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Author Topic: Bitcoin loss  (Read 1499 times)
rotrott
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October 29, 2011, 12:44:04 PM
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I'm sure this has probably been discussed, so please point me in the direction of those threads if it is true.

What happens if the value of a bitcoin reaches a level where it's easy for an entity to buy a large chunk of them and then send them into oblivion?  Could the system sustain a loss of 5 million coins?  At what percentage loss would the system be unusable?

Also, if we lose just 1/5th of a percent bitcoins per year (due to mistakes and what not) we will lose half the available coins in 210 years. (I hope my math is correct Smiley)
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October 29, 2011, 01:06:18 PM
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The system could survive on one bitcoin...or a half a bitcoin...or a tenth of a bitcoin.  At some point it might be desirable to shift the decimal point, but the system would be just fine.

(gasteve on IRC) Does your website accept cash? https://bitpay.com
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October 29, 2011, 01:34:12 PM
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If a huge amount of bitcoin is lost, the existing bitcoins will definitely be worth more.  There will be only 21 million bitcoins in the world.
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October 29, 2011, 01:36:23 PM
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bitcoin stackexchange has a very complete Q&A on this topic

http://bitcoin.stackexchange.com/q/1638/307
rotrott
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October 29, 2011, 01:42:57 PM
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Thanks!  I didn't do the math on the number of discrete units are in a single bitcoin.  I knew it was a lot, but not 210 trillion.
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October 29, 2011, 01:44:13 PM
 #6

The system could survive on one bitcoin...or a half a bitcoin...or a tenth of a bitcoin.  At some point it might be desirable to shift the decimal point, but the system would be just fine.

Although, if the world is running on one or two coins and pricing things somewhere in the region of nano-satoshis - a suddenly discovered stash of an old coin or two would certainly be a disruptive shake-up to the economy!

At some point the fear/risk of surprise injections of coins may be enough to warrant a push to migrate to a new chain.
I cringe at the idea of invalidating old coins that haven't moved in years (think political prisoners locked up for 30yrs etc), but perhaps some mechanism could be built in to limit the rate at which old coins could be spent, based on the overall transaction volume; so that if the proportions are large there is at least some delay/warning when previously assumed destroyed coins are coming back into the economy.

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October 29, 2011, 02:19:54 PM
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The system could survive on one bitcoin...or a half a bitcoin...or a tenth of a bitcoin.  At some point it might be desirable to shift the decimal point, but the system would be just fine.

Although, if the world is running on one or two coins and pricing things somewhere in the region of nano-satoshis - a suddenly discovered stash of an old coin or two would certainly be a disruptive shake-up to the economy!

At some point the fear/risk of surprise injections of coins may be enough to warrant a push to migrate to a new chain.
I cringe at the idea of invalidating old coins that haven't moved in years (think political prisoners locked up for 30yrs etc), but perhaps some mechanism could be built in to limit the rate at which old coins could be spent, based on the overall transaction volume; so that if the proportions are large there is at least some delay/warning when previously assumed destroyed coins are coming back into the economy.
Good point.  The good news is that the more valuable a bitcoin becomes, the less likely it will be that people lose them.

(gasteve on IRC) Does your website accept cash? https://bitpay.com
Meni Rosenfeld
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October 29, 2011, 04:19:20 PM
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Thanks!  I didn't do the math on the number of discrete units are in a single bitcoin.  I knew it was a lot, but not 210 trillion.
One bitcoin has 100 million units (which can be increased with a protocol modification). The 210 trillion figure was the total number of units in all coins for a hypothetical scenario where 90% of coins are lost and there are 2.1 million coins.

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October 29, 2011, 08:40:28 PM
 #9

I'm sure this has probably been discussed, so please point me in the direction of those threads if it is true.

What happens if the value of a bitcoin reaches a level where it's easy for an entity to buy a large chunk of them and then send them into oblivion?  Could the system sustain a loss of 5 million coins?  At what percentage loss would the system be unusable?

Also, if we lose just 1/5th of a percent bitcoins per year (due to mistakes and what not) we will lose half the available coins in 210 years. (I hope my math is correct Smiley)


if lost coins becomes a problem we will simply start mining them back!

edd
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October 29, 2011, 08:44:28 PM
 #10

I'm sure this has probably been discussed, so please point me in the direction of those threads if it is true.

What happens if the value of a bitcoin reaches a level where it's easy for an entity to buy a large chunk of them and then send them into oblivion?  Could the system sustain a loss of 5 million coins?  At what percentage loss would the system be unusable?

Also, if we lose just 1/5th of a percent bitcoins per year (due to mistakes and what not) we will lose half the available coins in 210 years. (I hope my math is correct Smiley)


if lost coins becomes a problem we will simply start mining them back!

Correct. Quantum computing should be capable of finding those "lost" coins by the time it becomes an issue.

Still around.
Akemashite Omedetou
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October 29, 2011, 10:51:56 PM
 #11

Quote
At some point the fear/risk of surprise injections of coins may be enough to warrant a push to migrate to a new chain.
I cringe at the idea of invalidating old coins that haven't moved in years (think political prisoners locked up for 30yrs etc), but perhaps some mechanism could be built in to limit the rate at which old coins could be spent, based on the overall transaction volume; so that if the proportions are large there is at least some delay/warning when previously assumed destroyed coins are coming back into the economy.

Something like this will probably get implemented in the coming years. Bitcoins are not very useful for long-term storage right now anyways, because of the volatility of the price. Noone even knows if the bitcoins are going to be around for another year... I mean, cryptocurrency as a concept is not going anywhere, but what if an alternative implementation comes along that everybody will like and switch to? Contemporary clones lie ixcoin, i0coin and such are just a pathetic pump-and-dump schemes, but what if a truly innovative currency will come along?

Quote
if lost coins becomes a problem we will simply start mining them back!

If that is so simple, why don't you start mining them right now? There are plenty of lost coins out there.

Quote
Correct. Quantum computing should be capable of finding those "lost" coins by the time it becomes an issue.

Cool story, bro!  Wink

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