The great "Lost btc problem"

[Nancarrow]

Yeah, just don't consider it a problem. It is not your money, so it is not your problem.

This doesn't really hold water. By the same logic, none of us should give a fuck about bitcoin, we should all happily accept government backed money, because after all whenever the central bank prints a few more kajillion USD or EUR or GBP, it's 'not our money'. The truth is of course that other people's money affects your money, as we bitcoiners keep trying to explain to everyone who prefers their state's toilet-paper version of money.

mgio hit the nail on the head here:

There is a problem here, but not what the OP was saying.
As more coins stop being used we become more unsure of the total market cap of bitcoin because we don't know if those coins are actually lost or simply not being spent.
What if there is a 1 trillion dollar bitcoin economy but 20 of the 21 million coins are considered "lost" because they haven't participated in a transaction in hundreds of years.
But actually 4 million of those coins are simply sitting in a misers wallet.
One day he decides to spend them.
Now suddenly the number of bitcions increases by 5, causing everyones bitcoins value to plummet by 80%. This would be a huge disaster.
So as you see, as more bitcoins become "lost" the value of a bitcoin becomes more uncertain.

This is the real problem. As time goes on we simply become less certain how much money actually exists. This runs counter to the whole purpose of the btc allocation mechanism, which was to make everyone clear as to exactly how many btc there are at any given time. It's not quite the same scenario as a central bank firing up the printing presses but it's quite similar.

Some say set something up to where if a wallet goes unused after a certain time, to raid it and reintroduce those coins.  That's not good...if I get coins in a Wallet and wait 50 years to touch them, and someone takes them thinking they were lost, that's not good.

I think this is actually thinking along the right lines (and I know I'm very much in a minority here, and I have seen a poster whose opinions I almost always respect and consider carefully, start screaming 'THIEF!!!' at anyone who proposes this). This WOULD be a workable strategy, though it can't be implemented quite the way the OP says. It simply isn't possible (okay, 'computationally tractable') to find the private key of a lost wallet, so the wallet cannot be raided. That's not a matter of changing the protocol, it's a matter of fundamental mathematics.

A different implementation might work something like this: if a UTXO remains U for, say, 50 years, the revised protocol considers it unspendable. The revised protocol then looks to see how many BTC were in the UTXO, and distributes a precisely equal amount of new BTC in the next few coinbase transactions in the next few blocks. This need not cause a problem to people who have stashed BTC away somewhere, as every bitcoin client developer would have big flashing neon signs on their download sites explaining the situation to newbs and reminding them to shuffle their coins around at least once every 50 years. Hell, they could even make the clients check for this and do it automatically.

I can also think of a way we can all reach a consensus on this issue in a timely fashion. Let's say every bitcoin client includes an optional hack in their code, a command line switch or something, making their client behave in the revised way. So you can choose whether you want your client to behave as PureOldSchoolCoin or OMGThief!!!Coin. Also (I'm assuming this is possible, knowledge a bit sketchy here) when the client broadcasts a valid transaction and/or the miner broadcasts a valid block, it sets the value of some bit somewhere (we have spare bits in transactions and blocks, don't we?) to explain which version it's going by. Other validators can then accept or reject according to their economic philosophy as expressed by command line option.

Here's why I don't think there'd be a massive fork, human sacrifices, cats and dogs living together, mass hysteria: if we implement this optional switch NOW, it doesn't make any difference to the actual blockchain for another 45 years. It basically will only act as a barometer of public sentiment, and an adaptable one at that. 45 years from now, anyone who is starting to worry about whether they're going to be in the losing fork, just needs to look at the votes. I assume of course that 45 years from now, the votes WOULD have come down on one side a lot more than the other.

My 2 sats, anyway.

[phelix]

There is a problem here, but not what the OP was saying.

As more coins stop being used we become more unsure of the total market cap of bitcoin because we don't know if those coins are actually lost or simply not being spent.

What if there is a 1 trillion dollar bitcoin economy but 20 of the 21 million coins are considered "lost" because they haven't participated in a transaction in hundreds of years.

But actually 4 million of those coins are simply sitting in a misers wallet.

One day he decides to spend them.

Now suddenly the number of bitcions increases by 5, causing everyones bitcoins value to plummet by 80%. This would be a huge disaster.


So as you see, as more bitcoins become "lost" the value of a bitcoin becomes more uncertain.

