Is this idea to counter lost bitcoins possible?

[galambo]

It seems you are late with freicoin.

The Treasury already has assets on sale with negative interest. Will they also spark an economic miracle?

http://www.ft.com/cms/s/0/8b76525a-486b-11e2-a1c0-00144feab49a.html#axzz2FWwaEWlj

You must read zerohedge, or a similar gloom and doom blog? That doesn't really mean what you think it means. I participated in this bond auction, but I was buying 30 year bonds. The interest rate was 2.75%, not negative. God bless America. Thanks.

It is in real terms.  The average annual inflation over prior 30 years was 3.07%.  2.75% - 3.07% =  -0.32% real return.

You don't think the next 30 is going to be less inflation do you?  I mean at this point the best we can hope for would be "only" ~3% inflation.   If we get a period like from 1973 to 1981 in there well ouch. 

http://www.usinflationcalculator.com/inflation/historical-inflation-rates/

Good luck.

[kjj]

First, let me say this: Freicoin looks like an interesting experiment.  It appears that Freicoin proponents have a comprehensive economic theory, which appears wrong to me, but I could be wrong myself.

I, for one, would LOVE to hear it.

http://freico.in/about/  

I hate to be the one to say it, but that freicoin manifesto is a cesspit of keynesian gibberish and populist nonsense.  Calling it a "comprehensive economic theory" is to go zero for three.

[MoonShadow]

First, let me say this: Freicoin looks like an interesting experiment.  It appears that Freicoin proponents have a comprehensive economic theory, which appears wrong to me, but I could be wrong myself.

I, for one, would LOVE to hear it.

http://freico.in/about/  

I hate to be the one to say it, but that freicoin manifesto is a cesspit of keynesian gibberish and populist nonsense.  Calling it a "comprehensive economic theory" is to go zero for three.

Technically, not keynesian.  I'd say it's arguablely a variety of a monetarist theory, although not of the dominate set.

[kjj]

Technically, not keynesian.  I'd say it's arguablely a variety of a monetarist theory, although not of the dominate set.

Keynes had more to say than just "print more".  I see a lot of his other blather in there.

[bitfreak!]

Since this Freicoin thing apparently doesn't deal with lost coins I don't see how it's relevant to this discussion any more. I personally think Bitcoin is almost perfect as a currency how it is, except for that one little thing; lost coins. As I have stated multiple times, I don't think it's something which will absolutely lead to the downfall of Bitcoin, but as I have clearly explained there are aspects of infinite deflation which can lead to an unhealthy Bitcoin economy. Just as there are aspects of infinite inflation which can lead to an unhealthy economy, they are both fundamentally flawed.

I'm not talking about making Bitcoin an inflationary currency, if lost coins are eventually recovered we will still see price deflation because of economic growth, just as we do now even though new coins are being mined. In terms of the money supply, bitcoin should be neither deflationary nor inflationary. It should strive to maintain a stable money supply where the value of each unit is solely driven by natural market forces, and not driven by changes in the size of the money supply. Now you can disagree with me on this, but I have yet to hear any truly solid counter-argument.

I think the economics of a system which has a stable money supply is clearly superior to any money system which has an infinitely increasing or infinitely decreasing money supply. And until I hear a truly solid argument for why my economic theories are wrong in this respect, I will always argue that Bitcoin needs to be transformed into the most superior state which is built for long term robustness and economic stability. The solution to the absurdity of infinite inflation of the money supply is not infinite deflation of the money supply, in reality both fail to understand the basic premise of a stable money supply.

[galambo]

First, let me say this: Freicoin looks like an interesting experiment.  It appears that Freicoin proponents have a comprehensive economic theory, which appears wrong to me, but I could be wrong myself.

I, for one, would LOVE to hear it.

http://freico.in/about/  

I hate to be the one to say it, but that freicoin manifesto is a cesspit of keynesian gibberish and populist nonsense.  Calling it a "comprehensive economic theory" is to go zero for three.

Well, its a comprehensive economy theory. You may just happen to disagree with it.   As an aside the Freicoin network now has around 5GH/s hashing power. I couldn't be happier with how people from all over the globe have pitched in to help this fledgling cryptocurrency take off.

