Does the idea of a lost Bitcoin remaining dormant encourages waste of resources

[Lamtel]

They said learnings never end until we die. Most at times we learn out of passion and curiosity. Yesterday I made a thread asking what will happened to those Bitcoins that the owners have passed away and a lot of replied came, in the replies most people said those Bitcoins are no longer in circulation/use, that they are just being dormant.

Comparing this to our normal Banking system where if such death cases arise, either the next of kin or relatives of the deceased may come with crucial documents to claim the stored wealth. Also in a situation where there is no trace to the deceased next of kin or family members, the bank has a way of disposing/utilizing the wealth in ensuring the wealth not being dormant forever, thereby avoiding waste of monetary assets/resources.

Looking into this two insights, without being judgemental do you think Bitcoin encourages the waste of monetary resources?

Again, do you hope in the future that there would be a way or policy in utilizing those dormant Bitcoins?

[Searing]

Bitcoin being dormant as a store of value is no different then gold jewelry or gold in a vault or ft. knox being dormant.

thus is the fate of 'store of value' not based in fiat (ie $$$) as such.

[Mia Chloe]

~snip

No it's not a wastage of resource rather it's an edge for value and one against inflation. Scarcity is part of the defining factor of value and having dormant coins only means the circulating coins are more scarce which in turn means they will have a higher value depending on how scarce it is.

The financial system broke long ago when banks actually decided to ignore scarcity for their gains which all resulted to over circulation that has been the primary cause of inflation. Bitcoin's defence against this is its limited supply and dormant coins only make it more effective.

[Natalim]

That’s why you really need to understand things first before you invest. The most crucial part is knowing how to secure your Bitcoin so you don’t get hacked, and also how it can be safely passed on to someone you trust. Death is unpredictable, but we all know it will come eventually, so preparing for that matters. Sharing access or setting up a proper way for a trusted person to recover the funds can help.

This isn’t the same as banks. If you’re not comfortable with that kind of responsibility and risk, then of course banks are there to cater to you. But you can’t change what Bitcoin is and how it works, some things are simply non-negotiable.

[krishnaverma]

They said learnings never end until we die. Most at times we learn out of passion and curiosity. Yesterday I made a thread asking what will happened to those Bitcoins that the owners have passed away and a lot of replied came, in the replies most people said those Bitcoins are no longer in circulation/use, that they are just being dormant.

Comparing this to our normal Banking system where if such death cases arise, either the next of kin or relatives of the deceased may come with crucial documents to claim the stored wealth. Also in a situation where there is no trace to the deceased next of kin or family members, the bank has a way of disposing/utilizing the wealth in ensuring the wealth not being dormant forever, thereby avoiding waste of monetary assets/resources.

Looking into this two insights, without being judgemental do you think Bitcoin encourages the waste of monetary resources?

Again, do you hope in the future that there would be a way or policy in utilizing those dormant Bitcoins?

I do not think it will have any major impact. Because, it has always been like this.

Like in banks also there is not of unclaimed money lying. Same way, with mutual fund companies also there is lot of money lying unclaimed.

The reason might be whole family dying in accidents or other unfortunate events.

[pooya87]

do you think Bitcoin encourages the waste of monetary resources?

That's a weird way of putting it.

Bitcoin as a new invention and an entirely different form of money, has different characteristics.
For example in traditional monetary system with the banksters, you have no control over your own money and the banksters control it in your place. Hence what they can do with your money in their hands, and the option for the next of kin to recover their inheritance.

In Bitcoin, you are fully responsible for your own money. You have to control it, store it and think about what happens in case you pass away. If you ignore this responsibility and for example don't plan ahead for your next of kin, then it is not Bitcoin's fault since as I said Bitcoin is designed in a way that you have full control and responsibility.

[Gozie51]

On the contrary, the lost Bitcoin you think has wasted has added more value to the bitcoin ecosystem. If you can't trace a dormant btc to keep circulating it, it then add to the scarcity characteristics of bitcoin by reducing the number in circulation. In other words, the individual who has also lost his access to his bitcoin is as good as the demised person who was not able to leave trace of his bitcoin thereby making an individual lose of himself but not to the bitcoin community. As a Bitcoin hodler, you must ensure a secured means of passing your bitcoin assets to family or anyone you chose to. If you die intestate, it is your lose and not that of bitcoin community. More like a fiat account holder who refuse to include a next of kin to his account form. He might just be doing charity either intentionally or ignorantly.

