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Author Topic: What happens when bitcoins are lost  (Read 799 times)
shahinoor.bd
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October 23, 2017, 06:23:47 PM
 #1

When you loses wallet, it has the effect of removing money out of circulation. Lost bitcoins still remain in the block chain just like any other bitcoins. However, lost bitcoins remain dormant forever because there is no way for anybody to find the private key(s) that would allow them to be spent again. Because of the law of supply and demand, when fewer bitcoins are available, the ones that are left will be in higher demand and increase in value to compensate.
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October 23, 2017, 07:05:15 PM
 #2

You are correct - that is exactly what happens.
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October 23, 2017, 07:07:10 PM
 #3

When you loses wallet, it has the effect of removing money out of circulation. Lost bitcoins still remain in the block chain just like any other bitcoins. However, lost bitcoins remain dormant forever because there is no way for anybody to find the private key(s) that would allow them to be spent again. Because of the law of supply and demand, when fewer bitcoins are available, the ones that are left will be in higher demand and increase in value to compensate.

It's lost forever. The more people who lose Bitcoin are effectively giving it more value.
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October 23, 2017, 07:07:41 PM
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Yes, but it's not forever... In dozens of years big computers will be able to break the encryption and find the private keys of these accounts. Maybe before 2047....

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October 23, 2017, 07:13:28 PM
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One possibility is that advances in cryptanalysis or quantum computing eventually break SHA256 or ECDSA secp256k1.  With any luck, this would be gradual process (as with MD5 and SHA1), so that there is time for an orderly hard fork to a different digital signature algorithm or cryptographic hash algorithm.  Then the UTXOs with lost private keys can either be formally destroyed as part of the hard fork or claimed by whoever first cracks them.

And as Saint-loup notes, if Moore's Law continues long enough, even brute force attacks might eventually compromise the cryptographic primitives currently used by Bitcoin.
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October 23, 2017, 07:28:42 PM
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When you loses wallet, it has the effect of removing money out of circulation. Lost bitcoins still remain in the block chain just like any other bitcoins. However, lost bitcoins remain dormant forever because there is no way for anybody to find the private key(s) that would allow them to be spent again. Because of the law of supply and demand, when fewer bitcoins are available, the ones that are left will be in higher demand and increase in value to compensate.

I want to specifically talk about the part where you say, "lost bitcoins remain dormant forever".  Today I understand that you cannot recover private keys.  In the future maybe?  I have heard many things were impossible but today are possible.  Computer forensics is an evolving field.  So If you have lost Bitcoin on a hardrive or flash drive I would suggest you keep them in storage for a few decades because you never know.

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October 23, 2017, 07:32:26 PM
 #7

One possibility is that advances in cryptanalysis or quantum computing eventually break SHA256 or ECDSA secp256k1.  With any luck, this would be gradual process (as with MD5 and SHA1), so that there is time for an orderly hard fork to a different digital signature algorithm or cryptographic hash algorithm.  Then the UTXOs with lost private keys can either be formally destroyed as part of the hard fork or claimed by whoever first cracks them.

And as Saint-loup notes, if Moore's Law continues long enough, even brute force attacks might eventually compromise the cryptographic primitives currently used by Bitcoin.
you seem to be very educated.

Do you know what is the probability to import an account with some money in it when a user enter a random private key?

AFAIK, there are "only" 52^62 potential private keys. ie 52 characters in lowercase, uppercase or digit.

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October 23, 2017, 08:07:20 PM
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One possibility is that advances in cryptanalysis or quantum computing eventually break SHA256 or ECDSA secp256k1.  With any luck, this would be gradual process (as with MD5 and SHA1), so that there is time for an orderly hard fork to a different digital signature algorithm or cryptographic hash algorithm.  Then the UTXOs with lost private keys can either be formally destroyed as part of the hard fork or claimed by whoever first cracks them.

And as Saint-loup notes, if Moore's Law continues long enough, even brute force attacks might eventually compromise the cryptographic primitives currently used by Bitcoin.
you seem to be very educated.

Do you know what is the probability to import an account with some money in it when a user enter a random private key?

AFAIK, there are "only" 52^62 potential private keys. ie 52 characters in lowercase, uppercase or digit.

Your numbers are off. A bitcoin address is an encoding using base-58. The actual number of possible addresses is 2160.

Assuming there are 10 million addresses holding bitcoins (there aren't nearly that many), the probability of a new address duplicating one in use (a "collision") is approximately 1 in 2160 / 223, or 1 in 2137, or 1 in 174,000,000,000,000,000,000,000,000,000,000,000,000,000.

