Topic: A proposed solution to adjust for lost Bitcoins: wallet 'heartbeats' - page 6. (Read 12206 times)

It's really annoying to have someone say that I assume something, when I have clearly stated the opposite. You only undermine your own reputation, and undermine it further by claiming the importance of tenure. And you wonder why I don't care how long someone has been around. Content matters. Don't hide behind tenure. I would accord equal respect to any member based upon what they are saying, not how long they have been around.

Not when people like you come in and start talking about divisibility. Read the thread. It has been stated numerous times that divisibility has nothing to do with it.

You assume that bitcoin has a problem with availability or granularity. Both is horribly false in the forseeable long term future.
The price of a bitcoin unit of a certain deciaml within the p2p accounting system is set via supply and demand and zero via regulation, which is a key selling point of bitcoin.
You are trying to add an automated regulation mechanism to solve a problem that doesnt exist, a very uncompelling case.



You have been around for a week, maybe some humility would help?

Oh, I see now! I'm not a mathematician, therefore, I can't grasp the concept fully. First of all, it does not need to become zero for the problem to exist. Secondly, the key point is "approach zero". I shall now use the same intonation as your post above: I realize this is tricky for you to grasp, therefore, I suggest that instead of trying to sideline the argument into whether the supply will reach zero or some quantity that is not exactly zero, which is a wrong assumption on your part anyway, that you reconsider the real premise put forth in this thread, and find a means to object to it, instead.  That is, if it's not too tricky for you.

You could have symbolic links between addresses and unix-like permissions.

As long as the symbolic link exists the BTC would be transferable remotely from address to address without the original wallet. Bye bye lost coins.
Unix permissions would also prevent the theft that occurred at MtGox by allowing you to block transactions not authorized by you. You would pre-generate transactions which would be filled in by MtGox. That is you would control MtGox from the client. MtGox would not be able to create transactions without your wallet being online and sending requests.

Problem, criminal?

I think I'll work on this. After JSON is fully the format of the system. At this point I can't navigate the code like others can.
Unix permissions: Receive, Send, Operate

No, this is not logical. This is an error in your thinking. Just because something becomes less and less, doesn't mean it will eventually become zero. This is a little tricky to grasp for the non-mathematician, but is nevertheless true and important.

Bzzzzt. You fail to factor in the value of a bitcoin. As the value increases, the rate at which they are lost will decrease, as people will take additional measures to secure them. If R_L approaches 0, L will approach some value less than M.

how about some service that does the heartbeating for you? someone might still find the login info to that on grandpas old laptop...

I never stated that a constant or near constant number of Bitcoins would be lost per year or per unit time. What I said was this:

M = total number of Bitcoins ever minted
C = total number of Bitcoins not lost
L = total number of Bitcoins truly lost
t = time

Per any unit of time you wish to use, L at t + 1 will be >= L at t.

Logically, then, L will get bigger over time. From that, it follows L will eventually approach M.

Let's assume that you agree that a certain percentage of unlost Bitcoins will be lost every year. Is that not an unreasonable assumption? No matter what number you choose, if you continue with the following calculation, the end result is the same:

C at t = M
C at t + 1 = (C at t) * x where x = some constant number less than 1.

Hey guys, I have an idea!

You should collaborate on a new block chain using these rules. I seriously doubt you're going to convince enough people that this belongs in Bitcoin, but you can start a competing crypto currency with whatever changes you want. Bitcoin is open source, go build something!

I agree with you that it is a weakness of the system that there are no ways to distinguish whether a coin is loss or simply hoarded. From the economic view, it may raise concern of sudden discovery of the old wallet in the future. However, your solution is not good and it is too complex to be accepted into the current protocol.

My proposal: Unmoved Bitcoin with age more than, say, 40 years are marked as lost and cannot be used for further transaction.