[Maus0728]

@Searing said it best, lost bitcoins are akin to jewelries and gold that are buried like treasure or stored somewhere. There is also the fact that we are not really sure that they are dormant because people that have these wallets might still have the means to access it and are deliberately choosing to not do anything to it because they know that bitcoin can be much higher than what it is, some people are probably not that driven by greed that a little price pump in bitcoin would lead them to sell their dormant bitcoins immediately. I do hope that no such policy that would mess with dormant bitcoin ever happen in the future, dormant bitcoins contributes to the scarcity of bitcoin and if there are really no way to access them then it is probably for the best that they stay where they are kind of like a permanent piece of art in a museum where everyone can check it from time to time.

[Alpha Marine]

Do you know how much gold sits at the bottom of the Caribbean Sea or the Atlantic as a whole due to loss? Those gold have been lost forever. They've been sitting there long before Bitcoin was even conceived. Even till this day, there are still gold that are still being lost forever. Does this reduce the fact that gold is a store of value? Or does it encourage loss? If your answer is NO, then why should Bitcoin be different?

In my opinion, lost bitcoin encourages people to be more careful with their money. When people know that once the seed phrase is lost, the content of the address cannot be recovered, they will be more careful. More bitcoin was lost in the past compared to today. This is partly because Bitcoin wasn't worth as much as it it worth today, so people were less careful with it. It is also because more people now understand how important it is to keep their seed phrase and addresses well.

[crwth]

Maybe if you look at it differently, it's a lost value in which it gives more value to those who are circulating. I mean, there's nothing we can do about it if it's lost. I know the users have died, and they cannot recover thethat had because they have to see the seed phrase, and no instructions were given.

The people who have BTC should have a dead man's switch or a plan to help their loved ones collect it. For the lost BTC's, there's just no other opportunity.

[Hatchy]

Again, do you hope in the future that there would be a way or policy in utilizing those dormant Bitcoins?

Bitcoin shares some features with traditional money, but if you look closely, it is a completely different and much better monetary system. Originally, governments stopped backing money with physical gold and started printing it endlessly. This decision ruined the system and caused fiat currency to lose its value. Bitcoin is superior because of its scarcity. Even when a Bitcoin is lost, it's not gone or something it just no longer in circulation and remains dormant. it then helps the network by making the remaining supply more valuable.. it's no longer in circulation but still very useful in the bitcoin network...

[rat03gopoh]

Looking into this two insights, without being judgemental do you think Bitcoin encourages the waste of monetary resources?

No, unless you define Bitcoin like a sovereign currency that needs to have its supply reduced and restructured to eliminate inefficiencies.

Again, do you hope in the future that there would be a way or policy in utilizing those dormant Bitcoins?

You're trying to combine two different principles: social utility and absolute ownership (not your keys, not your coins). Suppose if it's inactive after n years, it can be claimed; wouldn't that invalidate the concept of decentralization entirely? No bitcoins are technically lost, and only the key holder can spend them.

[Marvelockg]

Looking into this two insights, without being judgemental do you think Bitcoin encourages the waste of monetary resources?

What's the use of leaving your money in the bank and when you're gone your family can't make use of it? Isn't it a waste just like the case of holding a bitcoin that your love onece can't access because they lack access to your private keys?

As you continue to build your portfolio, one of the thighs you should look out for is that someone should have access to it in the event of your demise. Just like you make provision for your next of kin in the way the banking system works, you should as a matter of neccesity also make provision for who can access your bitcoin holdings if you exit this world because certainly, death is inevitable. If you're with no plan and then dies leaving your coin in a wallet, the fact is that it's all going down that way and there's no use trying to play the victim or looking at the crypto settings as one that's to be blamed. You should know what you're investing in real good.

[ancafe]

Comparing this to our normal Banking system where if such death cases arise, either the next of kin or relatives of the deceased may come with crucial documents to claim the stored wealth. Also in a situation where there is no trace to the deceased next of kin or family members, the bank has a way of disposing/utilizing the wealth in ensuring the wealth not being dormant forever, thereby avoiding waste of monetary assets/resources.

