Non-replacement of BitCoins

[lorisarvendu]

Hi

New member here.  Sorry if this has been covered elsewhere, but I'm curious about one aspect of BitCoins.

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.

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? 

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.

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.

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?

-Curious Dave

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[Opsamk]

Bitcoins are the same as gold. We may lose some of it(or hoard it) and that drives prices up as the supply in the market drops.

[kokjo]

Hi

Hi!

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?

yes.

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.

[Shattienator]

Hi

New member here.  Sorry if this has been covered elsewhere, but I'm curious about one aspect of BitCoins.

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.

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? 

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.

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.

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?

-Curious Dave

So you can say about dollars, for example: there are only few trillions how can we use them at all?

This problem comes from opinion that bitcoin is the only possible unit. This is not true - we can use much smaller units. Take a look here http://forum.bitcoin.org/index.php?topic=27663.0

[bitfreak!]

I think the simplest answer to this question is the following:

Yes, there probably will one day come a time when enough Bitcoins are lost/destroyed that the currency starts to have problems. However, the length of time required for that to happen is probably hundreds of thousands, possibly millions of years. By that time many things could have happened; some one might invent a better currency, humans might go extinct, etc.

[lorisarvendu]

So you can say about dollars, for example: there are only few trillions how can we use them at all?

This problem comes from opinion that bitcoin is the only possible unit. This is not true - we can use much smaller units. Take a look here http://forum.bitcoin.org/index.php?topic=27663.0

Ah, so even if we lose a lot of BitCoins, because of their divisibility we could still have the same functioning number of currency units.  I see.  I'd still maintain that since "lost" coins can never be replaced, there will eventually come a time when there's only one coin left in (digital) existance, divided up into a billion nanocoins so that the currency still works.  However so long as those nanocoins never reside in the same volatile digital space, there's no chance they will ever be lost.   It's kind of like a currency "Omega Point"!

Thanks for all the replies.

[Fear]

I hope bitcoin will last on the market for more than 50 years by now. To panic at the moment is more than stupid.