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Author Topic: what about the bitcoins that are gone in the future  (Read 2019 times)
BOARBEAR
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February 28, 2011, 04:55:55 AM
 #1

"The total eventual circulation will be 21 million bitcoins.  There will never be more coins than that."

I wonder is this a good thing for bitcoin?

what about the bitcoin that are 'dead' - no longer can be used in the future.

what if
1. The owner of the bitcoin dies and does not leave his bitcoin to anybody
2. Someone's wallet is lost

which seems likely to occur to me, then would that amount of bitcoin just be gone and nobody can use it?
If yes then these 'dead' bitcoin is going to be big in the very long run and no fresh bitcoin is going to be made.

Imaging bitcoin becomes popular and we want to use this currency forever, and some amount of bitcoin is lost from this economy each day.

Does anybody think this is a problem?
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February 28, 2011, 05:22:47 AM
 #2

"The total eventual circulation will be 21 million bitcoins.  There will never be more coins than that."

I wonder is this a good thing for bitcoin?

what about the bitcoin that are 'dead' - no longer can be used in the future.

what if
1. The owner of the bitcoin dies and does not leave his bitcoin to anybody
2. Someone's wallet is lost


Deflation happens.  With Bitcoin's high divisibility, any permanent losses of the monetary base simply makes the remainder more valuable; literally the reverse of the debasement of a currency (i.e. inflation)

Quote

which seems likely to occur to me, then would that amount of bitcoin just be gone and nobody can use it?
If yes then these 'dead' bitcoin is going to be big in the very long run and no fresh bitcoin is going to be made.

Imaging bitcoin becomes popular and we want to use this currency forever, and some amount of bitcoin is lost from this economy each day.

Does anybody think this is a problem?

No.  Not anyone here who has an economics background, or has been here long enough to understand it, anyway.  It really isn't a problem, but I understand that me saying so doesn't really help.  Please search the archives on this topic, as it has been beaten long since dead.

"The powers of financial capitalism had another far-reaching aim, nothing less than to create a world system of financial control in private hands able to dominate the political system of each country and the economy of the world as a whole. This system was to be controlled in a feudalist fashion by the central banks of the world acting in concert, by secret agreements arrived at in frequent meetings and conferences. The apex of the systems was to be the Bank for International Settlements in Basel, Switzerland, a private bank owned and controlled by the world's central banks which were themselves private corporations. Each central bank...sought to dominate its government by its ability to control Treasury loans, to manipulate foreign exchanges, to influence the level of economic activity in the country, and to influence cooperative politicians by subsequent economic rewards in the business world."

- Carroll Quigley, CFR member, mentor to Bill Clinton, from 'Tragedy And Hope'
Dude65535
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February 28, 2011, 05:26:06 AM
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If all but .01 bitcoins were lost it would still be possible for the whole world to use bitcoin. Bitcoins are infinitely divisible. The current software limits the number of decimal places that can be used but that could be changed if it be came necessary.

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BOARBEAR
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February 28, 2011, 05:42:01 AM
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Why not make the 'dead' bitcoin reclaimable(say regenerated if inactive for 50 years).  And continuously deflation might not be a good thing(eg. discourage investment).
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February 28, 2011, 05:48:37 AM
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If all but .01 bitcoins were lost it would still be possible for the whole world to use bitcoin. Bitcoins are infinitely divisible. The current software limits the number of decimal places that can be used but that could be changed if it be came necessary.

Well, not infinite... it's digital, there is a limit on how small a number can be. That number is insanely small, but not infinitely so.

But if it ever gets that bad, there's no reason that we couldn't start a new block chain, and start from scratch.

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February 28, 2011, 06:11:28 AM
 #6

Why not make the 'dead' bitcoin reclaimable(say regenerated if inactive for 50 years).  And continuously deflation might not be a good thing(eg. discourage investment).

Mostly because it would introduce an exploit path and reduce security.  Think about this; whether you use time, or confirmations, or whatever to age an account, how would you go about writing such rules into the vanilla client so that all honest nodes could collectively agree when an account is lost or abandoned as well as stop malicious clients from being able to take advantage of that?  Currently it's impossible for any lost coins to be recovered, honestly or not, so it's equally impossible for that to be an attack vector.  Add to that, what would be the gain to the network to be able to recover lost coins?  As already mentioned, lost coins are not a problem for the network's function, and everyone else's base value increases slightly when you lose your wallet down the memory hole.  So the only loser in the event is the owner of those coins.  The rest of the network has no incentive to risk such an attack vector.