[scrybe]

Since this Freicoin thing apparently doesn't deal with lost coins I don't see how it's relevant to this discussion any more. I personally think Bitcoin is almost perfect as a currency how it is, except for that one little thing; lost coins. As I have stated multiple times, I don't think it's something which will absolutely lead to the downfall of Bitcoin, but as I have clearly explained there are aspects of infinite deflation which can lead to an unhealthy Bitcoin economy. Just as there are aspects of infinite inflation which can lead to an unhealthy economy, they are both fundamentally flawed.

I'm not talking about making Bitcoin an inflationary currency, if lost coins are eventually recovered we will still see price deflation because of economic growth, just as we do now even though new coins are being mined. In terms of the money supply, bitcoin should be neither deflationary nor inflationary. It should strive to maintain a stable money supply where the value of each unit is solely driven by natural market forces, and not driven by changes in the size of the money supply. Now you can disagree with me on this, but I have yet to hear any truly solid counter-argument.

I think the economics of a system which has a stable money supply is clearly superior to any money system which has an infinitely increasing or infinitely decreasing money supply. And until I hear a truly solid argument for why my economic theories are wrong in this respect, I will always argue that Bitcoin needs to be transformed into the most superior state which is built for long term robustness and economic stability. The solution to the absurdity of infinite inflation of the money supply is not infinite deflation of the money supply, in reality both fail to understand the basic premise of a stable money supply.

I agree that Freicoin is WAY different, and not really relevant.

Please provide at lease SOME detail on what your basis is for stating that a stable number of coins is required. I'm still waiting for anything better than a blanket assertion.

At this point I am completely unconvinced that losing some or even most BitCoins is a bad thing, as long as everyone understands that they are lost forever (or until the theoretical possibility of cracking keys allows limited reclamation.)

Help me understand your basis for this belief and I will either understand your point and agree, or point out where our reasoning differs. It is possible that one of us is making a significant logic error, but refusing to talk about your reasoning is not going to help anybody.

[kjj]

First, let me say this: Freicoin looks like an interesting experiment.  It appears that Freicoin proponents have a comprehensive economic theory, which appears wrong to me, but I could be wrong myself.

I, for one, would LOVE to hear it.

http://freico.in/about/  

I hate to be the one to say it, but that freicoin manifesto is a cesspit of keynesian gibberish and populist nonsense.  Calling it a "comprehensive economic theory" is to go zero for three.

Well, its a comprehensive economy theory. You may just happen to disagree with it.   As an aside the Freicoin network now has around 5GH/s hashing power. I couldn't be happier with how people from all over the globe have pitched in to help this fledgling cryptocurrency take off.

See Scrybe's post just before this one.

That document does not describe any theory, does not appear to be about economics so much as jealousy, and can hardly be thought of as comprehensive.  Zero for three.

[bitfreak!]

Please provide at lease SOME detail on what your basis is for stating that a stable number of coins is required. I'm still waiting for anything better than a blanket assertion.

At this point I am completely unconvinced that losing some or even most BitCoins is a bad thing, as long as everyone understands that they are lost forever (or until the theoretical possibility of cracking keys allows limited reclamation.)

Well a few pages back we already began discussing some unhealthy scenarios which can develop from an infinitely deflationary currency. Some of this discussion has been quoted below. If you can follow up where the argument stopped and provide some solid counter-points I will consider them seriously. But you also bring up another good point about cracking keys; eventually most coins will come back into circulation when keys become easy enough to crack, and it's possible a situation like this could flood the market with lost coins which have been out of circulation for a long time. This idea to re-mine lost coins could help to offset any situation like that because it will help stabilise the money supply and not allow it to dwindle down to a dangerous or risky point were a sudden inflow of coins could cause great harm to the economy.

Here's one reason I can think of why infinite deflation is not healthy, and I'm sure there are many more potential problems. Consider an example where at some point far in the future enough coins have been lost that we only have 100 left in active use. Now imagine a day where someone digs up an old private key out of a dusty old box in the attic of their new house, and that key gives them access to an address which holds 100 bitcoins, or even more. Imagine what that would do to the economy if that person now owned more wealth than the entire economy combined. This is just one simple reason why it's inherently unhealthy.

I don't see anything inherently unhealthy about this scenario.

Uh huh... nothing at all unhealthy about it.

