Mechanism for Retrieving lost BTC

[KingsDen]

It is known that there is 21million BTC available and minable. Then about  87% of these minable BTC has been mined. Also, the last BTC would be mined in 100+yrs.
Research also showed that about 20% of the whole BTC supply are permanently lost or irretrievable.
The causes of these losses are and not limited to;
A. lost of private keys of the users
B. Death of BTC owners
C. Error by BTC users.

Just like the fiat banking system, where monies hardly lost because there is always provision for next of kin who will claim such monies in the case of demise. BTC should have a similar feature. If not, there should be a periodic review, maybe every 5years, when all the platforms give access to the owners to retrieve thier BTC without private keys either by answering easy questions. (Though this might compromise security, but this should only apply to such accounts that has been dormant for years).
Again,  if the above proposals do not apply, there should be a system that will re-incorporate the permanently lost BTC into circulation as new BTC(maybe every decade) in order to augment the fixed 21million supply.
With this the BTC supply would be technically infinite, because it will look like recycling the lost 20% every 10yrs.
For this to be effective, there should be a system to accurately differentiate lost BTC from BTC on longer term savings.

If the above does not fit still. Is there a way to recover lost BTC?
Because I see this as a feature fighting against BTC growth, because not all users are educated, not all are technically inclined and not all are good record keepers.
Thank you all.

[ranochigo]

Just like the fiat banking system, where monies hardly lost because there is always provision for next of kin who will claim such monies in the case of demise. BTC should have a similar feature. If not, there should be a periodic review, maybe every 5years, when all the platforms give access to the owners to retrieve thier BTC without private keys either by answering easy questions. (Though this might compromise security, but this should only apply to such accounts that has been dormant for years).
Again,  if the above proposals do not apply, there should be a system that will re-incorporate the permanently lost BTC into circulation as new BTC(maybe every decade) in order to augment the fixed 21million supply.
With this the BTC supply would be technically infinite, because it will look like recycling the lost 20% every 10yrs.
For this to be effective, there should be a system to accurately differentiate lost BTC from BTC on longer term savings.

If the above does not fit still. Is there a way to recover lost BTC?
Because I see this as a feature fighting against BTC growth, because not all users are educated, not all are technically inclined and not all are good record keepers.
Thank you all.

No. If you were to implement a system which gives arguably easier ways to recover their Bitcoin, then it won't work. Bitcoin cannot restrict the number of people or ensure the authenticity of such requests, because there isn't any central authority. It is up to their user to create multiple backups and redundancy for their funds, and I expect this to be practiced more nowadays given the rise in the price. If they can't properly store their private keys or seeds, then too bad for them.

Why do people always think we need to reincoporate the Bitcoins back into the supply? There isn't any way to ascertain if coins are lost at all and having 21 million or anywhere near that is not necessarily for Bitcoin. There is no problems with a circulating supply that is much lower than that.  You cannot start stealing user's funds like that, nor is Bitcoin designed to have an unlimited supply cap.

[kaggie]

Answering "easy questions" to recover bitcoin would be anti-bitcoin though, because who would review it? Recovering coins would require trust and centralisation.  

The only way to prove an original owner is with their private keys. If you don't have the private keys or know who does, then you don't know the intentions of the original owners. Recycling the coins could remove wealth from original real owners. What happens when you have people like Faketoshi claim addresses that aren't theirs?

If lost coin is an issue, then you can constantly inflate the supply so the maximum is not 21 million. Convince the miners and nodes to do that.

[Lucius]

You are comparing the classic financial system to Bitcoin, and here you are making the biggest mistake in your attempt to devise some kind of mechanism that would allow anyone to succeed in successfully regaining the BTC they have somehow lost. However, you cannot implement such a system in something as complex as Bitcoin, because then it would mean that there are vulnerabilities that would allow anyone to try to steal someone else's BTC under the pretext of saving something that does not really belong to them.

Of course there are mechanisms that allow anyone to try to recover lost information (seed, private key or wallet password), but it all depends on how complicated a particular situation is - whether someone is missing 2 or 5 words from the seed, or the password is simple or complicated. In this regard, I can say that there are tools that allow anyone to try to save their lost or locked information, or that there is a service that does such things.

However, if the funds are in the custodial wallet, then it all depends on that service - a good example is the hack Mt.Gox, which has not yet compensated its clients, and so many years have passed, and the thing is completely clear.

For more information ->

Trying to recover bitcoin? Read this
Bitcoin Wallet Recovery Services - for forgotten wallet password

[sheenshane]

Is there a way to recover lost BTC?

There's no way to recover them, lost Bitcoin is just permanently lost, and sad to know, the lost Bitcoin kept growing in available circulating supply year by year.  This is just considered as forgotten or forever lost and it will be reducing the overall circulating supply.  There's no way can change the fixed limited supply of 21 million, unless if there's someone who will change the Bitcoin protocol which is a big irrelevance from its users and also the miners.

