Worried about coins being lost? You have bigger worries!

[WiW]

With the general theme of these forums these day, let me indulge you in another "the sky is falling and bitcoin is doomed" scenario. If you think bitcoins getting lost forever is a problem, then you have bigger issues than you may think.

See, Satoshi started mining on his own, before critical mass came to start taking up the mining business. He was obviously able to mine huge amounts of bitcoins. I'm talking about huge amounts. You know, like on the order of a million at least. Now Satoshi has one of two options: keep the bitcoins or lose them. Which do you think he chose?
If he decided to keep them, you're assuming he may or may not run off with his money now. He could easily sell off everything he has and make a nice multi-million dollar profit, probably wreaking havoc and panic for bitcoin and possibly destroying all trust in the currency with a bigger flashcrash than ever seen before in the bitcoin market.
If he decided to lose them, then the designer of bitcoin himself destroyed something on the order of a million or more bitcoins. Would the designer of this beautiful system do that if he thought destroying bitcoins was a problem?

Of course, there is the possibility that he's keeping the coins and plans to pass it on as inheritance over many generations, perhaps spread donations to noble causes, etc. etc. But then, my "trust no one" friends, I hope for all our sake that he destroyed them rather than hope that he is more of an altruist than a hedonist.

What most people fail to realize is that bitcoin is in/deflation neutral. This means that bitcoin doesn't care about inflation and deflation. So what if a pizza costs 10,000 BTC or 0.5 BTC? Bitcoin will still work just as well. You'll just have to deal with the fact that prices change. Get over it.

Edit: It's probably worth noting that bitcoins being destroyed is good for most people. That means there are less in circulation and yours are worth more.

[Lethn]

Thank you! Someone who actually understands economics! Bitcoin doesn't get affected by price changes the same way paper money does, it's only merchants and traders that get worried about exchange rates and so on and yes prices change all the time, it's the people that decide that now so you have to decide whether or not something is actually worth that many Bitcoins rather than automatically tie it to your countries' currency.

*sigh*

[markm]

Satoshi, Satoshi... Isn't he the guy that made a fortune on the internet, married into the Rothschild (holy cow even my spellchecker has heard of them!?!? Where is my tin hat?!?!!) family, bought a few more minor nations for their collection, and fathered Spender the Terrible, Scourge of the Markets in the early 21st century?

Do I smell a novel here... "Spender's Game"...

-MarkM-

[Beepbop]

If an early adopter suddenly were to - by accident maybe - dump a couple of million BTC at the market at once, wouldn't that cause a massive flash crash and hyperinflation? Merchants, but also anyone else dealing in BTC would have to live with that risk of a several thousand percent fluctuations.

Bitcoin wallets getting lost - "shot into space" - is not a big problem for the rest of the users, that's what happens if the lost wallets suddenly re-appear like some sort of gold meteorite.

[Come-from-Beyond]

I can't find a link right now, but I recall some (british?) scientists analyzed all transactions and proved that most part of bitcoins (>50%?) belong to one person.

[Sukrim]

I can't find a link right now, but I recall some (british?) scientists analyzed all transactions and proved that most part of bitcoins (>50%?) belong to one person.

A transaction sharing 2 inputs is unfortunately only a strong hint, not a proof of ownership.
This might have been true a few years ago by the way, nowadays coins seem to be more dispersed.

[Come-from-Beyond]

I can't find a link right now, but I recall some (british?) scientists analyzed all transactions and proved that most part of bitcoins (>50%?) belong to one person.

A transaction sharing 2 inputs is unfortunately only a strong hint, not a proof of ownership.
This might have been true a few years ago by the way, nowadays coins seem to be more dispersed.

Don't forget that 5 M BTC were mined during first 2 years. If 4 M belongs to one person it's still a big part of the whole supply (19%).

[scatha]

If I had a million BTC I would keep the bigger part of it in a safe wallet and only once and a while sell a few of them, and pay out a few friends and fund some beneficial institutions.

