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

[maku]

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.

Bitcoin are lost in time and space. That is the truth. If I die right now my bitcoin would be NEVER available for anyone else. I think there are many people like me.

[ebliever]

One of the leading bitcoiners has been quoted as saying that you could run the entire bitcoin ecosystem off of 1 bitcoin, if necessary. Losses of bitcoins are not a big deal (except to the one who lost them!)

This is a good reason to seriously think through how you secure your BTC, by the way. Housefires and city-wide floods and so on are a reality, especially over your lifespan. So if all your backups are in one location or nearby, a catastrophe to your house or your region could result in their loss. Think that through and balance it with the risk of theft to achieve balanced security of your BTC.

[ChuckBuck]

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...

That is a very good point, pedrog!  There already is insurance for Bitcoin in 2015.



BitGo just launched with their insurance model.  I'm sure in 2050, there will be a plethora of options to insure that much coin in the future.

[BitCoinNutJob]

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). 

That would be crazy for anyone/company to have 5 million coins... just saying.  Even now in this tiny market that would be a large amount.

[maku]

I am not so sure that insurance plan is so great. Soon we will have copy of our own corrupt financial system only in virtual world. And I thought that bitcoin was meant as remedy for bloated financial market on our real world...

[ebliever]

I am not so sure that insurance plan is so great. Soon we will have copy of our own corrupt financial system only in virtual world. And I thought that bitcoin was meant as remedy for bloated financial market on our real world...

But no one can force you to insure your bitcoins. It's a free market thing. If people find a given service of value they can use it. If you don't like it you can pass.

[Eastfist]

I think this is possibly an area of the Bitcoin machine that can be looked into: private key recovery/regeneration. Granted, it's going to require some heavy duty computer power, the fabled "quantum" PC, but math is math is math. Bitcoins can't be "lost" because they never existed physically in the first place. Therefore, even if the private keys are lost, the Bitcoins associated with those keys still exist and still contribute to the value of it all.

Bitcoin relies on the logic and truth of math. Start counting from 0 to 21 million. You can't just remove 0 through 10 and start counting from 11 and expect the whole thing to work. You would have to change the rules of math and everyone would have to start counting from 11. Then the whole system breaks.

With Bitcoin, there is no such thing as other's Bitcoin values increasing or decreasing (if some Bitcoins don't move or keys are lost) UNLESS more fiat money enters the ecosystem. The monetary value of Bitcoin is proportional to the fiat that entered or backs its economy.

[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...

That is a very good point, pedrog!  There already is insurance for Bitcoin in 2015.



BitGo just launched with their insurance model.  I'm sure in 2050, there will be a plethora of options to insure that much coin in the future.

Yes, quite a few companies already insured, Elliptic Vault, Coinbase, Xapo, BitGo, pretty sure in 2050 it will be ubiquitous.

[ebliever]

With Bitcoin, there is no such thing as other's Bitcoin values increasing or decreasing (if some Bitcoins don't move or keys are lost) UNLESS more fiat money enters the ecosystem. The monetary value of Bitcoin is proportional to the fiat that entered or backs its economy.

I think I understand what you are trying to say, but it's misleading to tie the value of bitcoin solely to fiat currency. Suppose tomorrow euros, dollars, yen, renminbi and so on all went into hyperinflationary spirals and quickly went to zero value and out of circulation. People flocked to bitcoin and it becomes used to pay salaries and the whole range of financial services. In this case bitcoin would have value, and it would no longer be tied to fiat in any way. The more people transact directly for goods and services with bitcoin, the less its value is tied to fiat.

[Btcvilla]

Bitcoin would just increase in value, the only people at lost are the ones who owned those Bitcoins.

[gadman2]

You know this gets me thinking.

Ok so the original scenario is interesting enough, but here's another twist: Imagine that happens and the company says they lost their bitcoin. So the prices skyrockets and then the coins magically show up and are dumped into the market. Ut oh, the company lied and just ran off with some epic profits.

[Btcvilla]

You know this gets me thinking.

Ok so the original scenario is interesting enough, but here's another twist: Imagine that happens and the company says they lost their bitcoin. So the prices skyrockets and then the coins magically show up and are dumped into the market. Ut oh, the company lied and just ran off with some epic profits.

I would think a repeat of 2008 would happen if they dumped 5 billion coins...

[Hazir]

Bitcoin would just increase in value, the only people at lost are the ones who owned those Bitcoins.

I am not so sure about that anymore. I used to think that way to, that bitcoin will be only more expensive with time. But event of january 2015 when bitcoin dropped more than half of its initial value made me think that it may not be the case. There is always a risk. After all bitcoin is a FIAT.

[ChuckBuck]

Bitcoin would just increase in value, the only people at lost are the ones who owned those Bitcoins.

I am not so sure about that anymore. I used to think that way to, that bitcoin will be only more expensive with time. But event of january 2015 when bitcoin dropped more than half of its initial value made me think that it may not be the case. There is always a risk. After all bitcoin is a FIAT.

I get what you're trying to say, Hazir, but please refrain from using Bitcoin in the same context as Fiat currency.

Fiat by definition is:

Any money declared by a government to be legal tender.
State-issued money which is neither convertible by law to any other thing, nor fixed in value in terms of any objective standard.
Intrinsically valueless money used as money because of government decree.

Bitcoin goes against all these institutions by definition, so it can and will never be Fiat based money.  No one government can control or "print" Bitcoin like the US dollar or Euro, so just trying to help you understand.

But I get what you were going for, deflationary economy yada yada...

[Btcvilla]

Bitcoin would just increase in value, the only people at lost are the ones who owned those Bitcoins.

I am not so sure about that anymore. I used to think that way to, that bitcoin will be only more expensive with time. But event of january 2015 when bitcoin dropped more than half of its initial value made me think that it may not be the case. There is always a risk. After all bitcoin is a FIAT.

But if 5 BILLION are destoryed i'm pretty sure the price would go, supply and demand 101.

[BillyBobZorton]

Just like the idea of gold if it is lost it is lost, the rest is that much rarer.

This, people holding bitcoin would become even richer, thats all.

[cryptworld]

which is logical is that every coin would increase its value so that the market value of bitcoin is the same

[MAsterV]

I think it would be amazing 

Just think suddenly people get interest in bitcoins, more and more joins...

BAM ... international currency... Public Leger...


It's be the best day ever,.... + should have enough bitcoins to say yay let's go..

[M28MmickT]

Just like the idea of gold if it is lost it is lost, the rest is that much rarer.

This, people holding bitcoin would become even richer, thats all.

Richer i hear that a lot on this forum rich this rich that lol You are kind of right it could potentially help the holders gain more paper money for there bitcoins but would not go as far as richer unless you have many coin and it rises a fairly nice amount.

I love god the thing is we cannot lose it unless the nibiru x inhabitants come to pay us a visit (shocked face)

[MegaHustlr]

That will surely result in price increase