This. Simplest solution seems to be a minimum reward.

[drawingthesun]

So there are only 21 million btc's that will ever be mined, and the last coin is projected to be mined sometime around the year 2140.  Awesome, no government printing money at their whim.

However.... People are bound to pass away.  When people with btc die, lets say for optimisms sake that most will have someone that can access their wallets ringer to the bitcoins.  But, the problem is that not every person will.  So these coins are inaccessable by anyone, ever.  

This becomes an issue not right away, but it is an issue.  

Some say modifying the protocol to add more btc, but that defeats the purpose of having a limit in place.

Some say set something up to where if a wallet goes unused after a certain time, to raid it and reintroduce those coins.  That's not good...if I get coins in a Wallet and wait 50 years to touch them, and someone takes them thinking they were lost, that's not good.

Ideas?

I wouldn't worry about it. In a hundred years once a vulnerability is found in the private/public key people will move their coins to a more secure address and the only vulnerable coins will be those lost coins. People will then mine the vulnerable addresses.

I am certain that in a hundred years if bitcoin is still around people will have stolen every lost coin.

[honky1492]

It is not problem even if majority of coins get lost (or unused), but feel free to share your story how you lost your BTC

[Kazimir]

This becomes an issue not right away, but it is an issue.  

Nope, it's not. Never will be, either.

Even if everbody would lose ALL their bitcoins right now, it's still not a problem. See, mining never stops. Even after 2140, mining will still continue as always, it's just that the mining reward becomes lower and lower in an exponential fashion. But never zero. So, new (fractions of) bitcoins will always be newly generated.

No matter how many coins are lost (even ALL coins in existence today or any point in the future), there always will be new (possibly fractional) coins added. Even if there's just one trillionth BTC worldwide, it's enough. Because it's all digital, it's all divisible, and we can use it in the exact same way. So we can call one billionth of the total world supply of Bitcoins (no matter if that's 21M or one billionth of a BTC) a "picocoin" or whatever, and trade with billions of those.

Conclusion: no problem whatsoever.

[faiza1990]

It is not problem even if majority of coins get lost (or unused), but feel free to share your story how you lost your BTC

I lost just because of I lost password of blockchain an lost all my btc and now some lost in inputs also after losing of pin code

[b!z]

Bitcoins are divisible into 8 digits and i think it can be modified to be divisible even further.

[Nancarrow]

Even after 2140, mining will still continue as always, it's just that the mining reward becomes lower and lower in an exponential fashion. But never zero. So, new (fractions of) bitcoins will always be newly generated.

I'm pretty sure this isn't correct, at least as the protocol is designed at the moment. The block reward is designed to keep halving until we run out of bits to continue halving accurately. Then the reward will keep being truncated downwards. The block reward at the last halving will be 1 satoshi, and after that it WILL be exactly zero. Mining will of course continue, being subsidised by transaction fees. And as has been pointed out earlier, it's the unlimited divisibility of EXISTING coins, not particularly newly created ones, that means that there won't ever be a supply problem unless ABSOLUTELY all bitcoins were to be lost. And that wouldn't happen because, for instance, long before the remaining supply was one satoshi, the decimal places would have been extended, and billions of people would own various billionths of that satoshi. There'd never be a situation in which the entire remaining unlost supply of bitcoins was concentrated in a single owner, who'd then decide to eat their wallet.

[cbhelp]

Thanks for all the good responses, after we got past the first few trollish posts, this became a good topic. 

[DannyHamilton]

- snip -
Even after 2140, mining will still continue as always, it's just that the mining reward becomes lower and lower in an exponential fashion. But never zero. So, new (fractions of) bitcoins will always be newly generated.

No matter how many coins are lost (even ALL coins in existence today or any point in the future), there always will be new (possibly fractional) coins added.
- snip -

^^ Incorrect. ^^

- snip -
 as the protocol is designed at the moment. The block reward is designed to keep halving until we run out of bits to continue halving accurately. Then the reward will keep being truncated downwards. The block reward at the last halving will be 1 satoshi, and after that it WILL be exactly zero.
- snip -

^^ Correct. ^^

[odolvlobo]

Thanks for all the good responses, after we got past the first few trollish posts, this became a good topic.  

By "trollish", I assume you mean posts that say that there is no problem, but other than the posts claiming that lost coins create uncertainty, nobody has yet even stated what the problem is.

