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Author Topic: Forever(?) lost coins  (Read 14639 times)
tsr (OP)
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July 08, 2010, 05:33:36 AM
 #1

Hi all,
i'm pretty new to bitcoin but already using it and also experimenting with new ideas/code. Great concept!

Anyway i wonder what happens with lost coins?
Like when some people with many coins lose their wallet file.
Are they lost forever, and worst for the whole system? Since the generation of the coins are limited as i have read, are those lost coins regenerated at some point too?

So when many people lose their files, maybe through a terrible bug.. well go figure.

Can somebody please explain what would happen and if there are already methods to prevent or something(except backing up, but it's not always possible, e.g. a bad government takes your computer..).
Ok, in RL life, when you lose money it's also forever lost(when noone finds it). But since in BC it's a limited generation of new coins it looks different i think, or am i missing something?
Maybe one solution would be that the network will also forget about those coins when the original node/node with that wallet/ID haven't connected for a very very long time(maybe ~40, ~100 years? on the other hand it might be bad for descent to your child who will knew about your "wallet file" very late etc.) and let's the network regenerate those coins.

Well, i'm not really sure how this is working yet, but just thought about this. Maybe someone can explain/think about this who has more knowledge of bitcoin/it's economics. Smiley

Thank you.
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SmokeTooMuch
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July 08, 2010, 11:28:47 AM
 #2

Once lost = forever lost.
we call it "natural deflation".

the lost coins wont be recovered or regeneratet at any time.

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July 08, 2010, 04:40:43 PM
 #3

It's really not so bad for the system--just unfortunate for the user who lost his bitcoins.
The value that those bitcoins held is never really lost.  Rather, it's essentially redistributed out to every other bitcoin still in use (deflation).
Even if we lost 90% of BC and only had 2.1 million, with the eight (i think) decimal places possible, it would still be perfectly practical to use.

tsr (OP)
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July 08, 2010, 05:37:41 PM
 #4

Thank you both.
Already thought so and sounds logical.

One thing i was afraid of, is especially because of this, it would be possible by a bad gov or other bad third parties to still influence the system.
Either by (bad) gov:
- seizing/sueing all IP's which are nodes(easily detectable because of TCP and default port right now)

or other bad guys when they might have a lot of BC so they have an advantage/higher value of their coins:
- writing a worm which infects and deletes wallet files (generally i see a new sort of phishing here, either stealing wallets or automated transfers by worms, but that's another thought/story to keep care of soon Smiley ).

or other similar ways.

So that was my only thought behind all this.
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July 13, 2010, 07:53:31 AM
 #5

Someone who had a lot of coins probably wouldn't want to do things that might make people flee the system. That doesn't rule out mindlessly malicious attacks though.

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July 13, 2010, 03:03:17 PM
 #6

Agreed, the danger isn't necessarily from those trying to exploit the system (though the coin phishing and such is a valid concern), but rather from those seeking simply to destroy it. What do you do when a powerful adversary puts a few supercomputers to block generation and they intend to screw around with the block chain? They might not care about stealing value; they'd rather just destroy it.

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July 13, 2010, 03:53:55 PM
 #7

... like how the RIAA screws around trying to disrupt BitTorrent swarms...

Umm, good luck with that.  I'm betting The Swarm will win most of the battles.

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July 13, 2010, 09:12:40 PM
 #8

... like how the RIAA screws around trying to disrupt BitTorrent swarms...

Umm, good luck with that.  I'm betting The Swarm will win most of the battles.


I don't think it's directly comparable. There's no such thing as a "Bittorrent proof of work" that serves as the base for all value in the system. The CIA, Botnet, whoever directly attacking the proof of work is a valid scenario.

Of course, they would need to have a pretty hefty supercomputer to keep up with 1 million + nodes, should Bitcoin get to that point.

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July 14, 2010, 02:38:04 AM
 #9

... like how the RIAA screws around trying to disrupt BitTorrent swarms...

Umm, good luck with that.  I'm betting The Swarm will win most of the battles.


I don't think it's directly comparable. There's no such thing as a "Bittorrent proof of work" that serves as the base for all value in the system. The CIA, Botnet, whoever directly attacking the proof of work is a valid scenario.

Of course, they would need to have a pretty hefty supercomputer to keep up with 1 million + nodes, should Bitcoin get to that point.

And if BC gets to that point, well, that's what you call a good problem to have.  Nothing like a large number of users testing the scalability of your architechture.
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July 14, 2010, 02:52:16 AM
 #10

Yeah, that would be a good problem to have.

Why would they mess around with the block chain, though?  Are you imagining the men in black double-spending enough Bitcoins to make merchants think it is untrustworthy? ("I shipped 100 computers to Langley, Virginia when the transaction had six confirmations, and now there's a new block chain that says those coins were paid to somebody else!!!")

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July 14, 2010, 09:30:23 AM
 #11

Yeah, that would be a good problem to have.

Why would they mess around with the block chain, though?  Are you imagining the men in black double-spending enough Bitcoins to make merchants think it is untrustworthy? ("I shipped 100 computers to Langley, Virginia when the transaction had six confirmations, and now there's a new block chain that says those coins were paid to somebody else!!!")


