Where do the "lost" Bitcoins go

[Leahcim]

Hi,

the Number of total Bitcoins is limited, if you loose the key to your wallet, then the coins are gone as far as i understood this. Will the system have less and less Bitcoins over time or is there a way to recover any coins?

Bye
Michael
 

[makoon]

But how would that affect the currency? E.g. what if some of the top wallets are lost wallets. Is that making bitcoins more stable, since the lost wallets are not cashed out?

[PenAndPaper]

But how would that affect the currency? E.g. what if some of the top wallets are lost wallets. Is that making bitcoins more stable, since the lost wallets are not cashed out?

It increases the value of the remaining coins since there can be only a finite amount of them. It's different to have 1 bitcoin out of 21m and different to have one out of 15m.

[Sigmoid]

But how would that affect the currency? E.g. what if some of the top wallets are lost wallets. Is that making bitcoins more stable, since the lost wallets are not cashed out?

Nope. The stability of bitcoin is determined by live supply and demand. Lost money is dead money, it doesn't go anywhere. In a way it has an effect, as it lowers the potential live supply.

Practically, you could generate a paper wallet, put it in a treasure chest and bury it on an island in the Pacific. If it is found two hundred years later, and bitcoin still exists, then that money will be there waiting for whoever has the code.

The money belonging to lost codes will keep waiting until the cryptography is cracked, or someone finds the code.

[de3mka]

they go to the bitcoin heaven... or hell.... depending on what have you spent them before

[MAbtc]

Lost forever, lower total coin supply.

.....Supply and demand, and all that junk. 

[StuffSneak]

I think they are just lost. Nothing will be affected by them as it will be like keeping them as it is in wallet.
Its not like people are going to know this then suddenly price will go up and all. Its just gone.
Just my opinion though

[kernels10]

I'm guessing there's no way to know how many have been "lost"?
If that's true, then couldn't anyone claim loosing a large number of coins to inflate prices?

[overseerio]

I'm guessing there's no way to know how many have been "lost"?
If that's true, then couldn't anyone claim loosing a large number of coins to inflate prices?

The only coins that affect prices are the ones being actively traded (the effective "supply"). Coins that are not in circulation (either in "lost" wallets or just being held) do not really have a significant effect.

Edit: The coins not in circulation don't affect supply (and therefore price) until they are brought back in. Although it's possible that the risk of these coins coming back can decrease prices slightly, I doubt traders are thinking about that fact right now, so its effects are probably negligible.

[kernels10]

I'm guessing there's no way to know how many have been "lost"?
If that's true, then couldn't anyone claim loosing a large number of coins to inflate prices?

The only coins that affect prices are the ones being actively traded (the effective "supply"). Coins that are not in circulation (either in "lost" wallets or just being held) do not really have a significant effect.

Edit: The coins not in circulation don't affect supply (and therefore price) until they are brought back in. Although it's possible that the risk of these coins coming back can decrease prices slightly, I doubt traders are thinking about that fact right now, so its effects are probably negligible.

I guess so, but with there being a finite number of BTC, wouldn't the "value" increase regardless of whether the coins are in circulation or not?

Although, if there's no way prove the actual "loss", then you are right. And, as the prices rise and interest in BitCoin increases, the number of "lost" coins relative to the amount mined should (theoretically) decrease. Thus, reducing their [the "lost" coins] impact on market even further.
I could be completely wrong heh, so please correct me if I am 

[Ryogo]

Lost bitcoins is going in limbo forever...

[overseerio]

I'm guessing there's no way to know how many have been "lost"?
If that's true, then couldn't anyone claim loosing a large number of coins to inflate prices?

The only coins that affect prices are the ones being actively traded (the effective "supply"). Coins that are not in circulation (either in "lost" wallets or just being held) do not really have a significant effect.

Edit: The coins not in circulation don't affect supply (and therefore price) until they are brought back in. Although it's possible that the risk of these coins coming back can decrease prices slightly, I doubt traders are thinking about that fact right now, so its effects are probably negligible.

