Proposed solution to "lost coins"

[Tehfiend]

I see no need to recover lost coins. If they are lost, then the only meaningful recovery (restoration to their owner) is impossible. There is a real issue that gradual waste of bitcoins over many years will eventually, by laws of mathematics, result in there being almost no bitcoins remaining on wallets where people can recall the keys.

What "law of mathematics" would that be exactly?

The only solution to that is to change the software to allow new coin creation at a rate that equals or exceeds such loss. However, it is impossible to know what that rate is. At the end of the day, I think the real solution is one provided by the market -- if over some years bitcoins fall into the cracks between the couch cushions until there are too few left for any real use, hard forks and alts will take up the slack in payment processing bandwidth. There is no need to take any action with respect to bitcoin software today, as this will happen whether we like it or not.

No that is not the only solution. Recycling lost coins is also a solution which addresses the problem you mention. The point of recycling is to maintain the intended 21 mill coin supply.

[1714099750]

1714099750

[1714099750]

1714099750

[JoelKatz]

There is a real issue that gradual waste of bitcoins over many years will eventually, by laws of mathematics, result in there being almost no bitcoins remaining on wallets where people can recall the keys.

That's a solved problem. The real issue is the costs of an unpredictable monetary supply. What's Bitcoin's primary advantage over fiat? The supply is predictable. Lost coins will erode that advantage.

[RenegadeMind]

Bitcoins are infinitely divisible. Just update protocol to store value in a 128 bit integer instead of the current 64 bit integer. That would satisfy the decimal place need for a loooong time. When you bring back lost coins, you dilute the aggregate value of everyone's bitcoins, similar to what happens when the Fed prints USD.

I see this come up a lot, Bitcoins are not infinitely divisible.

Each bitcoin is subdivided into 100 million smaller units called satoshis, defined by eight decimal places.

0.00000001 is the smallest amount you can spend. If you remove the decimal point it becomes easier to visualize with whole numbers.

So if we changed the protocol to use a 128-bit integer for the Tx value as opposed to the current 64-bit integer, you are saying we couldn't use the extra bits for more decimal places? Why not? Yes, we would also have to update the "scaling factor," but we coud keep 1 BTC = 100,000,000 satoshis, and 1 satoshi = 100,000,000 or so integer units of the 128-bit integer.

Think of it like this: 1 BTC represented as a binary 64-bit integer (how it is now):

Code:

0000000000000000000000000000000000000101111101011110000100000000

1 BTC represented as a binary 128-bit integer:

Code:

00000000000000000000000000000000000000000000000000000000000000000000000000100011100001101111001001101111110000010000000000000000

21,000,000 BTC represented as a binary 128-bit integer:

Code:

00000000000000000000000000000000000000000000000000101100011110000001111101110000100011000101000010011111010000000000000000000000

So you see, with a 128-bit integer and the scale factor 1 satoshi = 100,000,000 128-bit integer units, we can add more decimal places. There are still many unused bits on the left, so we could use a larger scale factor for even more decimal places.

I think there's a general issue with "can" as it is used both in the present and future time. At the moment (i.e. right NOW), you "can't", but given a move to 128-bit integers, then you can.

BTW - I liked your explanation there. Nice and clear.

[Zeke_Vermillion]

Joel, I don't think the problem is solved. Rather we're arguing over whether it's a problem. As far as I am aware, the only solution to lost coins is that BTC are divisible to high precision. The argument being that even if there are only 10 BTC left on wallets for which people remember the key, then there are actually 10 hundred million units available. And btc-using apps will adapt to this. But I find this argument lacking, much as the economic argument that oil is not scarce (ie, there will always be some oil b/c as the price of oil responds to scarcity, market, and extraction difficulty, there is always enough oil to meet demand). But actually what happens is you approach an asymptote of peak oil, and alternative energy sources replace it in the market. Or with bitcoin, the cost of using available blockchain space becomes very high and alt chains become more attractive.

[TierNolan]

But actually what happens is you approach an asymptote of peak oil, and alternative energy sources replace it in the market.

That is what it means to say we won't run out.  The price goes up, so people who really need it (or more to the point will pay).  There is still always oil available to buy, but it is expensive.

Or with bitcoin, the cost of using available blockchain space becomes very high and alt chains become more attractive.

Block chain space has nothing to do with the number of lost coins.

[Zeke_Vermillion]

blockchain space doesn't relate to coins? I guess I am running up against the limits of my technical knowledge of btc. i assumed that you need at least one / 100,000,000 coins to transmit any information over the btc network. if only a small number of these dust units are accounted for in the world, say 50 years hence, then there will have to be a lot of workarounds accreted to core bitcoin to make it work for more than the most valuable transactions. but then, i suppose we should expect that these problems will be overcome. anyway, i am probably not describing this correctly b/c i don't understand the software fully. my point is that the bandwidth over the network, however that is defined in the code, tends to shrink over time (but admit that this is probably solvable, and i don't know enough about the technology to contribute to that discussion)

[TierNolan]

blockchain space doesn't relate to coins?

There is 1 MB of data per block at the moment.  The space requirements are determined by the number of transactions.

Lost coins don't add any extra data to the block chain.

They have to be available to be retrieved though.  However, really old coins could be stored on some disk somewhere.

[Zeke_Vermillion]

I will be lazy instead of learning to read the code. Can the block size increase dynamically, or is there a hard-wired cap?

[TierNolan]

I will be lazy instead of learning to read the code. Can the block size increase dynamically, or is there a hard-wired cap?

The block size is 1MB.  However, it used to be 32MB.

You could search for max block size or something to get the discussion.

Transactions are the real limit for the network.  Every transaction has to be verified by someone.

If you keep the blocks at 1MB or lower, then everyone can easily verify and mine new blocks.

A larger block size may shift the balance to those with faster internet connections.

However, a larger block size keeps transactions fees low, which is one of the main draws of bitcoin.

The average blocks are around 0.5MB at the moment, so not quite critical yet.

The security model of bitcoin assumes network bandwidth is cheap, but hashing is expensive.

[johnblaze]

1. Propose a terrible idea and ask people to tell you why it's terrible
2. Be told why it's terrible
3. Get pissed
4. ? ? ?
5. Profit

pretty much this