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October 23, 2017, 08:13:30 PM
 #9

One possibility is that advances in cryptanalysis or quantum computing eventually break SHA256 or ECDSA secp256k1.  With any luck, this would be gradual process (as with MD5 and SHA1), so that there is time for an orderly hard fork to a different digital signature algorithm or cryptographic hash algorithm.  Then the UTXOs with lost private keys can either be formally destroyed as part of the hard fork or claimed by whoever first cracks them.

And as Saint-loup notes, if Moore's Law continues long enough, even brute force attacks might eventually compromise the cryptographic primitives currently used by Bitcoin.
you seem to be very educated.

Do you know what is the probability to import an account with some money in it when a user enter a random private key?

AFAIK, there are "only" 52^62 potential private keys. ie 52 characters in lowercase, uppercase or digit.

Your numbers are off. A bitcoin address is an encoding using base-58. The actual number of possible addresses is 2160, and each address is shared by nearly 294 private keys.
thank you but I don't understand what "each address is shared by nearly 294 private keys." means...
Each address is accessible by 294 private keys? When I export a private key from an address it only gives one private key to me....  Undecided

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October 23, 2017, 08:15:12 PM
 #10

One possibility is that advances in cryptanalysis or quantum computing eventually break SHA256 or ECDSA secp256k1.  With any luck, this would be gradual process (as with MD5 and SHA1), so that there is time for an orderly hard fork to a different digital signature algorithm or cryptographic hash algorithm.  Then the UTXOs with lost private keys can either be formally destroyed as part of the hard fork or claimed by whoever first cracks them.

And as Saint-loup notes, if Moore's Law continues long enough, even brute force attacks might eventually compromise the cryptographic primitives currently used by Bitcoin.
you seem to be very educated.

Do you know what is the probability to import an account with some money in it when a user enter a random private key?

AFAIK, there are "only" 52^62 potential private keys. ie 52 characters in lowercase, uppercase or digit.

Your numbers are off. A bitcoin address is an encoding using base-58. The actual number of possible addresses is 2160, and each address is shared by nearly 294 private keys.
thank you but I don't understand what "each address is shared by nearly 294 private keys." means...
Each address is accessible by 294? When I export a private key from an address it only gives one private key to me....  Undecided

Sorry, typo. Should be 296
For every bitcoin address, there are nearly 296 private keys that are associated with it. That is because there are 2160 addresses, but nearly 2256 private keys.

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blockman
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October 23, 2017, 08:17:18 PM
 #11

When you loses wallet, it has the effect of removing money out of circulation. Lost bitcoins still remain in the block chain just like any other bitcoins. However, lost bitcoins remain dormant forever because there is no way for anybody to find the private key(s) that would allow them to be spent again. Because of the law of supply and demand, when fewer bitcoins are available, the ones that are left will be in higher demand and increase in value to compensate.
It's true, I think your title is quite tricky it seemed to be asking but you have the right information on what really is happening to those lost bitcoins. And don't forget about those people that are intently sending bitcoins to those wallets that aren't inactive and that's what we call burning of bitcoins (Correct me if I'm wrong). This is also happening to make the supply lesser that will make the demand higher that which is likely to lead the price of bitcoin to become higher too.


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DannyHamilton
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October 23, 2017, 08:19:14 PM
 #12

I don't understand what "each address is shared by nearly 294 private keys." means...

It means that there are mathematically an average of 294 different private keys that will all work with the same address.

Nobody will ever know more than 1 of those private keys, but logic dictates that on average there are that many other private keys that would work with the same address.

Each address is accessible by 294?

296, but yes they would be if you were able to calculate what any of those other private keys are.  Realisitcally that will never happen, but if you are calculating the odds of a collision you need to include the possibility of colliding with ANY of those keys and not just the 1 key that you know.

When I export a private key from an address it only gives one private key to me....  Undecided

Correct.  Only one key will ever be known.

probitcrypto
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October 23, 2017, 08:25:35 PM
 #13

Yes, but it's not forever... In dozens of years big computers will be able to break the encryption and find the private keys of these accounts. Maybe before 2047....
But the big question is how do you find out in this millions of bitcoin adress in which address it is locked and in which address there are lots of bitcoin.
Is there anyway?i mean say someone dies with is private key in saved in his mind without saying it to anyone.
What now?
also finding such address is tens to impossiblem
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October 23, 2017, 08:31:42 PM
 #14

When you loses wallet, it has the effect of removing money out of circulation. Lost bitcoins still remain in the block chain just like any other bitcoins. However, lost bitcoins remain dormant forever because there is no way for anybody to find the private key(s) that would allow them to be spent again. Because of the law of supply and demand, when fewer bitcoins are available, the ones that are left will be in higher demand and increase in value to compensate.