Note that you are contradicting yourself a bit here.  Either the 100 BTC associated with that dusty address were not "lost", since they were recoverable in which case they should have been considered part of the currency supply, or they were lost and then were "re-mined" by the person who dusted off the private keys, which is an ability you are saying is "superior".

There are several faulty lines of logic used here. First of all the bitcoins were lost for a long time, but they were found again when the person found the private key in a dusty box. This is not really how bitcoins are lost, they are lost when private keys are destroyed and not recoverable. However, in this case, the private key was written down physically so it was possible to find it again. At this fictional point in the future, it will have been a very long time since the market saw any single account holding such a large amount of bitcoins. As far as the market is concerned, there is essentially only 100 bitcoins in active circulation. Also keep in mind that I am describing bitcoin as it is now, where coins cannot be re-mined, to illustrate why infinite deflation is unhealthy. Reintroducing an amount of coins which appears to be equal to the entire amount left in circulation after hundreds or thousands of years of deflation in the money supply, is going to cause some large upsets. Now in the case where it's possible to re-mine coins, if that person found the key sitting in an old dusty box, and it had remained untouched for over 100 years, the coins would already be gone. In fact if he found those coins 99 years after they were first active, he could use them; but in such a scenario the re-mining process has ensured a stable money supply, meaning his newly acquired 100 bitcoins will have no dramatic effect on the market because there are still nearly all bitcoins in circulation.

Imagine a scenario where gold has been lost into the deepest part of the ocean over time until there is only 100 kilograms of gold left in active use in the world.  Now imagine someone opens an old dusty trunk in the attic and finds 100 kg of gold.  Same thing.

Once again this is not the "same thing". When bitcoins are lost they become inaccessible. Gold at the bottom of the ocean is still accessible to those who have the motive. We drill oil from some insanely deep places. And if we lose a majority of our gold in the ocean, there's going to be an extremely big motive for people to go get it. Furthermore, and more importantly, it's very unlikely that we will ever lose a considerable amount of gold in a place which makes it virtually impossible to recover. Bitcoin is entirely different. It's extremely easy to lose with one wrong move, and any single time that any amount of BTC is lost, it goes into a state where it's virtually impossible to recover. Nearly every time we lose gold it's going to be in a state where it's fairly easy to recover. So there are clearly some huge flaws in this analogy, just like all your other analogies.

[DeathAndTaxes]

Well lots of flaws there.

1) Your system would only "expire" coins after 100 years so a huge number of coins found which were previously "lost" for 99 years would have the same shock/impact on the system.

2) Your system would result in chaotic amounts of supply.  Coins are "lost" at a regular pace and thus they won't expire at a regular pace.  The supply will jump chaoticly 100 years after periods when a spike of lost coins occured.

3) You system wouldn't have any effect until 100 years.  If deflation is truly an issue it is very likely Bitcoin will fail or be replaced decades prior to the system ever retiring the first coin.  If the system does last a century it likely doesn't need any change.  The economy has adapted to the concept of a slowly and regularly deflating currency.  The worst possible thing would be sudden and rampant inflation (which could be well over 50% on an annualized basis).

4) Your belief that Bitoins being lost =/= Gold being lost is flawed because you think a crypto algorithm will never be compromised.  The history of crypto-analysis has shown that to be incorrect.  In time RIPEMD-160 and/or ECDSA will be compromised and thus coins can be "remined" by treasure hunter.  This is very similar to gold from shipwrecks being recovered due to the improvement of technology over time. 

BTW you still haven't proven that there is a problem with inflaiton or deflation.  The issue with inflation isn't INFLATION ITSELF.  There is absolutely nothing wrong with inflaiton if it is fair.  Hypothetically tomorrow imagine all your USD double.  All the cash in your pocket, all the money in your bank, the value of any bonds or CDs, etc.  Also your wages double and all prices double.  Has anything changed?  Nope.  The issue with Fractional Reserve Banking is that INFLATION OCCURS UNEQUALLY.   There is a lag from the creation of new money to the change in prices.  Those close to the top of the pyramid (central banks, banks, major corporations, the ultra wealthy) can PROFIT from inflation.   Since money isn't wealth, money is an accounting system if someone is profiting then someone is suffering a loss.  Fractional Reserve Banking and the unequal inflation that comes with it is a mechanism for transfering the wealth not from the 99% but more like the 99.99% to the 0.01%.