You can't compare the fiat currency into Bitcoin, while the Federal Reserve can print more money or for the government can continue to fund its deficit spending.

Just my two cents ain't expert about banking finance.

[skarais]

In most case the loss of bitcoin is permanent, so it is generally the fault of the bitcoin users themselve who fail to secure them. Always keep an offline backup of the wallet file and all password associated with the wallet and consider inheriting ownership to someone you can trust. This is the best way to minimize the risk of permanently losing bitcoin as there is no successful way to recover lost bitcoin.

I don't think that what you are thinking is a wise way to return bitcoin to full supply in the market after it has been declared permanently lost. However, long-term bitcoin holders are still possible to deactivate a wallet filled with the number of bitcoin they purchased in the last 5-10 years. If your thinking works, then I think bitcoin will no longer be called a decentralized asset.

[khaled0111]

Some of the big centralized exchanges allow transferring crypto currencies including bitcoin to heirs in case of death of the account owner. The problem is that most bitcoiners don't store their coins on exchanges, they store them on their non-custodial wallets meaning that those coins will be lost forever when they passaway.
According to a Chainalysis research, around 4M bitcoin have been lost already but thanks to its divisibility, there will be always enough for everyone. Moreover, scarcity makes bitcoin more valuable, so it's not really a bad thing

[Oilacris]

If the above does not fit still. Is there a way to recover lost BTC?
Because I see this as a feature fighting against BTC growth, because not all users are educated, not all are technically inclined and not all are good record keepers.
Thank you all.

Once you do lost the keys of certain wallet then those coins would be considered lost forever and this is the beauty of Bitcoin despite on having those kind of cons when it comes to retrieval.This do really shows up total decentralization or full control of your funds on where as long you do have they keys then you do have the full control of those coins.

There's no way for some alteration of codes since Bitcoin do really work on this way and this is why whenever you do tend to make out engagement with bitcoin or crypto market then you should at least know the basics.

It isnt really that hard to understand that "No keys No coins" .. Its designed on that way and just deal with it rather than on hoping for some changes which its impossible for it to happen.

[KingsDen]

Some of the big centralized exchanges allow transferring crypto currencies including bitcoin to heirs in case of death of the account owner. The problem is that most bitcoiners don't store their coins on exchanges, they store them on their non-custodial wallets meaning that those coins will be lost forever when they passaway.

Very nice nice to know. But as you pointed out, many users don't save their coins on exchanges. But some exchanges are reputable, like Binance. Which means they can be good for holding. Does Binance has this feature?

[Kittygalore]

To answer the question, no there's no way to recover bitcoin unless you have a miracle machine that can decipher the private keys of the addresses that got lost but contains a considerable amount of bitcoin but other than that, there's no other way to recover any lost bitcoin. Also, your 20% is just an estimate of lost coins because we don't exactly know if those coins were really lost or it was just dormant because the owner wants to hodl for a long time.

[Potato Chips]

Some of the big centralized exchanges allow transferring crypto currencies including bitcoin to heirs in case of death of the account owner. The problem is that most bitcoiners don't store their coins on exchanges, they store them on their non-custodial wallets meaning that those coins will be lost forever when they passaway.

Very nice nice to know. But as you pointed out, many users don't save their coins on exchanges. But some exchanges are reputable, like Binance. Which means they can be good for holding. Does Binance has this feature?

Anything you're not fully in control of is no good for holding and that's pretty much every centralized exchanges, see https://notyourkeys.org/. You risk of getting your funds locked/sniped by hackers not to mention the slow support which has been a critical disease of every CEXs.

Actually, if you trust your fam you can just outrightly tell them about the inheritance. Tbh, I prefer trusting my fam over some strangers but i guess to each their own...

[o_e_l_e_o]

they store them on their non-custodial wallets meaning that those coins will be lost forever when they passaway.

Only if they are irresponsible enough to not set up some kind of inheritance plan, such as telling family members how to access their coins, or giving family members an encrypted seed phrase with the decryption key stored in their will, or setting up timelocked transactions, or any of the other possibilities.

But some exchanges are reputable, like Binance. Which means they can be good for holding.

Reputable means nothing. Mt Gox were reputable until everyone lost all their money. Coinbase are reputable despite selling users' private info to third parties. Binance are reputable despite being hacked for both coins and KYC data. If you store your coins with any third party, then sure, they can give them to an heir if you die, but they can also steal them, scam you, spend them, give them out as loans, invest them for their own profits at your risk, be hacked for them, lose them, and more.

Back to the initial point - there should absolutely not be any mechanism which allows circumventing private keys to move "lost" bitcoin (even ignoring the fact it is impossible to tell which coins are actually lost or not). In the words of Satoshi:

Lost coins only make everyone else's coins worth slightly more.  Think of it as a donation to everyone.