Imposing a time limit has many advantage over the supposed infinite time model:
1. All cryptography keys in use today need to update periodically, for security reason. Leaving the same public key in block for a long time will simply increase the risk of being hacked. So moving the Bitcoin into a new wallet could secure their Bitcoin.
2. It allows the network drop old blocks.
3. This proposal can be implemented very easily with few lines.
4. The proposal implies that value of the lost Bitcoin will be automatically go to all others wallet.
5. It allows the differentiation between lost Bitcoin and hoarded Bitcoin to reduce uncertainty.
6. They should know that Bitcoin can be lost so that they wont put everything into Bitcoin.

There is no such need to reclaim the lost Bitcoin or allow for new mining. Otherwise, if there is 100000 Bitcoin lost for 40 years, you just give the miner with the ability to manipulate the market which make no difference with someone who discovers it. Also, the time interval is should not be too short, say, 1 year. It will only create an instability for the Bitcoin economy. For example, you might want to destroy others wallet in order to maximize your own profit.

Using the proposal, everyone else is actually gaining a very tiny value of their own Bitcoin and it is the most fair method to handle lost of Bitcoin. Remember that the creation of Bitcoin out of nothing is simply a way to make an initial distribution of Bitcoin, there is no need to mining in a sustainable system anymore in the future. I know someone do not like to see that the decimal in their account is smaller and smaller over year. But it is just a game of number, you should really divided by the maximum number of Bitcoin.

If 99% of bitcoin is marked as lost, we can simply multiply 100 to the balance in the bitcoin client. 

Cryptographic weaknesses can be also seen as an argument FOR coin expiry.

Bitcoin protocol is flexible enough to allow transactions with different levels of security: you can use different hashes, require multiple signatures etc.

Even now two different kinds of transactions exist: ones with explicit public key and ones with public key hash.
First is resilent to hash collision attacks, while second, perhaps, makes attack harder because you first need to figure out public key.

So, if you refresh your money by sending it to yourself from time to time then it helps to keep it fresh and secure as transaction might use more secure protection available in new version of client. Even if algorithm is the same refreshing could help if somebody was working to find public key hash collision for years, for example: they will have to restart their work from scratch.

Some people here say that market forces will force people to refresh their coins and if they don't then coins might be eventually reclaimed by code crackers.

But they forget that not everybody is a cryptographer so they cannot carefully assess risks. Even if there is a recommendation to refresh coins from time to time they might choose to ignore it.

If, however, coins expire after a certain time (say, five years) then they WILL have to plan for it and reconnect their wallets periodically.

And this also solves security woes (e.g. if some old algo can be cracked with ease, what will we do with old outputs which use it -- let code crackers to get obscene number of coins OR block them forever OR block & redistribute to miners? It is much better when it is known beforehand).

And it also nicely solves size of block chain problem (it doesn't grow forever as old blocks can be simply dropped), it solves deflation problem making money supply more predictable and it gives additional awards to miners which might help to reduce transaction fees. (If there are no awards they might charge obscene high fees.)

And it only causes problem for people who want to keep their wallets offline for decades.

Well, keeping them offline is not the brightest idea:

 * crypto algorithms do not provide 100% unbreakability guarantee, they merely make sure that attacker needs to spend a lot of computation resources. But if you leave challenge for decades, with a good incentive to break it, and given advancements in crypto-analysis it becomes possible that attacker will have enough resources.
 * To get your money back you need software which still understands your wallet but can use new network. It is very well possible that it won't be available.
 * Storage media are not designed with that much durability in mind. CD-R and similar things rot in few years unless you buy expensive archive-grade ones, which might be rated for 25 years of storage. But nobody will guarantee that it will actually last for 25 years. Flash drives are not designed with durability in mind. Neither are hard drives. People cope with this by refreshing their archives from time to time, but if you refresh archive, can't you also refresh coins?

So absence of coin expiry only helps people who follow bad security and archival practices.

No, they are not. That is why I showed you the geometric series, which is an infinite series of positive values that add up to a constant, even if you keep adding FOREVER.

