It's year 2050 and Bitcoin is the world currency...

[Jakesy]

For hypothetical purposes, let's say there are 20million Bitcoins in circulation (it's less than that I know). 

A company that has possession of 5 million coins has terrible private key management.  Their building burns down, along with it, all of their private keys and backups (again, they were stupid). 

I know this scenario is a stretch - but what happens in the future if all of a sudden a serious percentage of Bitcoins are unspendable (and all at once)? 

Will we as a society decide to "replace" these coins and put more back into circulation?  Or ride the deflation wave?  Everybody's coins become more valuable?  Even if everybody depends on the value?

[ChuckBuck]

From the Bitcoin Wiki:

https://en.bitcoin.it/wiki/FAQ#But_if_no_more_coins_are_generated.2C_what_happens_when_Bitcoins_are_lost.3F_Won.27t_that_be_a_problem.3F

But if no more coins are generated, what happens when Bitcoins are lost? Won't that be a problem?
Because of the law of supply and demand, when fewer bitcoins are available the ones that are left will be in higher demand, and therefore will have a higher value. So, as Bitcoins are lost, the remaining bitcoins will eventually increase in value to compensate. As the value of a bitcoin increases, the number of bitcoins required to purchase an item decreases. This is a deflationary economic model. As the average transaction size reduces, transactions will probably be denominated in sub-units of a bitcoin such as millibitcoins ("Millies") or microbitcoins ("Mikes").

The Bitcoin protocol uses a base unit of one hundred-millionth of a Bitcoin ("a Satoshi"), but unused bits are available in the protocol fields that could be used to denote even smaller subdivisions.

That should answer your question.

[ajareselde]

For hypothetical purposes, let's say there are 20million Bitcoins in circulation (it's less than that I know). 

A company that has possession of 5 million coins has terrible private key management.  Their building burns down, along with it, all of their private keys and backups (again, they were stupid). 

I know this scenario is a stretch - but what happens in the future if all of a sudden a serious percentage of Bitcoins are unspendable (and all at once)? 

Will we as a society decide to "replace" these coins and put more back into circulation?  Or ride the deflation wave?  Everybody's coins become more valuable?  Even if everybody depends on the value?

Its an interesting question, but i personaly think that the coins would be replaced if the coins were to be proven indees as unrecoverable.
But ure right when you say that the scenario as a stretch, because theres no way on earth that someone would have 25% world's coins and risk loosing them in such a stupid way.
Even tho bitcoin now has no instrument of handling these scenarios, i believe that there will be some sort of oversight that would react in cases of such events.

cheers

[Realpra]

You would need a hard fork to replace coins in a scenario like that. You would have to define that those coins cannot be spent by the original keys and that a different private key can now move them.

I don't see that happening, the coins would be gone.

To me its a feature; stupid people loosing coins means fewer stupid people deciding what the economy should do! In reality nothing REAL is lost - we would still have the same amount of cars, oranges and houses as before the event.

[nextgencoin]

Statistically at some point all the bitcoins/bits will be lost. 

[nextgencoin]

I personally believe all economies should really be deflationary. I mean the effort or cost to make a car should be decreasing generally over time as companies become more an more efficient/better at making the 'same' product. Sadly we have been feed the lie for the last hundred years that inflation is the norm. Bitcoin returns us to a defaltionary cycle. The only products that's should increase in price should be scarce resources or products using scarce resources.


Ps. Don't believe the bullshit that we are feed that deflation leads to people putting off purchases, with gas being a bit cheaper for most of us in the last 6 months did anyone buy less gas for their cars? In fact I personally probably bought more.

[runpaint]

Statistically at some point all the bitcoins/bits will be lost. 

[nextgencoin]

Statistically at some point all the bitcoins/bits will be lost. 

So there will be a time in history that not one bit will be lost? Sure it will take many many years but it will happen at some point.

[Inotanewbie]

For hypothetical purposes, let's say there are 20million Bitcoins in circulation (it's less than that I know). 

