Bitcoin capitalization eventually hit 0?

[gnaget]

With the decreasing curve of new bitcoins being introduced over time, what happens around 2030 when new bitcoins are no longer being generated?  There will always be bitcoins lost forever: people who don't backup their wallet, people who simply delete the small amounts left in their wallets, people who die without giving instructions about their bitcoin assets, etc.  Is bitcoin destined to be a short term currency that simply will not be able to withstand the test of time?

[TiagoTiago]

It is infinitly divisible (up to 8 decimal places right now, easily expandable with a modification of the client); so even if at one point there is only a total of 1BTC circulating in the whole world that will still  be more than enough

[gnaget]

In that case, I need to make sure I horde at least 1 BTC, it could be quite the retirement plan.  I guess I don't see the reason for completely stopping the new coins from being generated given the guaranteed evaporation of some coins. 

[ascent]

It is infinitly divisible (up to 8 decimal places right now, easily expandable with a modification of the client); so even if at one point there is only a total of 1BTC circulating in the whole world that will still  be more than enough

There are issues with that scenario that I have pointed out in other threads, but others don't seem to agree with me. Assuming the scenario you have illustrated, you must agree that it is possible that 100, or even 1,000 Bitcoins could be rediscovered, thus the World's economy, which was thriving on 1 Bitcoin, has now undergone 100 or even 1,000 fold inflation overnight if the Bitcoins are dumped on the market.

However, that isn't so bad, since everything is relative. But assume there are a few other currencies as well, and real wealth, which many don't have. Then those who did have most of their wealth tied up into Bitcoins would be wiped out.

Such a situation cannot arise right now, because it is impossible for 100, or 1,000 times the number of Bitcoins currently in circulation to enter the market.

[psyborgue]

It is infinitly divisible (up to 8 decimal places right now, easily expandable with a modification of the client); so even if at one point there is only a total of 1BTC circulating in the whole world that will still  be more than enough

There are issues with that scenario that I have pointed out in other threads, but others don't seem to agree with me. Assuming the scenario you have illustrated, you must agree that it is possible that 100, or even 1,000 Bitcoins could be rediscovered, thus the World's economy, which was thriving on 1 Bitcoin, has now undergone 100 or even 1,000 fold inflation overnight if the Bitcoins are dumped on the market.

As people find deposits of precious metals and minerals today?  The world doesn't end.  Some people just get rich.

[ascent]

As people find deposits of precious metals and minerals today?  The world doesn't end.  Some people just get rich.

Most people don't use metals as currency, nor do any significant number tie up all their wealth in metals, nor can metals be deleted by keystrokes, viruses, nor do metals upon discovery, appear as anything but metals, unlike, say squashed and scuffed flash drives amongst rubble, etc.

Metals are a very poor analogy. A better attempt might be to try and analogize it to a currency that plays a significant role in the world's commerce, and has a fixed total quantity, can be deleted, is often unidentifiable as currency if lost, etc.

[ascent]

As people find deposits of precious metals and minerals today?  The world doesn't end.  Some people just get rich.

Furthermore, metals take up physical space. Please tell me where 100 times the current quantity of gold might suddenly appear, assuming, of course, that the world is running on gold as its currency.

[ascent]

Yes. Just because five people clinging to their desperate desire for super secret wallets that exist in la la land for the rest of time doesn't mean the concept isn't worth addressing to the rest of the world.

[psyborgue]

As people find deposits of precious metals and minerals today?  The world doesn't end.  Some people just get rich.

Furthermore, metals take up physical space. Please tell me where 100 times the current quantity of gold might suddenly appear, assuming, of course, that the world is running on gold as its currency.

Yeah gold is a poor analogy.  Diamonds are better.  So say one day I'm digging in my backyard one day and I find a watermelon sized perfect diamond worth fifty quadrillion dollars.  What you're proposing is about as likely.

By the time bitcoins would appreciate in value to the point a flash drive could cause serious damage, such media would be well past it's expiration date.  The data would be unrecoverable.  Plus.  I'm guessing whoever has a large amount of bitcoins today will probably spread them around a bit (if they don't, bitcoins won't be used and won't be worth much anyway).

[TiagoTiago]

On a show, i think it was on the Discovery Channel, they said that nowadays big diamonds are almost never found anymore 'cause the machines they use to break down the dirt to get to diamonds also breaks the bigger diamonds before any human has the chance to see them.

[cbeast]

As BTC approaches zero, the hoarders will realize they are sitting on a pile of nothing. The 6.8 million bitcoins really need to be spread out and sold. I expect bitcoin will fail if they are not spent soon. Without a marketing plan for the current bitcoin, it would be no big thing for Foogle to market and seed a new block and ensure their own dominance long enough to amass a lot of foocoins.

[psyborgue]

But here's something to think about.  If I found this diamond so big that it could make all diamonds worthless...  What exactly could I do with it?  The only thing I could do is break it down into smaller diamonds and sell those.  I'd hold onto my big diamond and only buy stuff as I needed to.  It would make sense for me to keep my wealth hidden and secret, rather than destroying the world's economy.

[psyborgue]

As BTC approaches zero, the hoarders will realize they are sitting on a pile of nothing. The 6.8 million bitcoins really need to be spread out and sold.

^this.  Those with lots of bitcoins need to start investing in and building the bitcoin economy, or they'll be left with nothing but a lot of play money.  As somebody else said here, better to have 50% of a lot than 100% of nothing.

[IlbiStarz]

Transaction fees.

[billyjoeallen]

The last remaining bitcoin will be incredibly valuable as a historical artifact.

[JoelKatz]

However, that isn't so bad, since everything is relative. But assume there are a few other currencies as well, and real wealth, which many don't have. Then those who did have most of their wealth tied up into Bitcoins would be wiped out.

This is not hard to fix, just don't tie your wealth into a fixed number of Bitcoins. For example, if you put 5,000 bitcoins in a bank, make sure the bank agrees to provide your wealth in an alternate form should the Bitcoin market crash.

We have the same fear with fiat currencies. A troubled government might print a large amount of currency, thus causing that currency to crash. As an example of one form of protection, look at this:
http://www.treasurydirect.gov/indiv/products/prod_tips_glance.htm

Then if someone discovers 10,000 bitcoins, bitcoins become worthless, they dump the 10,000, and then the market recovers at new higher rate. Everyone who held wealth in the form of bitcoins still has that wealth, they just enforce the 'market crash' provisions of their agreements with whoever is holding their bitcoins.

Some wealth would be lost to the lucky discovered before the market can react. But if you believe currency shortage is a problem, then that's fair. They've helped alleviate a problem and so are entitled to profit from that. (As happened when it was discovered that aluminum, believed to be rarer than gold, was actually almost literally everywhere.)