I guess so, but with there being a finite number of BTC, wouldn't the "value" increase regardless of whether the coins are in circulation or not?

Although, if there's no way prove the actual "loss", then you are right. And, as the prices rise and interest in BitCoin increases, the number of "lost" coins relative to the amount mined should (theoretically) decrease. Thus, reducing their [the "lost" coins] impact on market even further.
I could be completely wrong heh, so please correct me if I am 

I think in a perfectly efficient market, you're right -- knowing if coins are lost or just being held would affect the price since it impacts overall supply. However, traders right now don't seem to be considering these factors at all; they instead care most about making a profit which results in the huge price rollercoasters that happen each day. Eventually, the lost coins may start to matter -- but not for a while!

[kernels10]

I'm guessing there's no way to know how many have been "lost"?
If that's true, then couldn't anyone claim loosing a large number of coins to inflate prices?

The only coins that affect prices are the ones being actively traded (the effective "supply"). Coins that are not in circulation (either in "lost" wallets or just being held) do not really have a significant effect.

Edit: The coins not in circulation don't affect supply (and therefore price) until they are brought back in. Although it's possible that the risk of these coins coming back can decrease prices slightly, I doubt traders are thinking about that fact right now, so its effects are probably negligible.

I guess so, but with there being a finite number of BTC, wouldn't the "value" increase regardless of whether the coins are in circulation or not?

Although, if there's no way prove the actual "loss", then you are right. And, as the prices rise and interest in BitCoin increases, the number of "lost" coins relative to the amount mined should (theoretically) decrease. Thus, reducing their [the "lost" coins] impact on market even further.
I could be completely wrong heh, so please correct me if I am 

I think in a perfectly efficient market, you're right -- knowing if coins are lost or just being held would affect the price since it impacts overall supply. However, traders right now don't seem to be considering these factors at all; they instead care most about making a profit which results in the huge price rollercoasters that happen each day. Eventually, the lost coins may start to matter -- but not for a while!

Agreed.

[PeercoinGiveaway]

I'm guessing there's no way to know how many have been "lost"?
If that's true, then couldn't anyone claim loosing a large number of coins to inflate prices?

The only coins that affect prices are the ones being actively traded (the effective "supply"). Coins that are not in circulation (either in "lost" wallets or just being held) do not really have a significant effect.

Edit: The coins not in circulation don't affect supply (and therefore price) until they are brought back in. Although it's possible that the risk of these coins coming back can decrease prices slightly, I doubt traders are thinking about that fact right now, so its effects are probably negligible.

I guess so, but with there being a finite number of BTC, wouldn't the "value" increase regardless of whether the coins are in circulation or not?

Although, if there's no way prove the actual "loss", then you are right. And, as the prices rise and interest in BitCoin increases, the number of "lost" coins relative to the amount mined should (theoretically) decrease. Thus, reducing their [the "lost" coins] impact on market even further.
I could be completely wrong heh, so please correct me if I am 

I think in a perfectly efficient market, you're right -- knowing if coins are lost or just being held would affect the price since it impacts overall supply. However, traders right now don't seem to be considering these factors at all; they instead care most about making a profit which results in the huge price rollercoasters that happen each day. Eventually, the lost coins may start to matter -- but not for a while!

+1

[GillyPony]

I guess your access disappears into the void unless you just happen to be able to guess the private key. The coins themselves remain intact as long as the blockchain isn't interfered with by rouge mining pools colluding together.

Furthermore, it may be many many years until finally someone will generate your wallet by accident which would allow them to redeem your lost bitcoins.

The finders keepers rule basically applies in this situation.

Although, I wonder why with the Sheep Market Scam... Why they haven't got the miners to collude together to intercept the coins. I know on the Eligius mining website there is a paragraph about law enforcement requiring a warrant in order for Eligius to help in the interception of coins. I'm not even sure if this is possible or not.