[bitfreak!]

1) Your system would only "expire" coins after 100 years so a huge number of coins found which were previously "lost" for 99 years would have the same shock/impact on the system.

2) Your system would result in chaotic amounts of supply.  Coins are "lost" at a regular pace and thus they won't expire at a regular pace.  The supply will jump chaoticly 100 years after periods when a spike of lost coins occured.

These two points are basically addressing the same point. To answer the first point specifically, there wouldn't really be a "spike" because the coins would be re-mined at the same rate they were lost. So maybe if we had a spike of coins lost within the same week or something, it might cause a little market turbulence. However, the idea is to make the time period for coin expiry short enough to make sure the money supply hasn't experienced too much deflation via lost coins, but also long enough to ensure people aren't terribly inconvenienced or feel threatened by it. If you were to graph the change in the money supply under this system, it would show some sort of waveform. However, this wave form will eventually flatten out, because as I mentioned a few pages ago, once the re-mining process begins it will continue without stopping, so that on any day after re-mining starts, the system is re-mining any coins lost 100 days before that time.

3) You system wouldn't have any effect until 100 years.  If deflation is truly an issue it is very likely Bitcoin will fail or be replaced decades prior to the system ever retiring the first coin.  If the system does last a century it likely doesn't need any change.  The economy has adapted to the concept of a slowly and regularly deflating currency.  The worst possible thing would be sudden and rampant inflation (which could be well over 50% on an annualized basis).

I'm thinking in the very long term here. The amount of deflation incurred via lost coins in the next 100 years is certainly not going to pose any hazard to the bitcoin economy imo, but that's not the point. The point is building a system capable of dealing with and removing that threat of having a high enough degree of inflation that bringing in a large amount of coins via recovery of large amounts of extremely old coins or some other method, such as crackers finding ways to crack private keys. 100 years simply isn't enough to time to measure the problem, and if bitcoin lasts the next 100 years nicely, it does not mean that infinite deflation wont eventually lead to problems.

4) Your belief that Bitoins being lost =/= Gold being lost is flawed because you think a crypto algorithm will never be compromised.  The history of crypto-analysis has shown that to be incorrect.  In time RIPEMD-160 and/or ECDSA will be compromised and thus coins can be "remined" by treasure hunter.  This is very similar to gold from shipwrecks being recovered due to the improvement of technology over time.

Yes I agree, I do believe that these algorithms will eventually be easily cracked, I've noted that several times. And that is a fair analogy to gold, but I still must note one important thing; the time it takes for those algorithms to be compromised, and the time it takes for their successors to be compromised, is highly random and very unpredictable, and could be more than 100 years. Furthermore, the recovery of the lost coins in that way wont be regulated by the normal mining process and may flood the market in very small periods of time. In reality we are highly unlikely to recover any substantial amount of gold from the deep ocean within a small period of time. This is why the main advantage of my system is to help offset the potential harm which can be caused by a sudden influx of inactive coins, by keeping the money supply at a relatively stable and high level.

BTW you still haven't proven that there is a problem with inflaiton or deflation.  The issue with inflation isn't INFLATION ITSELF.  There is absolutely nothing wrong with inflaiton if it is fair.

That's something I have also noted. The Governments of the world could technically keep causing inflation forever, and businesses could just keep raising prices and paying us more and so on. I'm not sure how they could create a "fair" amount of inflation, but as you noted it does generally cause an effect which can benefit certain people unfairly compared to others. Perpetual deflation can unfairly benefit people who have lots of bitcoins, which is something I don't particularly mind because presumably they have risked a lot on bitcoin. However what I do mind is when people can unfairly find high amounts of coins when a high amount of the money supply has already been lost (think very long term). Inflation can cause similar problems when money keeps being injected into circulation to maintain liquidity and help service debts, but keeps being sucked up by the most powerful corporations on Earth and filtered up to their top share holders. I would be willing to bet that some of these people now hold enough money to cripple the economy of multiple nations.