[Lucius]

Back to the initial point - there should absolutely not be any mechanism which allows circumventing private keys to move "lost" bitcoin (even ignoring the fact it is impossible to tell which coins are actually lost or not). In the words of Satoshi:

Lost coins only make everyone else's coins worth slightly more.  Think of it as a donation to everyone.

Try to explain this to those who do not have the term “donate or donations” in their vocabulary and who are obsessed with the figure of 21 million BTC as max supply. With the current mindset shaping up over the centuries, some find it impossible to accept that there is something like Bitcoin, that everyone has the ability to be their own bank, and that they are responsible for anything that can go wrong if they act irresponsibly.

How many posts have you seen of a novice showing up here and addressing someone as if talking to a bank clerk - "I lost my BTC, please sir give it back to me". Lost BTC are something like a search for lost treasure, and I believe that search will never stop, no matter how impossible the mission may seem.

[DannyHamilton]

Just like the fiat banking system, where monies hardly lost because there is always provision for next of kin who will claim such monies in the case of demise.

You are mistaken.  You are thinking about ACCOUNTS with businesses.  You are NOT thinking about MONEY.

If you have a $100 bill and you light it on fire and burn it...  There is NO provision for you or your next of kin to claim that money.  It is permanently lost.

If a thief comes into your house and finds your wallet and take all the money out of it, you've permanently lost it to the thief. There is no provision for you or your next of kin to claim that money unless you can find the thief and make him give it back to you.

If you invest your money in a business, and that business ends up in bankruptcy, theree is NO provision for you or your next of kin to claim that money.  It is permanently lost.

If you store your money in an insured account with a custodial service (such as a bank account) and you lose your password, then that custodial service can verify your identity (or the identity of your next of kin) and provide access to that account.

BTC should have a similar feature.

Bitcoin HAS a similar feature.  If you permanently lose your bitcoin, it is just like permanently losing your local currency.

If a thief (or hacker) takes your bitcoin, it is just like a thief taking your money.

If you store your bitcoin with a custodial service (such as an exchange), and you lose your password, that exchange can verify your identity (or the identity of your next of kin) and provide access to that account.

[KingsDen]

@DannyHamilton, you have totally changed the narrative  . How come you have turned everything to favour BTC? Nevertheless, your explanations and comparisons are indeed great.

[yhiaali3]

I think it is very difficult to create such a system, the bitcoin in the hands of its owners cannot be known from the lost bitcoin, and forcing platforms to users to prove their identity every few years would be a huge breach of privacy and many users would not like it, also do not forget that there are large amounts of Bitcoin is stored in wallets, not in platforms. In this case, no one is able to access the wallet except for those who own the private keys. In the event of the death of the owner of the wallet, no one will be able to access his wallet unless he gives the private keys to his family.

[Philipruch]

It would be a very nice thing to do, that is talking about a way of getting back the BTC  of those who may have lost their lives, login details or possibly those who are being affected by the error of BTC database, so if that is done and possible, then the fear in the minds of those who are users of BTC and may be affected by its default in terms of accessing there accounts will be removed and it will as make new users of BTC to take full advantage without any fear to invest there assets since there's a way of getting back there asset in case of any of that happens.

[davis196]

If the above does not fit still. Is there a way to recover lost BTC?
Because I see this as a feature fighting against BTC growth, because not all users are educated, not all are technically inclined and not all are good record keepers.
Thank you all.

NO Bitcoin user is educated at the beginning.There's always a learning curve.That's why the newbies have to start familiarizing with Bitcoin by using small amounts of BTC.
The Bitcoin Cove developers aren't obligated to "spoonfeed" every newbie in the BTC world,by "holding his hand" and protecting him from making mistakes,or making mechanisms that reverse BTC transactions,if the Bitcoins were sent to the wrong address.
All Bitcoin users have to take care of their BTC,wallets and private keys.
Making a centralized system for retrieving lost BTC is like making a centralized system to help you retrieve your lost cash,in case you have lost your wallet somewhere in the park.It simply doesn't work.

[Wexnident]

It's not possible, nor I think would it ever actually be made possible in the future. It just defeats the purpose of us having a bank that we have full control of if there was a safety feature that would allow outsiders to access it. Besides, it being inaccessible can also be called a feature, since again, it just proves that it can't be accessed by outsiders or 3rd parties. It wouldn't really hinder its growth imo, Bitcoin can be converted into smaller amounts and doesn't really seem to have a limit to it. THe market would naturally adjust to it sooner or later if said coins were lost forever so I don't really think it's an issue.

[KingsDen]

@o_e_l_e_o Thank you for the insights, more understandable to me. But Satoshi's statement of seeing a lost coin as a donation to someone else got me thinking. Who knows his mood when he made the post. Can you imagine losing your coin(donating to another), then go home crying out blood


@Lucius
"How many posts have you seen of a novice showing up here and addressing someone as if talking to a bank clerk - "I lost my BTC, please sir give it back to me"
I have not seen. Maybe because everyone knows that in this system, your destiny is in your hands.