Sending coins to trash -- probably the biggest threat to bitcoin

[jaywaka2713]

It's unlikely people lose Bitcoins by sending them to the wrong address. Just because one is lost, doesn't mean a vicious cycle of destruction.

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[wumpus]

We call the current minimum protocol unit the satoshi because it was the first such unit, and we are sentimental creatures.  That unit has no other special features. 

A lot of people hold this current maximum unit of division in special regard. A few people are even calling for using it as default unit for denominating BTC amounts. We should do a better job of informing that 10^8 is just a current implementation detail and not "holy" such as the 21,000,000 limit.

[Stampbit]

Not at all a threat, deleted or lost coins dont really matter, im mean after all we can just all trade in billionths of a coin, just like we all wouldnt mind owning billionths of a cent!~

[Stephen Gornick]

figure out at what point it would make sense to add more decimal places in order to avert an inflationary spiral that will eventually result from lost coins

Did you mean to write deflationary spiral?  Or??

Anyway, adding more decimal places doesn't create more coins.     The same amount of money exists with $1 as does with 100 pennies.

[SgtSpike]

I could see us breaking down Bitcoin 8 more decimal places when we have calculated that only about 10,000 BTC are left in existence.

Thanks for confirming that I have correctly interpreted the second point in SgtSpike's answer. Unfortunately, this now means that I have to go back to the drawing board and figure out at what point it would make sense to add more decimal places in order to avert an inflationary spiral that will eventually result from lost coins (if we ever succeed at building a flourishing BTC-based economy around the bitcoin protocol).

I know that the issues I'm trying to bring to the miners' attention may appear somewhat odd at this point, but please take note of the inferences that I've made throughout this thread, as understanding them would prove essential in a miner's ability to take maximum advantage of the GOLD 2.0 era we're passing through right now. I don't think that it will be years before I can finally share (in layman's terms) what had clicked in my head after I came across one of Gavin's old tweets, back in 2011 (see a hard copy below). It's just I haven't yet found a professional writer (with background in bitcoin and economic theory) to help me put the right words on paper, so to speak. Why would I need a professional writer? Well, as some of you may have already noticed, any attempt that I take to construct a structural argument around BTC money supply (not monetary base units, a.k.a. raw bitcoins) it only seems to take everyone's attention away from the main points of that argument... It appear that I'm just not cut out for explaining intricate things in prose.

So you're saying that converting $1 bills into pennies would also cause the USD to go into an inflationary spiral?

It's not that you're doing a bad job of explaining your arguments, it's that your arguments are bad.

[solex]

Bitconomist,

I have found one of your lunatic rogue miners, and they are using an ASIC!

"So we’re destroying the private key used by our Bitcon wallet. That leaves our growing pile of Bitcoin lucre locked away in a digital vault for all eternity..."

http://www.wired.com/wiredenterprise/2013/05/butterfly_live/

Of course they would never do anything like donate the coins to charity, or feel the slightest pity for all the people with pre-orders who have been waiting a year to get their own machine, only to see commercial samples given away first.

[BTConomist]

Did you mean to write deflationary spiral?  Or??

Why do you and others still assume that when I'm discussing deflation or inflation I refer to BTC exchange rate fluctuations? Remember, I don't speak the GOLD 2.0 dialect... I speak straight up BTC!

Are you interested in learning how to speak proper BTC (will be offering classes soon)? In the meantime, may I suggest that you take maximum advantage of the GOLD 2.0 era exchange rates.

[Zangelbert Bingledack]

Man, you tech guys are extremely patient. How on earth did this question about a basic economic misconception reach 3 pages?

[wumpus]

"So we’re destroying the private key used by our Bitcon wallet. That leaves our growing pile of Bitcoin lucre locked away in a digital vault for all eternity..."

The world’s most popular digital currency really is nothing more than an abstraction.

It's only an abstraction anyway! Stupid abstractions...   Interesting form of nihilism.

[jaywaka2713]

Man, you tech guys are extremely patient. How on earth did this question about a basic economic misconception reach 3 pages?

We discuss our opinions lol. It's valuable discussion.

[bigbeninlondon]

Did you mean to write deflationary spiral?  Or??

Why do you and others still assume that when I'm discussing deflation or inflation I refer to BTC exchange rate fluctuations? Remember, I don't speak the GOLD 2.0 dialect... I speak straight up BTC!

Are you interested in learning how to speak proper BTC (will be offering classes soon)? In the meantime, may I suggest that you take maximum advantage of the GOLD 2.0 era exchange rates.

If we intentionally moved the decimal place every X amount of time, would that not simulate inflation?  Many economists assert that inflation encourages investment.  If we just intentionally destroy 18.9 million coins (leaving us with only 2.1 million), and then immediately slide the decimal place over and rename THAT a bitcoin, all of a sudden everyone holding 1 "bitcoin" now holds 10 "bitcoins".  It's the exact same thing the FED is doing.  $10 dollars now is worth the same as what $1 dollar was worth 100 years ago.  The blockchain would handle it seamlessly because it don't care what the numbers are CALLED, and all clients would just internally shift the decimal.

Basically you could invert the idea of Gold 2.0 and create the same kind of economy the US is based on.

Is this why are obsessed with the validity of the statement that 1 bitcoin could still service the entire world and keep referring to a "vaccine to gold 2.0"?

[BTConomist]

Did you mean to write deflationary spiral?  Or??

Why do you and others still assume that when I'm discussing deflation or inflation I refer to BTC exchange rate fluctuations? Remember, I don't speak the GOLD 2.0 dialect... I speak straight up BTC!