[scrybe]

Well a few pages back we already began discussing some unhealthy scenarios which can develop from an infinitely deflationary currency. Some of this discussion has been quoted below. If you can follow up where the argument stopped and provide some solid counter-points I will consider them seriously. But you also bring up another good point about cracking keys; eventually most coins will come back into circulation when keys become easy enough to crack, and it's possible a situation like this could flood the market with lost coins which have been out of circulation for a long time. This idea to re-mine lost coins could help to offset any situation like that because it will help stabilise the money supply and not allow it to dwindle down to a dangerous or risky point were a sudden inflow of coins could cause great harm to the economy.

Cracking Keys is an exception case that needs to have a minimal planning performed now, but will have unique needs depending on when and how it is broken. Your proposal to re-mine lost coins will not prevent anyone from cracking this encryption, nor will it protect any coins. The only effect your policy would have is forcing some users who didn't have their coins stolen in the first 100 years of bitcoin to move them to a new cipher or lose them. If the break in encryption comes before your re-mining mechanism kicks in then there is no effect at all. Re-mining does not improve the cracked encryption scenario practically, agreed?

Here's one reason I can think of why infinite deflation is not healthy, and I'm sure there are many more potential problems. Consider an example where at some point far in the future enough coins have been lost that we only have 100 left in active use. Now imagine a day where someone digs up an old private key out of a dusty old box in the attic of their new house, and that key gives them access to an address which holds 100 bitcoins, or even more. Imagine what that would do to the economy if that person now owned more wealth than the entire economy combined. This is just one simple reason why it's inherently unhealthy.

You keep referencing "infinite" which means "going on forever" the very use of that word implies that there is no end or curve, but it just goes and goes "TO INFINITY!" Given a realistic situation as bitcoins get lost more and more rational people will place a higher and higher value on the remaining coins. Since they are worth more, extra care will be take to ensure that they are NOT lost, and you will end up with a long tail of deflation that reaches the FAR FAR future long before the number of BitCoins can realistically reach a point that it is unusable. Even if 1 million years from now there is only 1 Satoshi left that is an acceptable end for me, since that 1 satoshi will be worth a fortune in bitcoin 7.0 or something. Even if we lose 1% of all BTC every year, we will have a functional economy for generations before we need to add precision. Your infinity problem is so much farther than 100 (or likely even 1000) years away. We will not see bitcoin erode into something unusable within your lifetime by your own admission, right?

There are several faulty lines of logic used here. First of all the bitcoins were lost for a long time, but they were found again when the person found the private key in a dusty box. This is not really how bitcoins are lost, they are lost when private keys are destroyed and not recoverable. However, in this case, the private key was written down physically so it was possible to find it again. At this fictional point in the future, it will have been a very long time since the market saw any single account holding such a large amount of bitcoins. As far as the market is concerned, there is essentially only 100 bitcoins in active circulation. Also keep in mind that I am describing bitcoin as it is now, where coins cannot be re-mined, to illustrate why infinite deflation is unhealthy. Reintroducing an amount of coins which appears to be equal to the entire amount left in circulation after hundreds or thousands of years of deflation in the money supply, is going to cause some large upsets. Now in the case where it's possible to re-mine coins, if that person found the key sitting in an old dusty box, and it had remained untouched for over 100 years, the coins would already be gone. In fact if he found those coins 99 years after they were first active, he could use them; but in such a scenario the re-mining process has ensured a stable money supply, meaning his newly acquired 100 bitcoins will have no dramatic effect on the market because there are still nearly all bitcoins in circulation.

This is simply economic uncertainty, and should be part of the investor equation. Anyone investing in BitCoins when there are only 100 left should know that there USED to be 21 million, and that there is a chance that some will come back online. This is a risk to investing in bitcoin that is infinitesimal right now, but will grow over time as coins are lost, why would future investors not be aware of it? The problem is that the chance of "crashing" the bitcoin economy with found coins will require either a LOT of coins, or a LOT of lost coins, but again, this is a risk, not a certainty. Risk of devaluation due to an event like this is real, but unlikely. Are you proposing that we have to build a perfect system that does not require diversification of investments?

I don't see anything here that says that deflation over a long time is bad, or that we need to weaken bitcoin to prevent risk in the future.

[bitfreak!]

