A proposed solution to adjust for lost Bitcoins: wallet 'heartbeats'

[ascent]

Oh, I see now! I'm not a mathematician, therefore, I can't grasp the concept fully. First of all, it does not need to become zero for the problem to exist. Secondly, the key point is "approach zero".

It might sound condescending. But it's not. It is really a concept that is hard for non-mathematicians to understand, because people rarely get to think about infinite things.

See, you still haven't understood it: The number of active bitcoins will NOT "approach zero". Not at all. It will approach some large positive number. Ofcourse, it is hard so estimate the exact number today, but I believe it will be more than half the number of total bitcoins, that is more than 10.5 million.

I suspect you're not a mathematician, otherwise you wouldn't make such a fallacious statement. It makes you sound doubly condescending. 10.5 million, eh? Funny!

Assuming 6.5 million Bitcoins (we could assume 21 million if you want, it makes no difference), and a rate of loss of one percent per year, which I will admit is probably high, we get the results listed below for one thousand years. I don't see it stopping at 3.25 million. It does not matter what we set the rate of loss to, it will not stop at half. So please, don't ever make assumptions about your understanding of math vs. mine, again, ever.

And yeah, you are condescending, and apparently, not even right, by a long shot.

year: 2020 5878483.487557
year: 2030 5316395.094382
year: 2040 4808052.427024
year: 2050 4348316.430703
year: 2060 3932539.436394
year: 2070 3556518.175540
year: 2080 3216451.287401
year: 2090 2908900.889465
year: 2100 2630757.822409
year: 2110 2379210.218276
year: 2120 2151715.074087
year: 2130 1945972.543530
year: 2140 1759902.686828
year: 2150 1591624.443727
year: 2160 1439436.617053
year: 2170 1301800.674574
year: 2180 1177325.195319
year: 2190 1064751.803103
year: 2200 962942.445059
year: 2210 870867.886577
year: 2220 787597.306321
year: 2230 712288.886162
year: 2240 644181.300873
year: 2250 582586.021565
year: 2260 526880.355054
year: 2270 476501.148785
year: 2280 430939.097683
year: 2290 389733.595365
year: 2300 352468.077676
year: 2310 318765.811463
year: 2320 288286.086013
year: 2330 260720.768665
year: 2340 235791.189763
year: 2350 213245.325467
year: 2360 192855.249931
year: 2370 174414.831109
year: 2380 157737.646871
year: 2390 142655.100384
year: 2400 129014.715696
year: 2410 116678.596288
year: 2420 105522.031020
year: 2430 95432.233373
year: 2440 86307.201241
year: 2450 78054.685746
year: 2460 70591.258659
year: 2470 63841.468984
year: 2480 57737.080191
year: 2490 52216.380388
year: 2500 47223.558445
year: 2510 42708.139776
year: 2520 38624.476070
year: 2530 34931.283814
year: 2540 31591.226939
year: 2550 28570.539371
year: 2560 25838.683680
year: 2570 23368.042362
year: 2580 21133.638641
year: 2590 19112.883966
year: 2600 17285.349661
year: 2610 15632.560394
year: 2620 14137.807406
year: 2630 12785.979598
year: 2640 11563.410760
year: 2650 10457.741417
year: 2660 9457.793883
year: 2670 8553.459257
year: 2680 7735.595231
year: 2690 6995.933667
year: 2700 6326.997006
year: 2710 5722.022681
year: 2720 5174.894745
year: 2730 4680.082048
year: 2740 4232.582314
year: 2750 3827.871575
year: 2760 3461.858438
year: 2770 3130.842718
year: 2780 2831.478034
year: 2790 2560.737979
year: 2800 2315.885527
year: 2810 2094.445359
year: 2820 1894.178840
year: 2830 1713.061389
year: 2840 1549.262014
year: 2850 1401.124795
year: 2860 1267.152149
year: 2870 1145.989690
year: 2880 1036.412534
year: 2890 937.312918
year: 2900 847.689002
year: 2910 766.634738
year: 2920 693.330715
year: 2930 627.035871
year: 2940 567.080002
year: 2950 512.856989
year: 2960 463.818668
year: 2970 419.469289
year: 2980 379.360506
year: 2990 343.086842
year: 3000 310.281590
year: 3010 280.613108

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[tubro]

Please, try not to get bitter. Yes, you are right: If 1% of bitcoins were lost every year, their number would (slowly) approach zero. But that is not a realistic assumption, as pointed out above.

You have, however, repeatedly asserted that from the pure fact that the number of bitcoins will not increase over time it follows that this number approaches zero. That is not the case. That is all I tried to point out. If you are of the opinion that this number will approach zero, you should argue why that might be the case. A constant ratio of loss would be such a reason. But you have not argued anywhere why such a constant ratio is a realistic assumption.

Now, even if what you call "uncertainty" were to increase, consider the interesting case of gold: We have no idea how much gold there will be available in a few years. That is because huge amounts of it lie around in space waiting to be mined. Still, I have not noticed any uncertainty in gold prices. Actually, there are people going around claiming gold to be the most secure monetary standard there is.