Are you interested in learning how to speak proper BTC (will be offering classes soon)? In the meantime, may I suggest that you take maximum advantage of the GOLD 2.0 era exchange rates.

Basically you could invert the idea of Gold 2.0 and create the same kind of economy the US is based on.

It is precisely that. Thanks for noticing.

But don't just take my word for it.

Is this why you are obsessed with the validity of the statement that 1 bitcoin could still service the entire world and keep referring to a "vaccine to gold 2.0"?

Yes, something like that.

[bigbeninlondon]

Did you mean to write deflationary spiral?  Or??

Why do you and others still assume that when I'm discussing deflation or inflation I refer to BTC exchange rate fluctuations? Remember, I don't speak the GOLD 2.0 dialect... I speak straight up BTC!

Are you interested in learning how to speak proper BTC (will be offering classes soon)? In the meantime, may I suggest that you take maximum advantage of the GOLD 2.0 era exchange rates.

Basically you could invert the idea of Gold 2.0 and create the same kind of economy the US is based on.

It is precisely that. Thanks for noticing.

But don't just take my word for it.

Is this why you are obsessed with the validity of the statement that 1 bitcoin could still service the entire world and keep referring to a "vaccine to gold 2.0"?

Yes, something like that.

How do you get all miners to agree to this?  How do you prevent miners from secretly retaining a key they "destroyed" in order to retain large volumes of wealth?

Also, why is it so bad that bitcoin acts like a "Gold 2.0"?  The world needs something like gold that does't require physical storage and can be easily transported worldwide.  Why would you want to destroy that?

[BTConomist]

How do you get all miners to agree to this?  How do you prevent miners from secretly retaining a key they "destroyed" in order to retain large volumes of wealth?

With a poison pill, if need be.  But let's hope it doesn't have to come to that... While gradual changes benefit the majority, an abrupt one would only benefit my ego and the pockets of those who had prepared for the change.

Also, why is it so bad that bitcoin acts like a "Gold 2.0"?  The world needs something like gold that does't require physical storage and can be easily transported worldwide.  Why would you want to destroy that?

It's not the qualities of gold that's the problem, it is the pervasive treatment of those qualities as gold. Speculation is healthy for the bitcoin economy, but only if it is based on the expectations about future "economic" growth, and not on the proliferation of GOLD 2.0 worshiping.

[bigbeninlondon]

With a poison pill, if need be.  But let's hope it doesn't have to come to that... While gradual changes benefit the majority, an abrupt one would only benefit my ego and the pockets of those who had prepared for the change.

What is this "poison pill"? 

It's not the qualities of gold that's the problem, it is the pervasive treatment of those qualities as gold. Speculation is healthy for the bitcoin economy, but only if it is based on the expectations about future "economic" growth, and not on the proliferation of GOLD 2.0 worshiping.

But a storage of value is valuable.  Speculation that a store of value will gain value should be expected.  Why demonize it?

[BTConomist]

With a poison pill, if need be.  But let's hope it doesn't have to come to that... While gradual changes benefit the majority, an abrupt one would only benefit my ego and the pockets of those who had prepared for the change.

What is this "poison pill"?

Just to clarify, the poison pill is not designed to destroy the bitcoin use as a viable currency, it will merely target the bitcoin use as a GOLD 2.0 speculative asset. But to answer your question, for me to discuss any of its details now will introduce an abrupt change. Remember, I stand behind the gradual change approach... Let's just wait for the vaccine to work it's magic, shall we?

It's not the qualities of gold that's the problem, it is the pervasive treatment of those qualities as gold. Speculation is healthy for the bitcoin economy, but only if it is based on the expectations about future "economic" growth, and not on the proliferation of GOLD 2.0 worshiping.

But a storage of value is valuable.  Speculation that a store of value will gain value should be expected.  Why demonize it?

I do not demonize the bitcoin's store of value function... only the widespread GOLD 2.0 phenomenon.

[bigbeninlondon]

Just to clarify, the poison pill is not designed to destroy the bitcoin use as a viable currency, it will merely target the bitcoin use as a GOLD 2.0 speculative asset. But to answer your question, for me to discuss any of its details now will introduce an abrupt change. Remember, I stand behind the gradual change approach... Let's just wait for the vaccine to work it's magic, shall we?

Hmmm... How about a hint then? 

I do not demonize the bitcoin's store of value function... only the widespread GOLD 2.0 phenomenon.

Can you explain the difference?  To me the main driving factor of "Gold 2.0" phenomenon is bitcoins store of value function.  That's the only real similarity to gold that I see, and (at least to me) apparently the only reason people keep referring to bitcoins as "Gold 2.0".

[BTConomist]

Just to clarify, the poison pill is not designed to destroy the bitcoin use as a viable currency, it will merely target the bitcoin use as a GOLD 2.0 speculative asset. But to answer your question, for me to discuss any of its details now will introduce an abrupt change. Remember, I stand behind the gradual change approach... Let's just wait for the vaccine to work it's magic, shall we?

Hmmm... How about a hint then?

You are a miner, right? Spend some BTC to come and visit me in Chicago... Perhaps for a local Bitcoin Meetup that's coming up on June 4th... We can chat privately then.

I do not demonize the bitcoin's store of value function... only the widespread GOLD 2.0 phenomenon.

Can you explain the difference? To me the main driving factor of "Gold 2.0" phenomenon is bitcoins store of value function.  That's the only real similarity to gold that I see, and (at least to me) apparently the only reason people keep referring to bitcoins as "Gold 2.0".

Sure, but in a face-to-face conversation only... There's already a sizable bid wall on Mt.Gox... Don't want for it to crumble, yet.