With Bitcoin lost permanently over time how will it affect Bitcoin as currency?

[krogothmanhattan]

      With a percentage Bitcoin lost permanently over time…how will it affect Bitcoin as the one and only world currency?

      An article I just came across on Forbes says close to 4 million Bitcoin have been lost forever.

      When Bitcoin becomes a major world currency only 17 million Bitcoins will be available to circulate.

      Yes that 17 million can then be broken down to 100,000,000 Satoshi so plenty of bitcoin to be around.

     But one thing nags me all the time….What happens when more btc is lost over  time and the available amount drops to say 10 million or less.

     This will happen due to paper wallets lost forever and pcs wiping out private keys etc etc etc

      Also I am not counting the amount people HODL and never circulate.

      How will this affect the performance of Bitcoin as a digital world currency.

      Will it cause banks not to have enough bitcoin in their reserves?

      Will it affect a price adjustment on goods and how will it affect the economy as a whole?

      Will there be a deflation in prices and will the value of Bitcoin be stable at some point and then become volatile because of this?

      I am all for Bitcoin and I really understand the potential Bitcoin hodls for us down the line.

     However I am not economist and would love to hear someone clarify this for me.  Thanks


     

   

[stompix]

Will it cause banks not to have enough bitcoin in their reserves?

Why would you still need banks if bitcoin would become a world currency?

Will it affect a price adjustment on goods and how will it affect the economy as a whole?

This will be adjusted based on the simple principle of demand and offer, the less bitcoin there are the more they are valued.
But it depends a lot on the percentage of bitcoins lost compared to the ones in circulation in a time frame, and it depends on how you define lost. If let's say a government would f their wallets and 100k bitcoin out of 10 millions would be lost in a matter of hours, that could start some fireworks....

Will there be a deflation in prices and will the value of Bitcoin be stable at some point and then become volatile because of this?

Choose one or the other.
The price of Bitcoin will always be volatile the only thing we don't know is by how much. And more important...relative to what?

Will it affect a price adjustment on goods and how will it affect the economy as a whole?

As for the economy as a whole...I have no clue and this is a question far to complex to be answered since we don't have a single example of even a small community running on bitcoin.
Referring to the goods, it will be the same law of offer and demand.
Less bitcoins, more cheese you can buy, but at the same time, if less cheese on sale, less cheese you can buy even if bitcoins keep getting lost.

[krogothmanhattan]

Why would you still need banks if bitcoin would become a world currency?

    Then I should of said exchanges or places where people can buy bitcoin

 

But it depends a lot on the percentage of bitcoins lost compared to the ones in circulation in a time frame, and it depends on how you define lost

   When I say lost I mean lost forever due to carelessness and lost wallets that have no backups.

 

The price of Bitcoin will always be volatile the only thing we don't know is by how much. And more important...relative to what?

   Relative to its price at an earlier date. At some point I would assume Bitcoin will finally settle into a fixed price in order for it to be a viable currency.

 

[avikz]

I seriously respect your confidence when you say the below comment,

"When Bitcoin becomes a major world currency only 17 million Bitcoins will be available to circulate."

The truth is, that the chance of bitcoin becoming a world currency is very less because of its decentralized nature. Governments can adopt bitcoins to be infused in their economy but it will neither become a main currency for any country nor become a major world currency. The reason is bitcoin is not controlled by anyone. The world trade can't be dependent on such a currency which is not controlled by any central authority, thus making bitcoin less important here.

Bitcoin is good in its current form. Expecting more than it can deliver, can actually slump its growth. Let it remain a digital currency which governments can adopt, but dreaming about a world currency can lead us to disappointment.

[jpespa]

Well if bitcoin lost more of its quantity, I don't think it would still be considered a currency. If ever there will be an increase of permanent bitcoin loss I don't think it will survive the demand of its community. Worst case would be the value of bitcoin may increase drastically where no one can afford to buy because of higher demand or decrease because more people leave bitcoin and it becomes unprofitable.

[Sinecoin]

     With a percentage Bitcoin lost permanently over time…how will it affect Bitcoin as the one and only world currency?

      An article I just came across on Forbes says close to 4 million Bitcoin have been lost forever.

      When Bitcoin becomes a major world currency only 17 million Bitcoins will be available to circulate.

      Yes that 17 million can then be broken down to 100,000,000 Satoshi so plenty of bitcoin to be around.

     But one thing nags me all the time….What happens when more btc is lost over  time and the available amount drops to say 10 million or less.

     This will happen due to paper wallets lost forever and pcs wiping out private keys etc etc etc

      Also I am not counting the amount people HODL and never circulate.

      How will this affect the performance of Bitcoin as a digital world currency.

      Will it cause banks not to have enough bitcoin in their reserves?

      Will it affect a price adjustment on goods and how will it affect the economy as a whole?

      Will there be a deflation in prices and will the value of Bitcoin be stable at some point and then become volatile because of this?

      I am all for Bitcoin and I really understand the potential Bitcoin hodls for us down the line.

     However I am not economist and would love to hear someone clarify this for me.  Thanks


      

    

The majority of the coins that have been lost were lost many years ago during the infancy of bitcoin.  Even though it is a lot i dont think many coins will be lost in the future because people will start to become more vigilant due to the increase in value.  However, the loss of 4m coins has definitely affected the price because the supply is so much less than what it could be.

[brickafterbrickwalldpt]

Why would you still need banks if bitcoin would become a world currency?

There are people who use web wallets so why wouldn't there be people who wanted to use banks because they still trust them? Don't expect anyone to understand the purpose of Bitcoin.

The number of lost bitcoins can affect Bitcoin price in the future. Lost bitcoins can be considered as donation to the community because there are less coins available on the market which theoritically should make them more valuable. Running out of coins won't be a problem because we can always make Bitcoin dividable more than up to 1 satoshi.