Cracking Keys is an exception case that needs to have a minimal planning performed now, but will have unique needs depending on when and how it is broken. Your proposal to re-mine lost coins will not prevent anyone from cracking this encryption, nor will it protect any coins. The only effect your policy would have is forcing some users who didn't have their coins stolen in the first 100 years of bitcoin to move them to a new cipher or lose them. If the break in encryption comes before your re-mining mechanism kicks in then there is no effect at all. Re-mining does not improve the cracked encryption scenario practically, agreed?

I never said anything which would imply that my proposal to re-mine coins would prevent anyone from cracking the encryption. I said it would help offset the problems caused when we do need to change over to a new encryption scheme, and the lost coins which aren't safely secured in a new address are recovered. If this were to happen when the money supply is very low, all those recovered coins will upset the market in a drastic way. But it will also happen in other scenarios, such as if someone finds a large stash of lost bitcoins after the money supply is already very low. By maintaining a near-max and stable money supply none of these problems can manifest into reality, thus proving the superior nature of a stable money supply.

You keep referencing "infinite" which means "going on forever" the very use of that word implies that there is no end or curve, but it just goes and goes "TO INFINITY!" Given a realistic situation as bitcoins get lost more and more rational people will place a higher and higher value on the remaining coins. Since they are worth more, extra care will be take to ensure that they are NOT lost, and you will end up with a long tail of deflation that reaches the FAR FAR future long before the number of BitCoins can realistically reach a point that it is unusable. Even if 1 million years from now there is only 1 Satoshi left that is an acceptable end for me, since that 1 satoshi will be worth a fortune in bitcoin 7.0 or something. Even if we lose 1% of all BTC every year, we will have a functional economy for generations before we need to add precision. Your infinity problem is so much farther than 100 (or likely even 1000) years away. We will not see bitcoin erode into something unusable within your lifetime by your own admission, right?

It doesn't matter how good we become at making sure coins don't get lost, because they will always continue to get lost, so it is infinite no matter how you look at it. And the problem I'm putting forward has nothing to do with the money supply reaching a level which is too small to use, it's the potential problems which can arise when the money supply has become that small; such as sudden and unexpected recovery of long lost coins, which can unfairly put certain individuals in a very powerful positions. And the fact that the level of deflation in my life time wont pose any problem does not negate the fact eventually we will see problems, whether it's in my life time or 10 generations from now. The point is we need a secure and robust currency capable of lasting countless generations.

This is simply economic uncertainty, and should be part of the investor equation. Anyone investing in BitCoins when there are only 100 left should know that there USED to be 21 million, and that there is a chance that some will come back online. This is a risk to investing in bitcoin that is infinitesimal right now, but will grow over time as coins are lost, why would future investors not be aware of it? The problem is that the chance of "crashing" the bitcoin economy with found coins will require either a LOT of coins, or a LOT of lost coins, but again, this is a risk, not a certainty. Risk of devaluation due to an event like this is real, but unlikely. Are you proposing that we have to build a perfect system that does not require diversification of investments?

It doesn't matter if future investors are or are not aware of it, the risk should preferably not be there in the first place if it's possible to avoid that risk, which it is by maintaining a stable money supply. The unhealthy economic hazards generated by infinite inflation and infinite deflation are both unnecessary hazards which can be removed from the equation by implementing the most reliable economic system; a limited stable money supply with high divisibility. I strongly believe that the only things which should apply a force on the market price of any currency should be natural market forces such as supply and demand, and not a change in the size of the money supply, whether by increasing the money supply or decreasing it. Price deflation will happen naturally under a stable system, you don't need to have a declining money supply.

[scrybe]

Re-mining does not improve the cracked encryption scenario practically, agreed?

(paraphrased) Agreed, but my proposal would help keep more coins in circulation, eventually.

We will not see bitcoin erode into something unusable within your lifetime by your own admission, right?

(paraphrased) Right, and I'm talking about the case where we have a usable but small number of coins that could be destabilized. (less than 50%? some other level? where do problems happen? what level do we need to maintain?) You are concerned with multi-generational use.

This is simply economic uncertainty, and should be part of the investor equation. Are you proposing that we have to build a perfect system that does not require diversification of investments?

Yes, and I strongly believe that the only things which should apply a force on the market price of any currency should be natural market forces such as supply and demand.

I snipped your points down for brevity, and to get verify my understanding. Please correct me if I missed your intent on them.