Saying that more and more bitcoins get lost does NOT mean that the number or ratio of bitcoins still in circulation goes towards zero! Not at all. That is the point. It might mean that, but in all probability it does not mean that. If fact, as I have pointed out above, the yearly ratio of bitcoins lost is bound to converge toward zero very fast, which implies that the number of bitcoins still in circulation will remain above a large constant, say 10 million, FOREVER. That is why your problem will never be a problem.

I started writing this post thinking that I agree with ascent but couldn't articulate the agreement.

Then I imagined the world where a car costs 0.00000001BTC. Then I imagined a news report that 10 BTC has been discovered by someone finding an old wallet.dat on grandpa's old computer. What would a discovery like that mean when all the bitcoins have been minted and the market has adjusted to the limited supply (including the lost coins)? Most likely that would result in inflation. As the supply of bitcoins increases, the prices will rise. We'll be where we are now with USD and other currencies. As coins get lost the system will have to adjust because there will be not enough coins to go around. As coins get more expensive, the hoarders will release them into the system, thus stabilising the price.

What ascent seems to object to the most is the fact that nobody knows how much currency is available. Everyone knows that there's no more than 21M, but no exact numbers. Supposedly, this leads people to be uncertain about the currency. As long as the algorithm is strong and new money cannot appear from nowhere, there's no uncertainty. Just because you know that I have 1K BTC, doesn't mean you can be certain how I will use it to take advantage of the market. When the story unfolds in such a way that earning 0.01 BTC per year is enough for you, the fact that I gained 10BTC will have no radical immediate effect on you. I'll just be able to employ 1000 of you which would keep you feeling happy. There will not be an overall uncertainty, just like not everyone thinks that there will be a war tomorrow.

When 10BTC is enough to employ 1000 people for a year, I believe I will take all the necessary steps to make sure I, or my descendants, do not lose the funds. Any coins lost today, will have such a big bounty on them in the far future, that it may be the biggest driver of innovation in cryptography with an aim to recover lost/inactive coins. Inactive wallets that are not kept up-to-date with technology will be more easy to compromise and the BTC will enter the circulation again.

I know there are wallets being lost today and I'm not uncertain about BTC. I think BTC is still good.

I think you are very, very wrong about the bolded part.  You know my opinion of the unstable comment, so I won't bother repeating it.

Because we finally have a system where what is mine will always remain mine (even after I die) unless I fuck it up myself.

I'll answer your question. I don't hold Zimbabwe currency or currencies like it. On the other hand, some currencies are rather stable, and are fine for holding for periods of time. Bitcoins, while volatile, are an interesting investment, and there's a strong chance they will rise significantly. But in the end, they will become unstable.

Given a choice, I would much prefer to hold a version of Bitcoins that requires a heartbeat, for the reasons clearly stated above. I would have zero fears of losing it.

Why the preference?

Do you know about every fiat currency ever tried over the last 4 thousand years or so?

The point is:  what do you do if it was today and, due to the public's general fear that 10 trillion or 100 trillion dollars could be dumped on the market over the next year or two, people, in general, when receiving payment in it, immediately cash it out for something else, driving its value down even further?

To answer your questions, I would not "put my wealth" in it, not for your reasons, but because I never do that; I know the difference between money and wealth, it involves using one to buy the other, but I'll let you sort out the details on your own.  And yes,  I would still be pretty confident, for reasons already explained, by me and several other people, in several unique and colorful ways, all of which you have ignored.  And finally, no, I still prefer a system that is capable of neither destroying nor redistributing bitcoins.

Perhaps in the year 3535, people will rue the day we rejected your idea, but I'll leave that to them.

I know all about Zimbabwe's currency. That's not the point.

The point is: what would you do if it was the far future and the apparent circulation of Bitcoins is about 1,000, and as a result, due to the public's general fear that 10,000 or even 100,000 Bitcoins could be dumped on the market tomorrow, people, in general, when receiving payment in it, immediately cash it out for something else, driving its value down even further? Would you place much of your wealth in it? Would you be so confident that nothing might happen tomorrow?

Or, would you prefer a version of Bitcoins that mandates heartbeats, thus ensuring the above situation could never occur for all time?