Sabatoge: "Losing" Bitcoins (AKA the Goldfinger Attack)

[foggyb]

Is it possible to sabotage Bitcoin by accumulating coins (through purchase, theft, or exchange breach, etc.) and then deliberately destroy the wallet that contains the key to these coins?

Presumably these coins are henceforth lost, essentially.

[Enochian]

Is it possible to sabotage Bitcoin by accumulating coins (through purchase, theft, or exchange breach, etc.) and then deliberately destroy the wallet that contains the key to these coins?

Presumably these coins are henceforth lost, essentially.

Yes, you can permanently lose Bitcoins by losing the private keys for them, or by sending them to an address which does not correspond to a key.

When this happens, it doesn't sabotage Bitcoin, it just makes every one elses Bitcoins slightly more valuable.

[grue]

not practical, because bitcoins are divisible to 8 decimal places.

[Luke-Jr]

You guys assume the 2.1e15 units are sufficient. Which I personally doubt.

[foggyb]

How will fractional transactions be expressed if such a sabatoge took place?

Seems cumbersome to ask for 10^-8.002345 coins as payment for a product or service.

[grue]

well, the idea is totally absurd. it's like saying "let's buy all the gold in the world, and blast it into space!"

[foggyb]

well, the idea is totally absurd. it's like saying "let's buy all the gold in the world, and blast it into space!"

If an exchange attacker could hijack a lot of coins at once (totally absurd, right?) this could quite conceivably happen.

Don't make it sound like its horrendously expensive to destroy the only link to the hypothetically hijacked coins.

It isn't. Its called a hard drive shredder.

Please answer my question. I sincerely want to know the answer.

[TiagoTiago]

How is burning your own money an attack on the economy?

[foggyb]

I will be delighted if it turns out my hypothesis is incorrect.

[TiagoTiago]

No nerve; i just don't think what you describe can harm Bitcoin and it's users in any way (except the part about stealing coins from people)

[foggyb]

Can you be more specific please?

You made the analogy to burning dollars. This is obviously a very poor analogy. We can always print more dollars unless you also destroy all the ink in the world, and all the printing presses. Not to mention the fact that only a small fraction of dollars actually exist in physical form. In fact, if I burn a billion dollars, that may theoretically impact the economy in a positive way, since commissioning the printing of a billion dollars in cash will create economic growth.

Does the answer to the hypothetical sabotage lie in creating a new blockchain, or Bitcoin 2.0?

[Luke-Jr]

How will fractional transactions be expressed if such a sabatoge took place?

Seems cumbersome to ask for 10^-8.002345 coins as payment for a product or service.

Decimal people can use SI units: mBTC or μBTC

Ideally more people might adopt the Tonal system, in which case TBC is a fairly reasonable size.

See also: https://en.bitcoin.it/wiki/Units

[foggyb]

In other words, Bitcoin is INFINITELY divisible, therefore the loss of even 99.9% of all bitcoins is not a problem?

[kjj]

In other words, Bitcoin is INFINITELY divisible, therefore the loss of even 99.9% of all bitcoins is not a problem?

Yes.  Should the need ever arise, we can switch to arbitrary precision representation.

Coins that are permanently lost are essentially a gift of value to the rest of the bitcoin using world.

[Luke-Jr]

In other words, Bitcoin is INFINITELY divisible, therefore the loss of even 99.9% of all bitcoins is not a problem?

Bitcoins are only division down to 2.1e15 units. Changing that is no less difficult than increasing the total BTC count from 21 million to 21 billion, or making it infinite.

[kjj]

In other words, Bitcoin is INFINITELY divisible, therefore the loss of even 99.9% of all bitcoins is not a problem?

Bitcoins are only division down to 2.1e15 units. Changing that is no less difficult than increasing the total BTC count from 21 million to 21 billion, or making it infinite.

But far more likely to be accepted by the community.

[JoelKatz]

Is it possible to sabotage Bitcoin by accumulating coins (through purchase, theft, or exchange breach, etc.) and then deliberately destroy the wallet that contains the key to these coins?

Presumably these coins are henceforth lost, essentially.

By losing the coins, the "attacker" would also lose whatever value he had exchanged to accumulate those coins. If he stole the coins or acquired them through other nefarious means, the attack doesn't add anything except it reduces his ability to cash out.

Theoretically, a person could acquire a large number of bitcoins and then use some kind of attack to destroy other people's bitcoins. His goal would be to increase the value of the bitcoins he didn't destroy. The logic would have to be that he couldn't steal those bitcoins as easily as he could destroy them (otherwise, stealing them gives him 100% of their value, obviously more). While he would benefit from this attack (just as he would benefit from simply stealing bitcoins) he would have to divide his gain with everyone else who holds bitcoins. So it seems like it would be so inefficient that it's not worth worrying about.

Do we worry that someone will buy all the coffee in the world and then resell it for much higher prices? This would only be even remotely worth worrying about if bitcoins were so dominant that using other currencies was impractical.

[foggyb]

Do we worry that someone will buy all the coffee in the world and then resell it for much higher prices? This would only be even remotely worth worrying about if bitcoins were so dominant that using other currencies was impractical.

Bitcoins don't grow on small shrubs all over the world. And yes, there are individuals who's job is to worry about monopolies in commodity markets.

The motive behind this hypothetical attack would not be one of profit anyway. Surely you understand this.

[Enzo]

How is burning your own money an attack on the economy?

Here in Italy, it is a crime to burn or otherwise destroy money, even your own money.
I never have known exactly why. I suppose this law has  never been applied...

[wumpus]

Here in Italy, it is a crime to burn or otherwise destroy money, even your own money.
I never have known exactly why. I suppose this law has  never been applied...

Same here in the Netherlands.

I know of no cases where someone was actually prosecuted for destroying money, but it's certainly not allowed, only the central bank is allowed to do that.