A company that has possession of 5 million coins has terrible private key management.  Their building burns down, along with it, all of their private keys and backups (again, they were stupid). 

I know this scenario is a stretch - but what happens in the future if all of a sudden a serious percentage of Bitcoins are unspendable (and all at once)? 

Will we as a society decide to "replace" these coins and put more back into circulation?  Or ride the deflation wave?  Everybody's coins become more valuable?  Even if everybody depends on the value?

Its an interesting question, but i personaly think that the coins would be replaced if the coins were to be proven indees as unrecoverable.
But ure right when you say that the scenario as a stretch, because theres no way on earth that someone would have 25% world's coins and risk loosing them in such a stupid way.
Even tho bitcoin now has no instrument of handling these scenarios, i believe that there will be some sort of oversight that would react in cases of such events.

cheers

This is  an interesting question, would the coins actually be replaced if so how would they do that on such a massive scale assuming of course that it was possible to have that many coins in the first place?

Does this mean they can be replaced to the average joe who loses them?

Damn if they lost them like that they deserve to never get a single coin back, i back up my back ups and i do not have anywhere near that amount hehe.

Thanks

[mlferro]

Statistically at some point all the bitcoins/bits will be lost. 

So there will be a time in history that not one bit will be lost? Sure it will take many many years but it will happen at some point.

If this come to pass, coins being lost, as will be Bitcoin?

[slaveforanunnak1]

From the Bitcoin Wiki:

https://en.bitcoin.it/wiki/FAQ#But_if_no_more_coins_are_generated.2C_what_happens_when_Bitcoins_are_lost.3F_Won.27t_that_be_a_problem.3F

But if no more coins are generated, what happens when Bitcoins are lost? Won't that be a problem?
Because of the law of supply and demand, when fewer bitcoins are available the ones that are left will be in higher demand, and therefore will have a higher value. So, as Bitcoins are lost, the remaining bitcoins will eventually increase in value to compensate. As the value of a bitcoin increases, the number of bitcoins required to purchase an item decreases. This is a deflationary economic model. As the average transaction size reduces, transactions will probably be denominated in sub-units of a bitcoin such as millibitcoins ("Millies") or microbitcoins ("Mikes").

The Bitcoin protocol uses a base unit of one hundred-millionth of a Bitcoin ("a Satoshi"), but unused bits are available in the protocol fields that could be used to denote even smaller subdivisions.

That should answer your question.

What if coins are lost for some reason and we (general population) is not aware of the loss. Lets say it was an uber rich family and for some reason they lost 80% of their coins due to stupidity and they didn't tell anyone for fear of xyz.

[CrackedLogic]

From the Bitcoin Wiki:

https://en.bitcoin.it/wiki/FAQ#But_if_no_more_coins_are_generated.2C_what_happens_when_Bitcoins_are_lost.3F_Won.27t_that_be_a_problem.3F

But if no more coins are generated, what happens when Bitcoins are lost? Won't that be a problem?
Because of the law of supply and demand, when fewer bitcoins are available the ones that are left will be in higher demand, and therefore will have a higher value. So, as Bitcoins are lost, the remaining bitcoins will eventually increase in value to compensate. As the value of a bitcoin increases, the number of bitcoins required to purchase an item decreases. This is a deflationary economic model. As the average transaction size reduces, transactions will probably be denominated in sub-units of a bitcoin such as millibitcoins ("Millies") or microbitcoins ("Mikes").

The Bitcoin protocol uses a base unit of one hundred-millionth of a Bitcoin ("a Satoshi"), but unused bits are available in the protocol fields that could be used to denote even smaller subdivisions.

That should answer your question.

What if coins are lost for some reason and we (general population) is not aware of the loss. Lets say it was an uber rich family and for some reason they lost 80% of their coins due to stupidity and they didn't tell anyone for fear of xyz.

It will be noticed in due time. The 5milBTC wouldn't move. I'm sure somebody will find it and just sit and watch it.