[bji]

Now, even if what you call "uncertainty" were to increase, consider the interesting case of gold: We have no idea how much gold there will be available in a few years. That is because huge amounts of it lie around in space waiting to be mined. Still, I have not noticed any uncertainty in gold prices. Actually, there are people going around claiming gold to be the most secure monetary standard there is.

That is true, but don't you think it would just be cool to have the only currency in existence that simply could not be destroyed (on anything other than catostrophic scales of course; if the earth were blown up by Vogons then obviously bitcoin would be just as gone as dollars at that point)?  I think it would be just another really cool aspect to bitcoins that make them that much more interesting and appealing as a form of currency --  100% guaranteed 0% inflation/deflation of the monetary supply.  That's just so cool and bitcoin has a chance to achieve that; obviously there isn't the mindshare for this now due to all of the naysayers but maybe someday in the distant future the bitcoin user population as a whole will move to new rules that make bitcoin truly non-inflationary/non-deflationary ...

[ascent]

Besides, gold is a ridiculous analogy. When gold is submersed in water, it is not destroyed. It's not destroyed by fire, either. Nor by hitting it with a hammer. When it is buried, upon rediscovery, it is obvious what it is. Not so with Bitcoins. When Bitcoins are lost amongst rubble, they just look like mangled computer hardware, kind of like that scuffed flash drive I saw in the parking lot the other day. Who's going to bother resurrecting such a thing, not even knowing if it's worth it to do so? A gold coin in the parking lot is obviously recognizable, though.

Also, gold is also not accidentally deletable, so to speak. It's not subject to computer viruses, either.

I think the burden lies upon the defenders of Bitcoins to bring forth some better arguments. And leave the sniping one liners behind.

[ascent]

Please, try not to get bitter. Yes, you are right: If 1% of bitcoins were lost every year, their number would (slowly) approach zero. But that is not a realistic assumption, as pointed out above.

Yes, it is a realistic assumption, as pointed out above by both bji and myself.

[cschmitz]

It's amazing how many people insist I think divisibility is an issue.

Since you dont understand the system, let me repeat slowly:

a) zero can only be reached if there is no longer sufficient divisibility to allow supply and demand simply take care of that by in a sense DEFLATION. as long as divisibility is assured the practical use of bitcoin will not be affected at all
b) if a trend can, in the far future, be anticipated that there might be a looming issue on the horizon, a fix to that issue, however that fix may be, can be introduced to the mainline client. if that is a "vote on branching" or something different does not matter, the tools to fix it are already there
c) why does every random person who seems to be in the "explore bitcoin phase" set his first and foremost task at solving longterm issues for bitcoin before even grasping basic concepts or the currency

[ascent]

a) zero can only be reached if there is no longer sufficient divisibility to allow supply and demand simply take care of that by in a sense DEFLATION. as long as divisibility is assured the practical use of bitcoin will not be affected at all

You apparently have absolutely no idea what is being discussed here in this thread when the term zero is used. Zero is referring to the fact that the ratio C:M can in theory approach the value of zero, where C is equal to the number of coins known to be in circulation recently, and M is the total number of coins minted. From this, it follows that L + S = M - C, where L is equal to the number of coins lost and S is equal to the number of coins saved in the long term. While the sum of L + S can be determined, the ratio of L to S cannot, thus creating a situation over time in which as the ratio C:M approaches zero, the uncertainty increases as to the actual valuation of Bitcoins, due to the fact that the possibility of a quantity of Bitcoins many multiples of C could be introduced into the market, a situation that is not really possible in the early stages of Bitcoins, thus introducing by design a monetary currency which changes its dynamics over time independent of external economic forces.

Divisibility is not the issue, and it's annoying when people bring it up.

If anything, the question is the rate of loss, and whether it is constant over time, or decreasing, or even increasing. Some individuals here contend that as Bitcoins increase in value, greater effort will be made to prevent their loss. However, I contend that in order for Bitcoins to increase in value, they will have to gain widespread use, thus their increase in value actually results in a diffusion where the average wallet size is no greater than any average wallet or bank account today, which means that there is no reason to assume a decreased rate of loss over time.

[ascent]

c) why does every random person who seems to be in the "explore bitcoin phase" set his first and foremost task at solving longterm issues for bitcoin before even grasping basic concepts or the currency

This is an insulting and unnecessary remark, but unfortunately I have discovered it is typical of the community here. Sad, really. What basic concepts have I not grasped?

[bji]

c) why does every random person who seems to be in the "explore bitcoin phase" set his first and foremost task at solving longterm issues for bitcoin before even grasping basic concepts or the currency

This is an insulting and unnecessary remark, but unfortunately I have discovered it is typical of the community here. Sad, really. What basic concepts have I not grasped?

I have to say that I agree.  I have also come to these forums with ideas and found that there is no shortage of people who just want to shit on any idea that they didn't come up with themselves.  I think that there are some people who don't really want to think any further than whatever Satoshi wrote in the white paper.  That dude was so smart that he must have thought of everything, right?

For what it's worth, I do think that Satoshi's ideas were pure genius; but I also don't think that there aren't any more good ideas to be had.

