Lost Coins and Wallet Expiration Solution

[Photon939]

I've had several thoughts about this subject before and my searches have found a thread or two that briefly touch on the subject.

As most people know, lost coins from computer crashes, accidental erasure, file corruption, etc are a problem that cause coins to be permanently lost from circulation. Most responses to this I've seen on the forum simply say something to the effect of "this just makes the rest of the coins more valuable" which while probably true does not solve the problem.

As Bitcoin transactions gain velocity over time, the amount of coins lost will also inevitably increase. How many coins need to be lost before this becomes a serious problem?

I've thought it is just a much simpler solution to give Bitcoin wallets an "expiration date" of sorts. You must make a transaction using each of your wallets every year (or some other arbitrary value) to keep your wallet "renewed" so you keep your coins. If a wallet is lost, no transactions are made and the wallet "expires", "invalidating" those coins in the block chain and adding them back to the mining reward.

Keeps the coin supply constant at 21M and negates the problem of lost coins falling out of circulation.

I'm interested in hearing others' thoughts on this idea.

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[beckspace]

It's not a problem therefore does not need a solution.

On a side note: Mandela spent 20+ years in prison.

[matthewh3]

There is not 21Million coins there is 2,100,000,000,000,000 and if extra decimals need adding even more.

[symbols]

I've thought about the same problem. I don't like the coins going back into mining rewards however, and I also don't like penalizing people who are ultra-security conscious and store their wallets offline with the need to log in once a period and shuffle their coins around.

However, the idea of a default future transaction is a good one, as follows: Imagine I can sign a 'transaction' that says essentially that another wallet can spend my coins after a certain date. Now, I can 'opt-in' to a system where I sign my coins to a 'back-up' service effective one year from now if I haven't spent them. Per our contractual agreement, if I lose my keys for whatever reason, they will sign my coins over to a new wallet once the time limit expires and they have access. This allows me to never give them access to my coins as long as I have my key, because before the period is over, I can send my coins to a new wallet and make a future-transaction from that wallet.

Obviously the period would be customizable, and there's trust being placed in the backup service, but its a way of distributing loss-risk around, and if you only 'banked' with local people, I'm sure local contract law would give you good recourse in case of theft.

-s

[Photon939]

I've thought about the same problem. I don't like the coins going back into mining rewards however, and I also don't like penalizing people who are ultra-security conscious and store their wallets offline with the need to log in once a period and shuffle their coins around.

However, the idea of a default future transaction is a good one, as follows: Imagine I can sign a 'transaction' that says essentially that another wallet can spend my coins after a certain date. Now, I can 'opt-in' to a system where I sign my coins to a 'back-up' service effective one year from now if I haven't spent them. Per our contractual agreement, if I lose my keys for whatever reason, they will sign my coins over to a new wallet once the time limit expires and they have access. This allows me to never give them access to my coins as long as I have my key, because before the period is over, I can send my coins to a new wallet and make a future-transaction from that wallet.

Obviously the period would be customizable, and there's trust being placed in the backup service, but its a way of distributing loss-risk around, and if you only 'banked' with local people, I'm sure local contract law would give you good recourse in case of theft.

-s

Thanks for putting thought towards this idea. This is exactly the kind of thing I was looking for - it's a better solution than the wallet expiration idea. A way to create a future transaction that would allow you to empty the wallet in event of losing access to the keys.

I just like the idea of a self-contained system that recycles all coins, instead of a system that constantly hemorrhages coins and has divisibility tacked on to add more supply.

[DeathAndTaxes]

There will never be 21 million coins to begin with so devising a solution to "make sure" we keep all 21 million coins doesn't make much sense does it.

Hint: there will never be more than 20,999,999.9769 Bitcoins (exactly 2,099,999,997,690,000 satoshis) without a breaking fork in the protocol.
  
Bonus points if you can figure out why.

[rjk]

Divisibility adds supply? It reduces it..

Also, how do you prove that a coin is lost? What if some early investor comes back to find that his coins have been invalidated?

[Inaba]

Bonus points if you can figure out why.

Ya can't get halfway to somewhere forever.

[Fuzzy]

Right now, there is no solution that will both recover any coins lost up until this point, while protecting the bitcoins that were put into long term storage on purpose and haven't been touched since.

I'd also say that most of the lost coins were those mined in the first 2 years or so, before the value reached parity with the USD. I'm guessing many people didn't worry too much about their wallets back then.

[Unacceptable]

How about a repository for wallet.dat files,where you upload your dat,it gets encrypted in some way & maybe secure it by the BTC network in some way.

It can be supervised by several,say 6 or more trusted individuals,that have no way to access the dats individually.

You login,answer some secret questions (or something to that effect) & there's your dat,safe & secure

Just a thought  

[DeathAndTaxes]

How about a repository for wallet.dat files,where you upload your dat,it gets encrypted in some way & maybe secure it by the BTC network in some way.

It can be supervised by several,say 6 or more trusted individuals,that have no way to access the dats individually.

You login,answer some secret questions (or something to that effect) & there's your dat,safe & secure

Just a thought  

That can be done today and doesn't require any change to the protocol.  That being said I won't be using it.  "Trusted people" sometimes become "untrusted people".    An AES-256 encrypted copy of my wallets are stored on my google drive with a 10,000 key keypool".  I feel confident in both the backup and the security.