Now, regarding the uncertainty argument. I'm not convinced that the uncertainty is really a problem. Knowing the size of the money supply is important to those who manage the money supply, but nobody manages the bitcoin money supply, so the importance of knowing its true value is low.

The scenario where someone discovers/recovers the key to a huge number of bitcoins is possible, but it is extremely remote. It is interesting to note that the plundering of the gold in the Americas by Spain had major economic effects on Europe. The effect would be similar in this scenario.

Also, I want to to clarify that the uncertainty is not caused by lost coins. It is caused by the inability to determine which coins are lost. A fixed block reward does not remove or lessen this uncertainty.

Since it cannot be determined which coins are actually lost, the only way to eliminate the uncertainty of lost coins is to declare that certain coins are lost (whether they are or not), and then make them permanently and explicitly unspendable. The problem becomes one of how to decide which coins should be declared lost.

[bg002h]

https://en.bitcoin.it/wiki/Bitcoin_Days_Destroyed

Specifically, cumulative %of bdd.

[Kouye]

OP account is, in my opinion, very likely to be a disposable, one-shot trade/loan scammer one.
I'd ignore it, even though that was a sensitive attempt to kiss this old, stinky troll back to life.

[will1982]

This becomes an issue not right away, but it is an issue.  

Nope, it's not. Never will be, either.

Even if everbody would lose ALL their bitcoins right now, it's still not a problem. See, mining never stops. Even after 2140, mining will still continue as always, it's just that the mining reward becomes lower and lower in an exponential fashion. But never zero. So, new (fractions of) bitcoins will always be newly generated.

No matter how many coins are lost (even ALL coins in existence today or any point in the future), there always will be new (possibly fractional) coins added. Even if there's just one trillionth BTC worldwide, it's enough. Because it's all digital, it's all divisible, and we can use it in the exact same way. So we can call one billionth of the total world supply of Bitcoins (no matter if that's 21M or one billionth of a BTC) a "picocoin" or whatever, and trade with billions of those.

Conclusion: no problem whatsoever.

Yes, but the vanity of "1 bitcoin" will be lost. Then it would be "Hey, this will cost you 500 billionths of a bitcoin!"

[DannyHamilton]

- snip -
Then it would be "Hey, this will cost you 500 billionths of a bitcoin!"

Nah, it's unlikely that things would be priced in "billionths of a bitcoin".  It is far more likely that people will eventually move to various nicknames for small quantities.

As an example, "500 billionths of a bitcoin" is far more likely to be either:

"Hey, this will cost you 500 nanobitcoins" (or 500 nans, or 500 nanobits, or 500 nannies, or 500 nanoes, or whatever nickname becomes common)

or

"Hey, this will cost you 50 Satoshis" (or 50 sats)

Since 500 billionths of a bitcoin is equivalent to 0.00000050

[jeffhuys]

It is not problem even if majority of coins get lost (or unused), but feel free to share your story how you lost your BTC

I lost just because of I lost password of blockchain an lost all my btc and now some lost in inputs also after losing of pin code

Wow. That was hard to read.

[Dissonance]

A solution to this would be creating an expiration on Bitcoins. Say after 10 years if there is no activity in a wallet the bitcoins get returned to the bitcoin community to be mined again.  No flames - since I know this idea would be repugnant to some people and may not even be technically possible - just an idea I'm throwing out there.  The fact is this wont be an issue in the near future.

[cbhelp]

A solution to this would be creating an expiration on Bitcoins. Say after 10 years if there is no activity in a wallet the bitcoins get returned to the bitcoin community to be mined again.  No flames - since I know this idea would be repugnant to some people and may not even be technically possible - just an idea I'm throwing out there.  The fact is this wont be an issue in the near future.

That will not work.  What if I buy now and want to hold until 2030, when I think BTC will be worth 2k each?  You cannot just up and steal my coins....

[tysat]

A solution to this would be creating an expiration on Bitcoins. Say after 10 years if there is no activity in a wallet the bitcoins get returned to the bitcoin community to be mined again.  No flames - since I know this idea would be repugnant to some people and may not even be technically possible - just an idea I'm throwing out there.  The fact is this wont be an issue in the near future.

I think most people would consider that change a problem not a solution.

[marcotheminer]

As the amount of coins become smaller, the value with increase so no problem there!