I see one risk scenario presented repeatedly, the re-introduction of "lost" bitcoins causing destabilization. Are there other scenarios that your proposal would help outside of this?

In fact by re-introducing large numbers of coins lost (to hackings or other events already past, and more in the future) you are causing the very event that you are talking about preventing.

4 more questions:

Please explain how your mechanism, that will certainly cause destabilization by re-introducing large amounts of lost coins once every 5 generations, is superior to the current solution that only has the potential to cause a similar destabilization in a rare event (that should have plenty of warning.)

Irreversibility of transactions is a key component of BitCoin, is this threat larger than those posed by reversible transactions needed for reclamation?

Why do you assume that you are smarter and better able to plan for their future than your actual great-great-great-grandchildren?

How does your economic theory behind this proposal handle multiple existing and many potential new currencies with different inflationary, deflationary, noninflationary, demurrage, pure-debt, and others? Are you considering a marketplace or basket approach, or treating BitCoin as an exclusive currency?

[bitfreak!]

I see one risk scenario presented repeatedly, the re-introduction of "lost" bitcoins causing destabilization. Are there other scenarios that your proposal would help outside of this?

The basic idea is that it will fix any problems that are associated with infinite deflation. I have described how some of those problems may occur, but there are probably other benefits that come with a stable money supply which we haven't explored yet.

In fact by re-introducing large numbers of coins lost (to hackings or other events already past, and more in the future) you are causing the very event that you are talking about preventing.

As I already explained, the only disturbance will be when the re-mining process starts, because after it starts it would continue every day re-mining coins lost 100 days before that day, it would not be a reoccurring problem. The reason for making it 100 years is because if the re-mining process begins in 100 years it wont cause much of a disturbance, and it's long enough to make people feel safe with the re-activation process. As I vaguely explained, if this process where graphed one would expect to see an oscillating waveform pattern which evens out rather quickly. And the advantage of this is that we can maintain a high percentage of active coins and a stable money supply, so in the future (much more than 100 years) there is no risk of sudden lost coin influxes.

Please explain how your mechanism, that will certainly cause destabilization by re-introducing large amounts of lost coins once every 5 generations, is superior to the current solution that only has the potential to cause a similar destabilization in a rare event (that should have plenty of warning.)

Once again, nothing will reoccur every 100 years, nor will a problem even occur once, since if the re-mining process does begin in 100 years, we will still be mining new bitcoins and the amount of coins lost will not be anything to worry about; bringing back those lost coins in 100 years at the same rate they were lost would not cause any real disturbances. From that point the network would adjust to the new system and it will be smooth sailing from that point on... so put another way, the size of the money supply should be expected to fluctuate around a level equal to the maximum size of the money supply minus the average number of coins lost within 100 years.

Irreversibility of transactions is a key component of BitCoin, is this threat larger than those posed by reversible transactions needed for reclamation?

It's not exactly the same as making transactions irreversible, because first of all the coins are actually re-mined and distributed to miners who input energy to recover them. This is the main advantage that my system has compared to simply letting lost coins be recovered when cryptographic algorithms become compromised; it's impossible to regulate at what speed and difficulty those coins can be recovered. And by maintaining a high percentage of active coins we offset the potential damage which can be caused when lost coins are recovered by hackers, as I've explained multiple times. And second of all, it's extremely easy to stop the re-mining of any coins and you have 100 years before there's any chance of anything being reversed.

[franky1]

a few hundred years ago many wooden boats with their chests of gold sunk to the bottom of the sea, too deep to ever get to the gold ever again.

more recently gold is being used to make objects and those objects end up in land-fills never to enter circulation again..

trying to get to that gold is not called helping the economy. its called treasure hunting and trying to get rich off of other peoples forgetfulness..

i DO NOT condone any activity where someone can sweep my address if i left the funds in there for a few decades. its mine.



(replace the word gold with btc in this next statement)
if you want gold then buy some at a shop/ goldsmiths. DONT try imposing a law that if gold is not recirculated within 20 years, then it can be taken off of you.

[SimonL]

a few hundred years ago many wooden boats with their chests of gold sunk to the bottom of the sea, too deep to ever get to the gold ever again.

more recently gold is being used to make objects and those objects end up in land-fills never to enter circulation again..

trying to get to that gold is not called helping the economy. its called treasure hunting and trying to get rich off of other peoples forgetfulness..

i DO NOT condone any activity where someone can sweep my address if i left the funds in there for a few decades. its mine.