[Buffer Overflow]

Maybe Satoshi is gradually selling his/her coins even as we speak. Gradually drip feeding them into the market.

[Sukrim]

You'd see some old coins being moved then, most of the early mined 50 BTC outputs still lie dormant. They are either lost or stored long term. OP is worried about option 2

[lassdas]

Don't forget that 5 M BTC were mined during first 2 years. If 4 M belongs to one person it's still a big part of the whole supply (19%).

I'd say that's more than unlikely.
I myself started mining in early 2010 and I'm pretty sure there were a bunch of others way earlier than me.

Look at the difficulty history and try an educated guess: Satoshi might have mined most of the first 30k blocks himself (which, I think, is still unlikely), 30k*50=1.5million.
That's probably about the most he ever mined.

If he already sold them, or kept them, who knows, but who cares anyway?
He probably hasn't "lost" them.

[greyhawk]

Actually, if you read the old cryptography newsgroup and the blockchain, you can see that Satoshi produced the genesis block, then nothing at all happened for about the week, then he first announced availability of the client and only started to mine the first blocks few minutes later. From what I saw people were rather quick to test out the client themselves, so let's assume he had about an hour's time to "premine" alone.

Millions indeed.

[WiW]

Actually, if you read the old cryptography newsgroup and the blockchain, you can see that Satoshi produced the genesis block, then nothing at all happened for about the week, then he first announced availability of the client and only started to mine the first blocks few minutes later. From what I saw people were rather quick to test out the client themselves, so let's assume he had about an hour's time to "premine" alone.

Millions indeed.

You're hypothesizing as much as I am. Neither of us are provably correct, but both of us describe plausible scenarios. Either way, most bitcoins from the dawn of bitcoin are dormant, so the situation hasn't changed. If bitcoins being lost were an issue for Satoshi, there would be some design decision in the protocol to recover them - he obviously knew that bitcoins were going to be lost over time.

I'm not worried about Satoshi owning millions of coins. I don't think the sky is falling. I'm kind of just poking fun at all the doomsayers on these forums. I think everything is great and Satoshi made a brilliant machine. The only thing left to do is follow through and remove the max block size limit like he wanted (according to the design of the protocol) and let bitcoin roll!

[Come-from-Beyond]

Btw, I know when we see who Satoshi is. When Forbes publish his photo with "The 1st Trillionaire" title.

[WiW]

Btw, I know when we see who Satoshi is. When Forbes publish his photo with "The 1st Trillionaire" title.

Except that by then we'll all be "trillionaires", seeing as the dollar will be worthless.

Perhaps he will be the first trillionaire in satoshis

[mestar]

What I would like to see is a picture where you can see how long has each bitcoin bin untouched.  Perhaps something like this already exists.

On this picture you would see the untouched virgin coins, as well as the general activity all in one picture.


X axis would be "time last touched", y axis would be "time generaged".  Like this,  if 5 blocks were generated, and no transactions were made:

Code:

x
 x
  x
   x
    x

If first 100 were spent in the last block:

Code:

.   x
 .  x
  x
   x
    x

Of course, this would be a bitmap, and each pixel could present 200 blocks or something.

[WiW]

What I would like to see is a picture where you can see how long has each bitcoin bin untouched.  Perhaps something like this already exists.

On this picture you would see the untouched virgin coins, as well as the general activity all in one picture.

http://blockchain.info/charts/bitcoin-days-destroyed-cumulative

Calculate the total number of bitcoin days and subtract this. You'll get number of bitcoins * staleness.

[Sukrim]

...which is around 60% atm by the way.

[Blinken]

My understanding is that there are no addresses with such large amounts of coins, so if somebody has a million coins he has divided them into many addresses.

[Come-from-Beyond]

My understanding is that there are no addresses with such large amounts of coins, so if somebody has a million coins he has divided them into many addresses.

He did even a better thing. He left generated coins untouched to make us believe the keys were lost.