if I can decrypt the public key than ta-da... i own the coin.  therefore, if I loose my wallet, all I would need to do is attempt to decrypt every public key coin value, and the ones I can successfully decrypt are mine.  All I need to do is keep my private key safe... which could even be a sentence.


and yes, it would have to be a doozy of an EMP or electrical storm.. but it has happened before, and likely will happen again

 

[DannyHamilton]

I may be exposing my general ignorance here... but...  it seemed to me that if each bitcoin I held was encrypted with my private key when i took ownership of it, and that private key is used to validate my ownership... i.e. if I can decrypt the public key than ta-da... i own the coin.  therefore, if I loose my wallet, all I would need to do is attempt to decrypt every public key coin value, and the ones I can successfully decrypt are mine.  All I need to do is keep my private key safe... which could even be a sentence.

That's not really how it works. You don't "decrypt the public key", you use the private keys to sign the transaction.  The miners then use the signature to confirm that you are the proper owner of the inputs you are using in your transaction.

You are correct though in your assumption that if your private key is safe, then you can still gain access to your bitcoins.

The private key is what is stored in the wallet.dat file, so as long as you have the wallet.dat backed up you still have access to your private keys.

You could also write your private keys down on a piece of paper (or print them) which would also be a form of backing up your wallet.

Note that you don't need to "attempt to decrypt every public key coin value".  The private key is mathematically linked to the bitcoin address.  If you know your private key, you can calculate exactly what the bitcoin address is and you can spend any value associated with that address.