Probabilty of losing a Bitcoin: A case for constant growth.

[srb123]

I am in favour of never decreasing the reward for generating a block.

Imagine if 1% of all bitcoin get lost every year. It could take decades but the amount of coin lost would be constant as a percent of total "safe" coins in circulations.

Given this ratio of loss, there will in theory never be more than 260 Million Bitcoins in a circulation. (And it would take 500 years to reach 259 Million.)



So the question becomes:

What is the ratio of coins lost to the network every year?
Is the ratio likely to change?


My first thought is that as long as the amount of bitcoin lost is less than 1% my whole point is moot.

At the moment 1% is probably higher than what we are losing. But what if satoshi forgot his truecrypt password? What if MtGox went a.w.o.l? What if MyBitoin get hacked by some Script Kiddie who didn't know what wallet.dat was and deleted it for fun? What if North Korea fired the E.M.P they have been covertly working on and wiped every hard-drive in Asia?

I've said too much.

Discuss.

[FreeMoney]

Losing coins sucks for whoever loses them, but we aren't going to run out.

I already invented Timecoin which has a constant rate of generation. It's a sinch to implement, but no one cares about it enough to change a few lines of code. Tellingly plenty of people care about a currency with a finite limit.

[srb123]

good point.

So the focus should be on under what circumstances we move the decimal point? (Or a bit-shift if that is deemed more appropriate.).

Is there a plan for dealing with that? (And please dont say "When satoshi say's so?", I think we're growing past that.)

[FreeMoney]

good point.

So the focus should be on under what circumstances we move the decimal point? (Or a bit-shift if that is deemed more appropriate.).

Is there a plan for dealing with that? (And please dont say "When satoshi say's so?", I think we're growing past that.)

It's simple. There is already hundred millionths precision, I've been sent a tx with that much precision. You can't see it in the client, but it is there. By the time we need more 8 places I won't care at all. Neither will anyone with a bitcoin. We'll be at the perpetual party.

/fantasy

It's possible to get more too; I don't understand exactly what would need changed though. Even if it was hard, it wouldn't be a big problem because you could use the network only for 'big' transactions and use wallets or some other solution for small stuff as I imagine most will be doing anyway for security or convenience or whatever, we don't necessarily need every 1 billionth BTC transaction recorded in the chain.

edit to add: I think it would be good to reveal two more decimal places when we're a bit beyond parity. At first it should be a manual switch in the options so people don't get confused.

[grondilu]

In the very unlikely event of the lack of bitcoins in the economy becoming a real problem, we'll just start a new block chain.

PS.  Also, let me make it easier for you.  If you really want a cryptocurrency with 50 units reward for eternity, all you have to do is to change this function into main.cpp :

From this :

Code:

int64 GetBlockValue(int nHeight, int64 nFees)
{
    int64 nSubsidy = 50 * COIN;

    // Subsidy is cut in half every 4 years
    nSubsidy >>= (nHeight / 210000);

    return nSubsidy + nFees;
}

to this :

Code:

int64 GetBlockValue(int nHeight, int64 nFees)
{
    int64 nSubsidy = 50 * COIN;

    // Uncomment this line if you want
    // Subsidy to be cut in half every 4 years
    // nSubsidy >>= (nHeight / 210000);

    return nSubsidy + nFees;
}

That's it.  Normally your program should run fine with other people having done the same modification.

[ptd]

I would support this change. The constant generation of bitcoins would not lead to an ever increasing amount of bitcoins. The rate of bitcoin losses is probably a roughly constant proportion of total bitcoins, wereas bitcoin generation is constant. An equilibrium point will be reached.

To do this what you need to do is agree a changeover time (or block number). Then release a new client which after the specified changeover point generates blocks which:
  a) Have a different value in the version field
  b) Generate coins according to the new scheme rather than the old one
These new blocks would be considered invalid by old clients.

The block chain would fork. If we want to do this we need get widespead support and then choose the first block were we currently plan to start generating 25BTC as a crossover point (2013).