Still if people want to use "key escrows" or wallet backup providers that is certainly their option.  I am against making anything like that part of the protocol though.

[Gabi]

I've thought it is just a much simpler solution to give Bitcoin wallets an "expiration date" of sorts. You must make a transaction using each of your wallets every year (or some other arbitrary value) to keep your wallet "renewed" so you keep your coins. If a wallet is lost, no transactions are made and the wallet "expires", "invalidating" those coins in the block chain and adding them back to the mining reward

NO

Go elsewhere to try to steal other people saving.

Just NO.

However, the idea of a default future transaction is a good one, as follows: Imagine I can sign a 'transaction' that says essentially that another wallet can spend my coins after a certain date. Now, I can 'opt-in' to a system where I sign my coins to a 'back-up' service effective one year from now if I haven't spent them. Per our contractual agreement, if I lose my keys for whatever reason, they will sign my coins over to a new wallet once the time limit expires and they have access. This allows me to never give them access to my coins as long as I have my key, because before the period is over, I can send my coins to a new wallet and make a future-transaction from that wallet.

Obviously the period would be customizable, and there's trust being placed in the backup service, but its a way of distributing loss-risk around, and if you only 'banked' with local people, I'm sure local contract law would give you good recourse in case of theft.

NO

[Unacceptable]

How about a repository for wallet.dat files,where you upload your dat,it gets encrypted in some way & maybe secure it by the BTC network in some way.

It can be supervised by several,say 6 or more trusted individuals,that have no way to access the dats individually.

You login,answer some secret questions (or something to that effect) & there's your dat,safe & secure

Just a thought 

That can be done today and doesn't require any change to the protocol.

That being said I won't be using it.  "Trusted people sometimes become untrusted people".

An encrypted copy of my wallets is stored on google drive.

I hear ya  

Not something I need either

I have 4 flash drives stashed at home with my dats on them.Good luck finding them

[Photon939]

I've thought it is just a much simpler solution to give Bitcoin wallets an "expiration date" of sorts. You must make a transaction using each of your wallets every year (or some other arbitrary value) to keep your wallet "renewed" so you keep your coins. If a wallet is lost, no transactions are made and the wallet "expires", "invalidating" those coins in the block chain and adding them back to the mining reward

NO

Go elsewhere to try to steal other people saving.

Just NO.

However, the idea of a default future transaction is a good one, as follows: Imagine I can sign a 'transaction' that says essentially that another wallet can spend my coins after a certain date. Now, I can 'opt-in' to a system where I sign my coins to a 'back-up' service effective one year from now if I haven't spent them. Per our contractual agreement, if I lose my keys for whatever reason, they will sign my coins over to a new wallet once the time limit expires and they have access. This allows me to never give them access to my coins as long as I have my key, because before the period is over, I can send my coins to a new wallet and make a future-transaction from that wallet.

Obviously the period would be customizable, and there's trust being placed in the backup service, but its a way of distributing loss-risk around, and if you only 'banked' with local people, I'm sure local contract law would give you good recourse in case of theft.

NO

You have any actual reasoning other than just saying "NO" and pointlessly stomping around?

The whole point of this is that the current solution is not elegant and self-regulating like the rest of bitcoin. My idea is just an example with arbitrary values. And it doesn't have to be a transaction made from the wallet either, but say send one bitcent or smaller fraction to all of your accounts every few years or so. That way the block chain knows these wallets are still active. This means those with offline paper wallets don't need to dig anything up, they just need to have a copy of the public addresses for all of their offline wallets.


And to those yelling crap about 21 million, it was a rounded figure. Going to four significant digits serves no purpose for this discussion.

Divisibility adds supply? It reduces it..

Also, how do you prove that a coin is lost? What if some early investor comes back to find that his coins have been invalidated?

Right, I meant adding supply of transferable units not the total coin supply.

He's not a very good investor if he doesn't keep tabs on his investments now is he? Besides, if something this big were actually implemented announcements can be sent to the clients like has been done with the recently found vulnerabilities.

[Stephen Gornick]

The whole point of this is that the current solution is not elegant and self-regulating like the rest of bitcoin.

A decreasing supply (due to lost or destroyed coins) should be of trivial importance to Bitcoin.

Price = intersection of Demand and Supply

A lower supply can be offset with a higher price.

Is this higher pirce what you fear will be the "serious problem"?  If so, why?

[waspoza]

It's not a problem therefore does not need a solution.

QFT

[DeathAndTaxes]

He's not a very good investor if he doesn't keep tabs on his investments now is he? Besides, if something this big were actually implemented announcements can be sent to the clients like has been done with the recently found vulnerabilities.

So your have the right to seize wealth that doesn't belong to you simply because you feel the investor isn't "wise".  People have found gold coins or stock certs in attics after relatives have passed away that are decades old. 

No protocol change has ever rendered a private key invalid.  You could have a wallet created from a 1.0 wallet and export the private keys import them into a new wallet and they would work.

Bitcoin is irreversible.  Your suggestion (to solve a problem which doesn't exist) would make Bitcoin reversible.