The Lost Coins

[take5]

I've read some discussions about this topic before, but none of them ever really provided a satisfying answer.
About a year ago, I remembered reading about some people misplacing thousands of bitcoins due to some flaw in the software. I guess that doesn't really happen much anymore, but there is still the chance of sending coins to the wrong address or whatnot. But for all of these coins that are just "lost", are they really gone forever or can they be remined? And does that have any real effect on the economy?

[Costia]

lost forever
you need the private key of that address to use the coins
the key is a very long number, it will take you more than the age of humankind to find the one that fits the specific address you are after
you are basically trying to access an address that doesn't belong to you. it doesn't matter if anyone ever owned that address.
*one possible way to find the private key in a sensible amount of time is with a quantum computer that doesn't exist yet

[take5]

What about coins that disappear due to some flaw in the bitcoin software?

[cbeast]

No effect on economy. Bitcoin will survive even if only the last block produced is left because it is infinitely divisible.

[Costia]

What about coins that disappear due to some flaw in the bitcoin software?

no private key -> no coins. doesn't matter what caused it
a flaw in the software can delete the entire chainblock and there will be no bitcoin at all
you need to be a lot more specific

No effect on economy. Bitcoin will survive even if only the last block produced is left because it is infinitely divisible.

that's theoretically. currently i think its up to 8 decimal places

[take5]

No effect on economy. Bitcoin will survive even if only the last block produced is left because it is infinitely divisible.

So you're saying it's possible that the number of bitcoins would never reach the 21 million coin goal?

And by the way I don't really know what I'm talking about, just trying to understand the system a little better. 

[Costia]

there will be 21M (or extremly close to that) existing Bitcoins. but not all of them will be spendable due to lost keys and invalid addresses

[TheHeroMember]

No effect on economy. Bitcoin will survive even if only the last block produced is left because it is infinitely divisible.

Thus the word "infinitely divisible" could also mean "unlimited"?

[fb39ca4]

I like to think of the coins as in limbo, rather than lost or gone.

[TheHeroMember]

When they say some bitcoins are lost, is there a chance that all these coins be all gone? 

[cbeast]

There is talk of a possible modification to bitcoin called demurrage that can bring back lost bitcoins by requiring all bitcoin to be moved within a period of time or become once again returned to the pool of unmined bitcoin blocks.

[Grayswandir]

but there is still the chance of sending coins to the wrong address or whatnot.

From my understanding, you use to be able to send coins straight to a public key¹ (note: not a bitcoin address we all use today). The problem being that if you miss typed the key the coins are effectively lost, for it is near impossible to generate the private key from the public key. This is why the bitcoin addresses used today are in fact a hash of the public key with a checksum, so that miss types can be caught before the coins are sent. This causes each transaction to do the same hash on the public key(provided on the next spending of the coins) to check that the public key matches the address the coins were sent to (you can't go from address to public key, I think....).

But for all of these coins that are just "lost", are they really gone forever or can they be remined?

Cannot be remined. They will be "lost" until someone finds a private key that generates the public key the coins where sent to.

As people have said, only about 21M bitcoins will be mined in total. I assume that if a majority of the miners agree to change the protocol this could be changed, but don't quote me on it. IE instead of dropping down to 25 coins per block mined at the 210,000(?) block mark just continue giving 50 coins. The odds of this happen are rather slim, for one of the founding principles of bitcoin is the fair playing field.  Of which knowing how many coins can be generated from the start is one of the key facts that make bitcoin a fair playing field (instead of having a central bank that can keep printing money indefinably for example).

And does that have any real effect on the economy?

I'm no economist, but if the supply goes down (from lost coins mentioned above) it stands to reason that the value of each coin goes up. By how much I have no idea. Another thing to consider: 50 new coins are minted about every 10 minutes, so currently, any "lost" coins in the supply can be replaced fairly quickly if the number of coins lost isn't a significantly higher magnitude above 50 (for example 1000 coins lost would take about 200 minutes to replace).

There is talk of a possible modification to bitcoin called demurrage that can bring back lost bitcoins by requiring all bitcoin to be moved within a period of time or become once again returned to the pool of unmined bitcoin blocks.

Sounds like a bad idea to me, how do you tell the difference between lost coins and coins in "cold storage" (for example bitcoins used for physical coins). What would prevent people from spending the coins that are thought to be lost after they are "added" back into the unmined pool? This would have the opportunity to increase the supply of coins past the 21M mark which would be bad for the reason given above. But hey, I'm just a noob ^^.

1: This is an assumption based on looking at early translations in the first 200 blocks or so. I only learned about bitcoin a couple months ago.

[Iyeman]

It doesn't matter if they are lost forever, because the price of the current bitcoins will be higher. That's all.

[Mellivora]

No effect on economy. Bitcoin will survive even if only the last block produced is left because it is infinitely divisible.

Thus the word "infinitely divisible" could also mean "unlimited"?

I always thought of Bitcoins as being inflation proof, but "infinitely divisible" makes me have to rethink this.  Its easy to see the deflationary value of the system...but that word "unlimited"...how will that play out?

[BadBear]

21 million is just an arbitrary number, no need to stress over a few in the hole. 

[RodeoX]

I like to think of it as mars dust. Lets say I have the entire 200 gram supply of  mars dust. If i drop a few grams in the ocean, it raises the value of my remaining dust.
There may come a day when people say "You own a whole Bitcoin?" 

[BurtW]

I destroyed a few satoshi just the other day when I sent some BTC to the following public addresses:

Code:

11When1DieBuryMeDeepLayTwoXVEY5jv 
11SpeakersAtMyFeetAPairofXXTyrHor 
11HeadphonesonMyHeadAndXXXXYUSvnd 
11ALwaysPLayTheGratefuLDeadWdq4Xo

Pretty cool eh?

It is the last transaction in this block:

http://blockexplorer.com/block/0000000000000e33f1a48cd77260c0d90cf9aeaac74e85a546c2629da956a2f3

[Costia]

you need the wallet.dat from your netbook
should be in
c:\users\name\AppData\Roaming\Bitcoin
The address is a hash of a public key. the "password" - private key is in that file

[BurtW]

Are the coins still in your tradehill account or did you send them out?

If sent out where did you send them?  Give me the public key address you sent them to.

Next, assuming you sent them to a public key address - where did you get that address?

Do not use either computer for anything until you answer these questions.

[BadBear]

you need the wallet.dat from your netbook
should be in
c:\users\name\AppData\Roaming\Bitcoin
The address is a hash of a public key. the "password" - private key is in that file

This all correct, knowing the receiving address alone doesnt help you, you need the private key which is in that file (wallet.dat). So if you lose your wallet.dat file you lose your bitcoins.  So make sure to keep a couple backups of it from here on out.