[ptd]

Since the client is open source, everyone could mod his client to add whatever bogus reward to her new block.

Its only bogus if the generating clients say it is.

[FreeMoney]

Bitcoin is not changing, this would be a different currency. This isn't a majority thing. Even if 99% start using a different rule, the Bitcoin rule works just as it always has.

[grondilu]

To do this what you need to do is agree a changeover time (or block number). Then release a new client which after the specified changeover point generates blocks which:
  a) Have a different value in the version field
  b) Generate coins according to the new scheme rather than the old one
These new blocks would be considered invalid by old clients.

The block chain would fork. If we want to do this we need get widespead support and then choose the first block were we currently plan to start generating 25BTC as a crossover point (2013).

Please do so.  I won't buy such a currency, but I think it is important that it exists, only to get rid of people complaining about constant aggregate aspect of bitcoin.

Indeed I forgot to mention that you might use a different version number.   Possibly also a different port, but to me it doesn't seem absolutely necessary.  Please also use a different name than "bitcoin".  "Timecoin" could do, as suggested by FreeMoney, for instance.

[abstraction]

edit to add: I think it would be good to reveal two more decimal places when we're a bit beyond parity. At first it should be a manual switch in the options so people don't get confused.

It should exist now. Suppose a poor community (that has some access to internet) wants to experiment with bitcoins. They can only afford to purchase a relatively small amount. Since their physical products will most likely remain within the community, there will be little to no influx of bitcoins. It shouldn't matter how many bitcoins they have since any amount of money or currency will be sufficient for a market economy.

Another example: suppose I want to easily promote the bitcoin concept to my non-technical friends. I would create an account on an eWallet site, then go to the bitcoin spigot and get 0.05BTC transferred to my account. That should be sufficient to distribute 0.005BTC each to 10 friends to get them trading, and thus expanding the bitcoin network.

[FreeMoney]

edit to add: I think it would be good to reveal two more decimal places when we're a bit beyond parity. At first it should be a manual switch in the options so people don't get confused.

It should exist now. Suppose a poor community (that has some access to internet) wants to experiment with bitcoins. They can only afford to purchase a relatively small amount. Since their physical products will most likely remain within the community, there will be little to no influx of bitcoins. It shouldn't matter how many bitcoins they have since any amount of money or currency will be sufficient for a market economy.

Another example: suppose I want to easily promote the bitcoin concept to my non-technical friends. I would create an account on an eWallet site, then go to the bitcoin spigot and get 0.05BTC transferred to my account. That should be sufficient to distribute 0.005BTC each to 10 friends to get them trading, and thus expanding the bitcoin network.

I'd have nothing against adding more now, not as an option. The issue will be that tx fees of .01 are required for amounts under .01. It will take a while for people to all adopt a new default rule set, but that's a reason to start earlier.

In case this issue isn't clear to anyone, it isn't a breaking change, it's just that you'll have to wait a long time to get your tiny transactions processed without a fee until most people have changed their rules.

[Babylon]

good point.

So the focus should be on under what circumstances we move the decimal point? (Or a bit-shift if that is deemed more appropriate.).

Is there a plan for dealing with that? (And please dont say "When satoshi say's so?", I think we're growing past that.)

It's simple. There is already hundred millionths precision, I've been sent a tx with that much precision. You can't see it in the client, but it is there. By the time we need more 8 places I won't care at all. Neither will anyone with a bitcoin. We'll be at the perpetual party.

/fantasy

It's possible to get more too; I don't understand exactly what would need changed though. Even if it was hard, it wouldn't be a big problem because you could use the network only for 'big' transactions and use wallets or some other solution for small stuff as I imagine most will be doing anyway for security or convenience or whatever, we don't necessarily need every 1 billionth BTC transaction recorded in the chain.

edit to add: I think it would be good to reveal two more decimal places when we're a bit beyond parity. At first it should be a manual switch in the options so people don't get confused.

A change in the transaction fees will be important as well, so that it becomes possible to send amounts smaller than .01

[grondilu]

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