New member here. Sorry if this has been covered elsewhere, but I'm curious about one aspect of BitCoins.
good you are curious, always a good starting point
OK, I understand that the BC algorythm means no more than 21 Million BC can ever be produced. Once that number is reached, that's it.
true! there is also an finite supply of gold. is far more easy to compare btc and gold, then compare btc and usd/fiat
So if a PC's HDD goes down, and a wallet is lost, all those BC are gone, right? However the BC network doesn't know they're gone, because all the transactions that created them still exist. Is that correct?
yes. make backups, or don't crash your HD.
From that point onwards, there will always be 21 Million minus the amount that were lost, never more. Is this also correct?
Now the real-world equivalent of this would be a fire in a bank in which loads of physical banknotes were destroyed (or a Central Bank deliberately destroying old bank notes that have been taken out of circulation). In both these cases, the same amount of physical notes would be printed to replace those that had been destroyed.
and more gets printed. you can't compare btc to fiat. banks can print as much as they want and cause infaltion.
My main question is this: If BitCoins can no longer be created once the 21 Million limit has been reached, and "lost" coins can not be replaced, what happens to the currency when a significant number of coins have been lost? The transaction history will still show that there is 21 Million in existance, but nobody will have all of them.
all the other coins gain value, bit coin are divisible to 0.00000001 btc. this means even if there was only 10 mio. btc back, we would still have enough.
Since all data is lost eventually, isn't there a possible scenario (many years in the future) when all those 21 Million BitCoins have been lost? How would the currency function after that?
they will not be lost, it would require a collective agreement of all
bitcoin holders to securely erase their harddrives.
you can compare it to if al gold in the world was tossed in to the ocean. it just not gonna happen.
and even if 50% of the coins are gone, the currency will still be able to function.