That could be one reason. There is a lot more at stake here (for the big players) than there was for BitTorrent. BitTorrent helps some users get around expensive CDs and DVDs; a costly problem for the industry to be sure, but one that still hits a fairly segmented part of the economy. Bitcoin, on the other hand, has the potential to undermine the entire taxation & fiat money system. You can bet your bottom dollar that a lot more resources will be thrown against it; I'm just waiting for the propaganda campaign to start Wink

I could be wrong, and they won't care or won't notice, or when they do it will be too expensive to mount an attack, even for them, but we need to at least acknowledge the possibility.

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Gavin Andresen
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July 14, 2010, 11:43:36 AM
 #12

My point was that if "they" mount an attack, I think they're unlikely to do something subtle like try to mess with the block chain.

If "they" want to mess with the network, it would be far easier to do something like what China's doing with its Great Wall-- forcing connections they don't like to be dropped.  Or what botnets do now:  mount a denial-of-service attack by flooding the network.

Much more likely:  "they" will catch you for tax evasion when you convert your bitcoins to your local fiat currency and buy that fancy sports car you've always wanted.

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July 14, 2010, 01:39:48 PM
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My point was that if "they" mount an attack, I think they're unlikely to do something subtle like try to mess with the block chain.

If "they" want to mess with the network, it would be far easier to do something like what China's doing with its Great Wall-- forcing connections they don't like to be dropped.  Or what botnets do now:  mount a denial-of-service attack by flooding the network.

Much more likely:  "they" will catch you for tax evasion when you convert your bitcoins to your local fiat currency and buy that fancy sports car you've always wanted.


Two words for you... Liberty Dollar.

If they want to take bitcoin down, they will go after people directly.  The beauty of the idea, of course, is that it's a system that is easily replicated if they are, in fact, successful in 'taking it down.'  Welcome Bitcoin 2.0.
ksd5
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July 14, 2010, 03:42:55 PM
 #14

Well, if somehow EVERY coin is lost, the network can just start block generation from the start all over again.
Some Mouse
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July 14, 2010, 03:52:07 PM
 #15

Well, if somehow EVERY coin is lost, the network can just start block generation from the start all over again.

That wouldn't exactly inspire confidence in a second go-around for the exact same idea.
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July 14, 2010, 04:25:12 PM
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My point was that if "they" mount an attack, I think they're unlikely to do something subtle like try to mess with the block chain.

If "they" want to mess with the network, it would be far easier to do something like what China's doing with its Great Wall-- forcing connections they don't like to be dropped.  Or what botnets do now:  mount a denial-of-service attack by flooding the network.

Much more likely:  "they" will catch you for tax evasion when you convert your bitcoins to your local fiat currency and buy that fancy sports car you've always wanted.


Yep, I don't doubt those tactics will be tried as well. The first two are temporary, but the last one is scarier to potential users. The devs might find black SUVs pulling up to their doorsteps one day, as well.

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tsr (OP)
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July 14, 2010, 07:18:55 PM
 #17

Someone who had a lot of coins probably wouldn't want to do things that might make people flee the system. That doesn't rule out mindlessly malicious attacks though.

Sure, of course it wouldn't make any sense for the attacker to delete almost all wallet files, but he could implement an algorithm in his worm, which deletes...well, maybe every 50th wallet file and also to prevent that it doesn't look like just attacking computers with installed bitcoin, he can just delete/kill the whole system. So in the end he was still able to influence the network/economy.

And at least to prevent stealing wallet files for now, the file should be password protected(decrypt at every bitcoin start and encrypt again when closing). Should be no real problem to implement. Still phishing on a running bitcoin would still be possible by hooking (or even easier just by mousmove/key-macro..) and also can't think of any real/good prevention of this for now(but probably affects mostly the windows version).  Undecided
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July 15, 2010, 10:40:31 AM
 #18

Hopefully bitcoin becomes its own supercomputer. Cheesy

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July 16, 2010, 06:05:26 PM
 #19

Hopefully bitcoin becomes its own supercomputer. Cheesy

As long as it doesn't become self aware (as computers often do) and then it will know what I've been spending my Bit Coins on.  Grin

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May 21, 2018, 12:13:56 PM
 #20

My point was that if "they" mount an attack, I think they're unlikely to do something subtle like try to mess with the block chain.

If "they" want to mess with the network, it would be far easier to do something like what China's doing with its Great Wall-- forcing connections they don't like to be dropped.  Or what botnets do now:  mount a denial-of-service attack by flooding the network.

Much more likely:  "they" will catch you for tax evasion when you convert your bitcoins to your local fiat currency and buy that fancy sports car you've always wanted.


To be fair, it really does depend on the company you are buying your 'fancy' car from. Lamborghini being one car dealership that accepts Bitcoin directly; we are all familiar with the phrase 'when Lambo'. Grin Also, if buying in fiat currency, the minute your transfer goes through the bank, "they" can directly trace the money afterward. So when converting to any fiat, you are beholden to the laws of the country whose currency you are converting to.
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