[BitterTea]

I also don't think that there aren't any more good ideas to be had.

Who's saying there are no more good ideas to be had?

All we're saying is that this isn't one of them.

If you really think it is, create a fork of the client and/or blockchain and see if people use it. You're not going to shoehorn this fix for a non existent problem into Bitcoin.

[bji]

Who's saying there are no more good ideas to be had?

All we're saying is that this isn't one of them.

If you really think it is, create a fork of the client and/or blockchain and see if people use it. You're not going to shoehorn this fix for a non existent problem into Bitcoin.

Actually most people are doing more than saying that this is not a good idea.  They're also needlessly insulting, demeaning, and trivializing the concept and its main proponent.  I'm just calling it like I see it.

Um, wouldn't creating a fork of the client and/or blockchain and see if the people use it exactly BE shoehorning this fix into Bitcoin?

Or do you think that Bitcoin is just the prototype client that everyone has been using?

[BitterTea]

Um, wouldn't creating a fork of the client and/or blockchain and see if the people use it exactly BE shoehorning this fix into Bitcoin?

Or do you think that Bitcoin is just the prototype client that everyone has been using?

No, it wouldn't. Shoehorning the "fix" into Bitcoin would be lobbying for it's inclusion into Bitcoin. If you really think it's such a good idea, then create an alternate version of the client with the change. If people think it's a good idea, they will use that instead. That might not be such a great idea due to the possibility of forking the block chain, so maybe you want to create an alternate block chain instead with this and possibly other rule changes, and see how it fares in competition with Bitcoin. The code is open source, quit complaining and start coding.

[ascent]

Here's some math for you:

wallet 'heartbeats' = demurrage

That is a non-starter.

Demurrage is a cost associated with owning or holding currency over a given period of time. Bitcoins already have demurrage.

Please, everyone, you are invited to propose sound arguments against this idea sans the excessive fanboy attitude.

[ascent]

If you loose your coins, it is a cost. If that cost is 'charged' to you by the network it is... Demurrage.

Ummm, if you lost your coins, you already paid the cost. However, if you didn't lose the coins, then lift your finger every seven years. True, you can argue that there is a cost to lifting your finger, but you'll gain it back in spades by using a currency that people can continue to have confidence in for all time.

[ascent]

There are security issues involved with 'lifting your finger'... Even on time-horizons of seven years or more.

Are you saying it is a security issue because you run the risk of losing your coins by connecting to the network?

[BitterTea]

Why are you so adamant that this be incorporated into Bitcoin, rather than a block chain of your own design?

It's pretty obvious that few people (if any) other than you and bji want this "feature".

[ascent]

It is a security issue because it creates a traceable event. That should remain within the bearer's control.

This is already implicit within Bitcoins. Bitcoins are essentially worthless unless spent, and yet we have those who argue against the very function necessary to derive any value from them anyway. All this talk about their anonymity, and yet everyone lives in fear of connecting their nearly anonymous hoard to the network.

Furthermore, if you're so paranoid about connecting to the network, then divide your hoard into multiple wallets where each one is of little interest to those nefarious organizations you fear are watching you, and stagger their connections over time. And automate this division if you wish - I'm sure software would be developed to assist you in this process such that the burden placed upon you would be minimal.

[ascent]

Why are you so adamant that this be incorporated into Bitcoin, rather than a block chain of your own design?

It's pretty obvious that few people (if any) other than you and bji want this "feature".

I think a better dialog would ensue if you would describe what you think is the most likely scenario for Bitcoins in the future. This would include your best guess of their future valuation, and the reasons for your estimated future valuation. As a defender of Bitcoins, you can then justify its current design as much as you want.

[BitterTea]

Why are you so adamant that this be incorporated into Bitcoin, rather than a block chain of your own design?

It's pretty obvious that few people (if any) other than you and bji want this "feature".

I think a better dialog would ensue if you would describe what you think is the most likely scenario for Bitcoins in the future. This would include your best guess of their future valuation, and the reasons for your estimated future valuation. As a defender of Bitcoins, you can then justify its current design as much as you want.

What? No. Everybody who bought, mined, or sold for Bitcoins did so because they liked the way it works. You want to change the way it works. If you're so sure that your guess (and that's all it is) is correct, then why not start a competing block chain with the rules you describe? Actions speak louder than words.

I'm not going to play guessing games regarding the future of Bitcoin. It is however a fact that as the value of something increases, the effort that goes into protecting that thing increases.

[ascent]

I'm not going to play guessing games regarding the future of Bitcoin. It is however a fact that as the value of something increases, the effort that goes into protecting that thing increases.

Actually, as has been stated, for the value to increase, it will require wider adoption. Wider adoption means the value is spread among more users. And the key point here is: when you have 1 million users who possess a digital file that contains 100x where x is valued at y, or 100 million users who possess a digital file that contains 1x where x is valued at 100y, you still have the same total value per user, and thus, rationally, each user applies the same measures to safeguard it, regardless of the value of a single unit.

Honestly, is that your argument? That the increased value of Bitcoins will result in an overall increased effort to safeguard it?