(replace the word gold with btc in this next statement)
if you want gold then buy some at a shop/ goldsmiths. DONT try imposing a law that if gold is not recirculated within 20 years, then it can be taken off of you.

99% of us here agree with you, even Gavin said that doing anything about reclamation of lost coins is "Bottom line: ain't gonna happen" https://bitcointalk.org/index.php?topic=79576.msg882591#msg882591

It's also been rehashed in at least 10 other threads in the last 2 years. I'd urge you not to get dragged into bitfreak's craving for lecturing. He has been condescending, patronising, dismissive and is completely self-absorbed in his "lost coins". He is what I like to call a believer. He believes so completely in his own opinions, all that is left for him to do is to get others round to his way of thinking. I have already made my case, and he has conveniently ignored my points if he couldn't easily argue around them, spoke patronizingly and insultingly to nearly everyone here, even longtime forum members, and lastly, continually fails to take a hint, as if the open hostility shown towards him were somehow reassurance he is on the right track.

Hit the ignore button like I did and mosey on to the next thread dude.

[bitfreak!]

a few hundred years ago many wooden boats with their chests of gold sunk to the bottom of the sea, too deep to ever get to the gold ever again.

more recently gold is being used to make objects and those objects end up in land-fills never to enter circulation again..

trying to get to that gold is not called helping the economy. its called treasure hunting and trying to get rich off of other peoples forgetfulness..

We have already gone over these analogies to gold, and while they are partially true, they are still full of holes because 1) it's extremely easy to lose bitcoins in the "deep dark ocean" with one wrong move and 2) unlike gold all bitcoins lost go straight to the bottom of the sea and 3) we can eventually recover such gold in a slow and difficult recovery/re-mining effort. As it stands right now we will only ever recover lost coins by waiting until certain protection mechanisms weaken to a point where it forces bitcoin to move over to new encryption algorithms, and such a situation may lead to a sudden and unregulated influx of long lost coins. As I have already explained in great detail, a re-mining process can offset this risk by regulating the recovery process and making sure that we never have too many lost coins ready to be recovered and disturb the market.

(replace the word gold with btc in this next statement)
if you want gold then buy some at a shop/ goldsmiths. DONT try imposing a law that if gold is not recirculated within 20 years, then it can be taken off of you.

Like many other similar statements made in this thread, that statement does not match the reality of the situation. Firstly, I don't "want bitcoins" by re-mining from others, I will be dead by the time the re-mining process even starts and I would still need to input energy to re-mining the coins just like any other miner. Second of the all the system is not designed to make sure coins are circulating, if you want to keep your coins all it takes it one simple action to indicate that your coins are still active by sending a tiny amount from the old address to any of your other addresses. To use our gold analogy, this would be like shifting a small amount of gold from one of your safes into another one of your safes, you haven't recirculated any coins to anyone else in the process and your coins remain yours for another 100 years.

[bitfreak!]

It's also been rehashed in at least 10 other threads in the last 2 years. I'd urge you not to get dragged into bitfreak's craving for lecturing. He has been condescending, patronising, dismissive and is completely self-absorbed in his "lost coins". He is what I like to call a believer. He believes so completely in his own opinions, all that is left for him to do is to get others round to his way of thinking. I have already made my case, and he has conveniently ignored my points if he couldn't easily argue around them, spoke patronizingly and insultingly to nearly everyone here, even longtime forum members, and lastly, continually fails to take a hint, as if the open hostility shown towards him were somehow reassurance he is on the right track.

Hit the ignore button like I did and mosey on to the next thread dude.

Just when I thought this debate was reaching a calm and rational level of discussion you have to start slinging around turds to make a point. The "the open hostility shown towards me" only reassures me of the fact that some people here are extremely emotional individuals. Perhaps you should take a look in the mirror and realise the condescending and dismissive attitude is extremely prevalent in your own approach. Furthermore, you are the one who stopped our discussion mid-way when I provided a counter-point which you presumably could not counter yourself.

Now lets get back on track please. Keep me ignored and stop reading this thread if it upsets you. Otherwise present your opinion in a calm and rational way if you want me to listen.