And deflation does not discourage investment, although it can alter the risk/reward calculations of an investor.  Any deflation that Bitcoin would experience after all 21 million bitcoins had been dispersed would be very gradual.  Actually, we are experiencing a great deal more deflation right now, due to the size of the bitcoin economy increasing at a vastly greater rate than the currency is currently inflating.  Considering that Bitcoin is currently inflating at about 50% APR, it says a lot that the value has been increasing at the pace that it has.

"The powers of financial capitalism had another far-reaching aim, nothing less than to create a world system of financial control in private hands able to dominate the political system of each country and the economy of the world as a whole. This system was to be controlled in a feudalist fashion by the central banks of the world acting in concert, by secret agreements arrived at in frequent meetings and conferences. The apex of the systems was to be the Bank for International Settlements in Basel, Switzerland, a private bank owned and controlled by the world's central banks which were themselves private corporations. Each central bank...sought to dominate its government by its ability to control Treasury loans, to manipulate foreign exchanges, to influence the level of economic activity in the country, and to influence cooperative politicians by subsequent economic rewards in the business world."

- Carroll Quigley, CFR member, mentor to Bill Clinton, from 'Tragedy And Hope'
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February 28, 2011, 07:48:31 AM
 #7

Let's say 1 millibitcent (1e^-8) BTC is 1 satoshi, the practically smallest denomination at present, then there are 100 million (1e^8) satoshis in a bitcoin.

5.55 million (5.55e^6) BTC have been generated to date, that is, there are 555 trillion satoshis (5.55e^14) in circulation.

Look after your satoshis and the bitcoins will look after themselves.

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February 28, 2011, 08:06:59 AM
 #8

1. The owner of the bitcoin dies and does not leave his bitcoin to anybody
2. Someone's wallet is lost

This is not likely to happen very frequently once Bitcoins become mainstream and people store a serious proportion of their wealth in Bitcoin.

The scenario you describe is equivalent to someone burying gold coins in the garden and telling nobody about it until they die.

Most sane people don't store gold in this way. They keep it in a bank vault, they insure it, and they leave instructions with their lawyer or notary in case they die.

Similarly, most sane people won't store most of their Bitcoins on a single wallet.dat file on their laptop, once Bitcoin becomes mainstream. Unless it's only a small amount. 

At the very least they will make several backups and tell a family member about them.

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stakhanov
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February 28, 2011, 08:30:53 AM
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Well, not infinite... it's digital, there is a limit on how small a number can be. That number is insanely small, but not infinitely so.


You can do arbitrary precision computations with a computer. If we decided to add 300 or even 3 million digits to the accuracy of bitcoins, it should be possible in theory. However I'm not familiar enough with the bitcoin protocol to be absolutely sure that this is true in practice. Could an expert confirm/infirm?
myrkul
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February 28, 2011, 08:48:22 AM
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Well, not infinite... it's digital, there is a limit on how small a number can be. That number is insanely small, but not infinitely so.


You can do arbitrary precision computations with a computer. If we decided to add 300 or even 3 million digits to the accuracy of bitcoins, it should be possible in theory. However I'm not familiar enough with the bitcoin protocol to be absolutely sure that this is true in practice. Could an expert confirm/infirm?

Sure, we could use 64 or 128 bytes to store a buttload of 0's, or, we could hit the reset button and start a new block chain. Takes less bandwidth and computational power.

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ribuck
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February 28, 2011, 10:04:59 AM
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Does anybody think this is a problem?

People lose physical gold every day, but the gold economy isn't harmed.
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February 28, 2011, 10:28:05 AM
 #12

Why not make the 'dead' bitcoin reclaimable(say regenerated if inactive for 50 years).  And continuously deflation might not be a good thing(eg. discourage investment).

if a bitcoin lies around for 50 years in the same wallet does not mean it's dead/lost, maybe there's nothing good enough to exchange it for?

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February 28, 2011, 02:08:25 PM
 #13

what if
1. The owner of the bitcoin dies and does not leave his bitcoin to anybody
2. Someone's wallet is lost
Use the search function next time. These question have come up several times now.

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February 28, 2011, 08:03:43 PM
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At the very least they will make several backups and tell a family member about them.

Or the wily, mischievous old guy could make several identical back-up wallets and bequeath a copy to each of his undeserving relatives in his will.

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February 28, 2011, 09:48:27 PM
 #15

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At the very least they will make several backups and tell a family member about them.

Or the wily, mischievous old guy could make several identical back-up wallets and bequeath a copy to each of his undeserving relatives in his will.

Gives a whole new meaning to "race condition"  Cheesy

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