[berrygood]

Why would you still need banks if bitcoin would become a world currency?

There are people who use web wallets so why wouldn't there be people who wanted to use banks because they still trust them? Don't expect anyone to understand the purpose of Bitcoin.

The number of lost bitcoins can affect Bitcoin price in the future. Lost bitcoins can be considered as donation to the community because there are less coins available on the market which theoritically should make them more valuable. Running out of coins won't be a problem because we can always make Bitcoin dividable more than up to 1 satoshi.

Most people in the world for now can't use bitcoin safely, so if it is now claimed to be a world currency, most people would not want to use wallets as like a bank account if the bitcoin is not guaranteed. But to me it is more about perception rather than security or guarantee.

[hodlftw]

Governments can adopt bitcoins to be infused in their economy but it will neither become a main currency for any country nor become a major world currency. The reason is bitcoin is not controlled by anyone. The world trade can't be dependent on such a currency which is not controlled by any central authority, thus making bitcoin less important here.

It begs the question then, why can something that isn't controlled by anybody become world currency? To me that seems the most fair and would be in line with egalitarianism principles.

[snaper14]

the price may rich very high amounts if over time there would be less and less btc in market but also there is an option of hard fork where you can create more btc and replace for example the cents with it.

[Herbert2020]

the amount lost for real is never going to be that much and also you are assuming people are going to continue losing bitcoin over time is not as correct as you think. obviously losses will happen but not as much as before. the more valuable bitcoin is becoming and the more education people are receiving the less losses are going to happen. for example back when you could find a block with your CPU and get 50BTC you never cared enough to hold it so there are a lot of lost wallets with large amounts of bitcoin in them.
but as bitcoin value is higher and will be higher in the future also people aren't going to be as careless. and also each person is not going to have 10000 bitcoin to lose. they will have smaller like 0.01 to lose so the total is not going to be that much either. (it is declining).

and finally i should add that the cap is at 2,100,000,000,000,000 satoshi. there is enough zeros to cover any losses.

[BitcoinNewbie15]

As time goes on fewer and fewer Bitcoin will be lost as people are extra careful with their holdings. In the early days, people didn't take Bitcoin seriously, which is why there are millions lost already. It would likely take 1000s of years before people losing their holdings become a problem.

[inthelongrun]

Bitcoins being lost forever is just like those other coins burning some part of their supplies and that is actually good as the supply is getting scarce. This is not like the centralized stock market where a stock split can adjust the price. Here in decentralized crypto no one can make adjustment on the secured system that is already running.

[nick_nick]

I seriously respect your confidence when you say the below comment,

"When Bitcoin becomes a major world currency only 17 million Bitcoins will be available to circulate."

The truth is, that the chance of bitcoin becoming a world currency is very less because of its decentralized nature. Governments can adopt bitcoins to be infused in their economy but it will neither become a main currency for any country nor become a major world currency. The reason is bitcoin is not controlled by anyone. The world trade can't be dependent on such a currency which is not controlled by any central authority, thus making bitcoin less important here.

Bitcoin is good in its current form. Expecting more than it can deliver, can actually slump its growth. Let it remain a digital currency which governments can adopt, but dreaming about a world currency can lead us to disappointment.

Very very true. Bitcoin can be accepted by certain economies as a major currency but not to affect the whole wide world as a universal currency. Bitcoin is not centralized, its rather a decentralized currency that cannot be holistically controlled by any central authority.

[krogothmanhattan]

I seriously respect your confidence when you say the below comment,

"When Bitcoin becomes a major world currency only 17 million Bitcoins will be available to circulate."

The truth is, that the chance of bitcoin becoming a world currency is very less because of its decentralized nature. Governments can adopt bitcoins to be infused in their economy but it will neither become a main currency for any country nor become a major world currency. The reason is bitcoin is not controlled by anyone. The world trade can't be dependent on such a currency which is not controlled by any central authority, thus making bitcoin less important here.

Bitcoin is good in its current form. Expecting more than it can deliver, can actually slump its growth. Let it remain a digital currency which governments can adopt, but dreaming about a world currency can lead us to disappointment.

Very very true. Bitcoin can be accepted by certain economies as a major currency but not to affect the whole wide world as a universal currency. Bitcoin is not centralized, its rather a decentralized currency that cannot be holistically controlled by any central authority.

  To me the beauty and genius of Bitcoin is that it is decentralized and there is a limited amount of Bitcoin of only 21 million ever to be mined.

  This will basically eliminate inflation altogether  and remove the erosion of the purchasing power loss that Fiat paper money have gone thru in the past 100 years.

  So basically the inability of creating more bitcoin past the 21 million is what concerns me if we ever reach a point where so much is lost that it CAN make it an issue.

   I wonder what the point would be.

   I am sure we would never get there..I am talking about worse case scenario.

[stompix]

But it depends a lot on the percentage of bitcoins lost compared to the ones in circulation in a time frame, and it depends on how you define lost

When I say lost I mean lost forever due to carelessness and lost wallets that have no backups.

The problem in defining lost is that you can't know for sure if some coins are lost or in cold storage.
I for example have 1 BTC stored away separately from 2013 and haven't touched it and probably won't touch it till we reach 100k or 200k or go knows what number.
How would you be able to tell the difference between that coin and a truly lost one?

The price of Bitcoin will always be volatile the only thing we don't know is by how much. And more important...relative to what?

   Relative to its price at an earlier date. At some point I would assume Bitcoin will finally settle into a fixed price in order for it to be a viable currency.

Your scenario included the words "world only currency".
So if bitcoin is the only currency, how do you calculate it's price as both the USD and the Euro will be long gone.
This is where the problem gets really tricky.