This answer is true because when someone dies and their Bitcoins cannot be recovered because they haven't prepared recovery plans for their heirs, the Bitcoins will cease to circulate completely, leaving the asset in a state of stagnation and unusability. I don't see this as a waste, but rather as an irrecoverable asset that will cease to circulate over time. The loss of these assets won't hinder growth instead, it will create scarcity, which could potentially increase their value in the future, although this isn't the only compelling reason.

The banking system is different because when someone dies, the heirs can submit a death certificate to transfer the money, and in Bitcoin there is no way to recover the assets of a deceased person without the private key, and this is a special concern if we do not want to lose assets when we pass away and should be carefully considered so that the heirs have access.

[OcTradism]

Looking into this two insights, without being judgemental do you think Bitcoin encourages the waste of monetary resources?

Again, do you hope in the future that there would be a way or policy in utilizing those dormant Bitcoins?

There are two possibility with dormant bitcoins.

They were lost, and loss means forever loss. Without private key, mnemonic seed of your Bitcoin wallet, without any wallet file backup, if you lost your original Bitcoin wallets, you lost your bitcoins forever. Your lost bitcoins will be dormant forever.

They were not lost, and they are only dormant bitcoins because owners have not moved those coins in many years. The difference is the owners still have access to their Bitcoin wallets and bitcoins, so they will be able to move their dormant bitcoins anytime.

With dormant and lost bitcoins, we can not do anything even if we want to use them. Without private keys, we can not access those coins just like owners lost their coins.

[SilverCryptoBullet]

That's a weird way of putting it.

Bitcoin as a new invention and an entirely different form of money, has different characteristics.
For example in traditional monetary system with the banksters, you have no control over your own money and the banksters control it in your place. Hence what they can do with your money in their hands, and the option for the next of kin to recover their inheritance.

For banksters, they will have no control of their money stored in banks. They only can log in their bank accounts, see credited numbers virtually on the screen, and in order to use these money, they must have approvals from banks which can be approved or not be approved.

With money stored in banks, governments can freeze and seize the fund anytime, and there is another bad trait of bank, that is traceability of your fund and fund transfers through bank system.

In Bitcoin, you are fully responsible for your own money. You have to control it, store it and think about what happens in case you pass away. If you ignore this responsibility and for example don't plan ahead for your next of kin, then it is not Bitcoin's fault since as I said Bitcoin is designed in a way that you have full control and responsibility.

With Bitcoin, there are many good traits

Have own bank with private keys, but make sure to use open source and non custodial wallets.
No power of governments or banks to freeze your bitcoins, if you store them in your non custodial Bitcoin wallets.
Better privacy if you understand Bitcoin blockchain, wallets, change addresses, UTXOs and practical steps for privacy well enough.

Protecing your Bitcoin privacy.
[Guide] Bitcoin privacy.

[Bastketsrus]

They said learnings never end until we die. Most at times we learn out of passion and curiosity. Yesterday I made a thread asking what will happened to those Bitcoins that the owners have passed away and a lot of replied came, in the replies most people said those Bitcoins are no longer in circulation/use, that they are just being dormant.

Comparing this to our normal Banking system where if such death cases arise, either the next of kin or relatives of the deceased may come with crucial documents to claim the stored wealth. Also in a situation where there is no trace to the deceased next of kin or family members, the bank has a way of disposing/utilizing the wealth in ensuring the wealth not being dormant forever, thereby avoiding waste of monetary assets/resources.

Looking into this two insights, without being judgemental do you think Bitcoin encourages the waste of monetary resources?

Again, do you hope in the future that there would be a way or policy in utilizing those dormant Bitcoins?

Interesting topic. I don’t think Bitcoin encourages waste. It simply gives full control and responsibility to the owner. If someone passes away without sharing keys or planning inheritance, those coins become dormant by choice, not because of a system flaw. That is the trade off for having no central authority. Lost coins also reduce the total supply, so they are not truly wasted, just permanently out of circulation.

[Ruttoshi]

Don't get it twisted, your funds in the bank is been used for business unknown to you through loans that they give out to customers even when you're alive, because that's the way banks use to generate money for themselves. Bitcoin is different entirely, if you're alive as long as you don't move your funds, it remains dormant.

Bitcoin is designed in a decentralized way that only the owner of the private keys can have access to unlock his coins from the blockchain. Dormant bitcoin is part of what made bitcoin price to be at this price because the scarier the coins, the higher the price. Value is what matters and not quantity.