[koelen3]

From the Bitcoin Wiki:

https://en.bitcoin.it/wiki/FAQ#But_if_no_more_coins_are_generated.2C_what_happens_when_Bitcoins_are_lost.3F_Won.27t_that_be_a_problem.3F

But if no more coins are generated, what happens when Bitcoins are lost? Won't that be a problem?
Because of the law of supply and demand, when fewer bitcoins are available the ones that are left will be in higher demand, and therefore will have a higher value. So, as Bitcoins are lost, the remaining bitcoins will eventually increase in value to compensate. As the value of a bitcoin increases, the number of bitcoins required to purchase an item decreases. This is a deflationary economic model. As the average transaction size reduces, transactions will probably be denominated in sub-units of a bitcoin such as millibitcoins ("Millies") or microbitcoins ("Mikes").

The Bitcoin protocol uses a base unit of one hundred-millionth of a Bitcoin ("a Satoshi"), but unused bits are available in the protocol fields that could be used to denote even smaller subdivisions.

That should answer your question.

What if coins are lost for some reason and we (general population) is not aware of the loss. Lets say it was an uber rich family and for some reason they lost 80% of their coins due to stupidity and they didn't tell anyone for fear of xyz.

It will be noticed in due time. The 5milBTC wouldn't move. I'm sure somebody will find it and just sit and watch it.

It's not about fear , We can always see the blockchain address and people are desperate , if someone have that many bitcoin in single address or multiple and they won't move for a month or over , people will start noticing eventually and the price will keep rising.
Though if we think of it ! that will be 25% of the coins that will be destroyed , so price can go much much higher.

Will we as a society decide to "replace" these coins and put more back into circulation? 

That's not possible to replace these coins , you cannot just put more in the blockchain , that will be a fake blockchain and no one will mine on it , so they just become less available and price increases

[Beliathon]

I know this scenario is a stretch - but what happens in the future if all of a sudden a serious percentage of Bitcoins are unspendable (and all at once)?  

The remaining coins gain value proportionately as they have suddenly become more scarce. By 2020 the companies established around bitcoin will be both wealthy and secure.

[runpaint]

Statistically at some point all the bitcoins/bits will be lost. 

So there will be a time in history that not one bit will be lost? Sure it will take many many years but it will happen at some point.

So you're saying there will be a time in history when not one person will backup their private keys?

You're looking at some bitcoins being lost over time, which you think will eventually add up to all bitcoins.  But that would require 100% of all Bitcoin users to lose 100% of their coins. 

[Jakesy]

From the Bitcoin Wiki:

https://en.bitcoin.it/wiki/FAQ#But_if_no_more_coins_are_generated.2C_what_happens_when_Bitcoins_are_lost.3F_Won.27t_that_be_a_problem.3F

But if no more coins are generated, what happens when Bitcoins are lost? Won't that be a problem?
Because of the law of supply and demand, when fewer bitcoins are available the ones that are left will be in higher demand, and therefore will have a higher value. So, as Bitcoins are lost, the remaining bitcoins will eventually increase in value to compensate. As the value of a bitcoin increases, the number of bitcoins required to purchase an item decreases. This is a deflationary economic model. As the average transaction size reduces, transactions will probably be denominated in sub-units of a bitcoin such as millibitcoins ("Millies") or microbitcoins ("Mikes").

The Bitcoin protocol uses a base unit of one hundred-millionth of a Bitcoin ("a Satoshi"), but unused bits are available in the protocol fields that could be used to denote even smaller subdivisions.

That should answer your question.

I get this and I'm TOTALLY in favor of it.  However, a scenario where a large percentage is lost all at once - would that not disrupt the economy?  All of a sudden product prices should move down because the Bitcoins are worth more.

I get over time the value will compensate - but what about all at once?  What if we're stupid enough to trust a 3rd party to hold coins (for whatever reason) and then they vanish all at once.  What happens to the economy in a situation like this?