Losing your private keys = losing your bitcoins

This is where Token Security Scheme has the solution to the potential problem. Never lose your wallet/private keys again.

Check out the TSS project here:
https://www.tsstoken.com/
https://bitcointalk.org/index.php?topic=2177307
https://bitcointalk.org/index.php?topic=2243112

Cheers!

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October 23, 2017, 08:35:40 PM
 #15

Absolutely correct , and this is what happening now ( before the hard fork which will release BTG) when people hold their bitcoins in order to get free BTGs , as a result bitcoins​ in circulation decrease " in number term" which contributes to put bitcoin price higher .

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October 23, 2017, 08:39:23 PM
 #16

When you loses wallet, it has the effect of removing money out of circulation. Lost bitcoins still remain in the block chain just like any other bitcoins. However, lost bitcoins remain dormant forever because there is no way for anybody to find the private key(s) that would allow them to be spent again. Because of the law of supply and demand, when fewer bitcoins are available, the ones that are left will be in higher demand and increase in value to compensate.

Lost Bitcoins are lost forever and can’t be recovered. There are many situations where Bitcoins can get lost such as sending them to the wrong address that no one owns, forgetting the private keys, forgetting you have a Bitcoin wallet, owner dying and no one know about the Bitcoins or how to recover them, leaving dust in address, etc.

I’m sure all of these scenarios happen every year and sometimes no one even knows they are lost. Since there is a limited number of Bitcoins and some are always being lost, at some point, more will be lost than in circulation.

groko271
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October 23, 2017, 09:33:52 PM
 #17

When you loses wallet, it has the effect of removing money out of circulation. Lost bitcoins still remain in the block chain just like any other bitcoins. However, lost bitcoins remain dormant forever because there is no way for anybody to find the private key(s) that would allow them to be spent again. Because of the law of supply and demand, when fewer bitcoins are available, the ones that are left will be in higher demand and increase in value to compensate.

yes true.

Go and get a $20 serialised note and bury it in the ground. This is the same as losing your bitcoin wallet, like the $20 it is out of circulation for ever.

I once saw a link where it showed the unused wallets and the amount of btc out of circulation, cant find it now. However here is one similar. https://www.reddit.com/r/Bitcoin/comments/2twrs7/all_42400_dormant_bitcoin_addresses_with_a/

some other related links.

https://www.coindesk.com/meet-man-will-hack-long-lost-bitcoin-wallet-money/
https://news.bitcoin.com/guy-lost-bitcoin-computer-upgrade/

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Chris314
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October 23, 2017, 09:42:09 PM
 #18

When you loses wallet, it has the effect of removing money out of circulation. Lost bitcoins still remain in the block chain just like any other bitcoins. However, lost bitcoins remain dormant forever because there is no way for anybody to find the private key(s) that would allow them to be spent again. Because of the law of supply and demand, when fewer bitcoins are available, the ones that are left will be in higher demand and increase in value to compensate.

yes true.

Go and get a $20 serialised note and bury it in the ground. This is the same as losing your bitcoin wallet, like the $20 it is out of circulation for ever.

I once saw a link where it showed the unused wallets and the amount of btc out of circulation, cant find it now. However here is one similar. https://www.reddit.com/r/Bitcoin/comments/2twrs7/all_42400_dormant_bitcoin_addresses_with_a/

some other related links.

https://www.coindesk.com/meet-man-will-hack-long-lost-bitcoin-wallet-money/
https://news.bitcoin.com/guy-lost-bitcoin-computer-upgrade/
But the Bank of America can create as many $20 notes as they want, as any government bank with its money.
Bitcoin, however, can't be created indefinitely. Once every coin will be mined, there won't be any more creation, and lost bitcoin will remain lost, thus decreasing the whole amount of Bitcoins on circulation.

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October 23, 2017, 09:49:48 PM
 #19

yeah if it lost , it lost foreever , i think there is no get it back and spent it again.
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October 23, 2017, 09:53:56 PM
 #20

Yes, but it's not forever... In dozens of years big computers will be able to break the encryption and find the private keys of these accounts. Maybe before 2047....
After, all 21 million bitcoins have been extracted and the bitcoin rate will rise to incredible heights, it can be extracted from the block chains by selecting the cipher to the closed keys and the previously lost bitcoins? It will be something like a new kind of mining. However, apparently, this occupation will be worth it, given the course of bitcoin at that time.

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