[ChuckBuck]

From the Bitcoin Wiki:

https://en.bitcoin.it/wiki/FAQ#But_if_no_more_coins_are_generated.2C_what_happens_when_Bitcoins_are_lost.3F_Won.27t_that_be_a_problem.3F

But if no more coins are generated, what happens when Bitcoins are lost? Won't that be a problem?
Because of the law of supply and demand, when fewer bitcoins are available the ones that are left will be in higher demand, and therefore will have a higher value. So, as Bitcoins are lost, the remaining bitcoins will eventually increase in value to compensate. As the value of a bitcoin increases, the number of bitcoins required to purchase an item decreases. This is a deflationary economic model. As the average transaction size reduces, transactions will probably be denominated in sub-units of a bitcoin such as millibitcoins ("Millies") or microbitcoins ("Mikes").

The Bitcoin protocol uses a base unit of one hundred-millionth of a Bitcoin ("a Satoshi"), but unused bits are available in the protocol fields that could be used to denote even smaller subdivisions.

That should answer your question.

I get this and I'm TOTALLY in favor of it.  However, a scenario where a large percentage is lost all at once - would that not disrupt the economy?  All of a sudden product prices should move down because the Bitcoins are worth more.

I get over time the value will compensate - but what about all at once?  What if we're stupid enough to trust a 3rd party to hold coins (for whatever reason) and then they vanish all at once.  What happens to the economy in a situation like this?

Lost is lost, my brother.  Whether lost due to operator error, negligence, incompetence, etc...if it's out of circulation and can't be retrieved, it'll be considered "lost".

If it's lost, see the answer again in blue above.

[vm_mpn]

For hypothetical purposes, let's say there are 20million Bitcoins in circulation (it's less than that I know). 

A company that has possession of 5 million coins has terrible private key management.  Their building burns down, along with it, all of their private keys and backups (again, they were stupid). 

I know this scenario is a stretch - but what happens in the future if all of a sudden a serious percentage of Bitcoins are unspendable (and all at once)? 

Will we as a society decide to "replace" these coins and put more back into circulation?  Or ride the deflation wave?  Everybody's coins become more valuable?  Even if everybody depends on the value?

This hypothetical entity in possession of 5 million coins will either be Coinbase or Fort Knox I recon. I worry about Fort Knox for some reason.

[slaveforanunnak1]

From the Bitcoin Wiki:

https://en.bitcoin.it/wiki/FAQ#But_if_no_more_coins_are_generated.2C_what_happens_when_Bitcoins_are_lost.3F_Won.27t_that_be_a_problem.3F

But if no more coins are generated, what happens when Bitcoins are lost? Won't that be a problem?
Because of the law of supply and demand, when fewer bitcoins are available the ones that are left will be in higher demand, and therefore will have a higher value. So, as Bitcoins are lost, the remaining bitcoins will eventually increase in value to compensate. As the value of a bitcoin increases, the number of bitcoins required to purchase an item decreases. This is a deflationary economic model. As the average transaction size reduces, transactions will probably be denominated in sub-units of a bitcoin such as millibitcoins ("Millies") or microbitcoins ("Mikes").

The Bitcoin protocol uses a base unit of one hundred-millionth of a Bitcoin ("a Satoshi"), but unused bits are available in the protocol fields that could be used to denote even smaller subdivisions.

That should answer your question.

What if coins are lost for some reason and we (general population) is not aware of the loss. Lets say it was an uber rich family and for some reason they lost 80% of their coins due to stupidity and they didn't tell anyone for fear of xyz.

It will be noticed in due time. The 5milBTC wouldn't move. I'm sure somebody will find it and just sit and watch it.

Um, what's due time? well, if BTC ends up being a store of value type of thing, then stagnant coins don't really mean "lost" coin.
Rich people just park their money, they don't move it all the time.  we can't just assume it's lost just because it hasn't moved.

[pedrog]

A company with so much coins must be insured, people get the fiat value for their lost coins and everybody else bitcoins become more valuable...