Topic: Bitcoin - A deflationary Currency (Read 249 times)
I think that those Bitcoin coins that were left in cold storage still benefit the cryptocurrency market, because they provoke a shortage of bitcoin in the market and thus make Bitcoin rise in price. In addition, for a user who only stores his Bitcoin and does not carry out any transactions, he is safer than those Bitcoins that constantly run from wallet to the exchange or vice versa.
The number you have for lost bitcoins seem to be quite off the charts, as that number is literally undetermined due to some people sticking true to the term 'cold storage' and not really using their coins for anything. Anyway, you're right with the notion that it takes the term deflationary due to the number gradually decreasing over time, making those remaining in circulation more valuable as more are lost in the process. However in this day and age, I don't think 960 bitcoins on average is a right guesstimate since people are now more careful in setting up their passwords and their wallets, ensuring that they won't lose money and they are secured from hacking and whatnot--although with the exception of those gullible enough to still download things from sketchy sites etc.
There is a law in physics named "The law of entropy increasing". It says that whatever you do, whatever you say, the entropy (the disorder) in this world increases. For example: I sweep in my home with a broom, I make more disorder outside my home when I throw the trash.
This is what happens with the money in the world, no matter what I am doing (deleting the zeros from some paper money, making 100 000 000 whatever money to be 100 new money, etc) the total money in this world increases. With the total money, the prices increase. In my country in the last 10 years, the prices have increased approx 7 times, while the salaries increased 1.5 times.
A deflationary currency is a currency that makes the prices to increase slower than the salaries. That is, a person can afford to go travel to other countries, can feed himself and his family very good, can buy 3 homes, etc. In this understanding bitcoin is a deflationary currency. It allows the earnings (the reward of a person work) to grow faster than the prices.
In physics, the entropy is indeed increasing globally, but under extreme circumstances it's possible to decrease it locally, forming a new kind of order, at the expense of the global increase. And financial inflation can be compared with entropy in a sense that devaluation is like disorder, but I don't think the example holds till the end. Deflation means that the value of money is growing rather than going down. 1 BTC now is less than 1 BTC in a year kind of thing. The prices, however, can get adjusted in various ways. Deflation is widely considered to be a bad thing because it does not encourage people to spend money (why buy something now if I can buy more of it in a week?), but this view supposes that people are behaving rationally when making purchase decisions, which they aren't. This is what happens with the money in the world, no matter what I am doing (deleting the zeros from some paper money, making 100 000 000 whatever money to be 100 new money, etc) the total money in this world increases. With the total money, the prices increase. In my country in the last 10 years, the prices have increased approx 7 times, while the salaries increased 1.5 times.
A deflationary currency is a currency that makes the prices to increase slower than the salaries. That is, a person can afford to go travel to other countries, can feed himself and his family very good, can buy 3 homes, etc. In this understanding bitcoin is a deflationary currency. It allows the earnings (the reward of a person work) to grow faster than the prices.
your numbers about lost bitcoins are way off the reality.
the total lost is nowhere near that number because that number you are quoting is mainly considering any coin that has not been moved for a long time as lost! even i have coins that i haven't touched for 5 years but that doesn't make them lost.
as for daily lost, that is not correct at all. you are missing the fact that the higher the value of bitcoin the less coins are being lost. not just because people have less bitcoin but also because they are more careful about it now compared to early years where they made mistakes and they owned a lot of coins.
the total lost is nowhere near that number because that number you are quoting is mainly considering any coin that has not been moved for a long time as lost! even i have coins that i haven't touched for 5 years but that doesn't make them lost.
as for daily lost, that is not correct at all. you are missing the fact that the higher the value of bitcoin the less coins are being lost. not just because people have less bitcoin but also because they are more careful about it now compared to early years where they made mistakes and they owned a lot of coins.
It is deflationary due to the people losing their bitcoins in computer crash, lost passwords, ...
I think the word deflationary coin came up with Bomb for the first time. And then, as expected, the number of such projects increased.
It may be similar to Bitcoin, but it is impossible to know it completely. We know that a certain number of deflationary coins are constantly decreasing and it is possible to follow. However, we cannot say that the BTCs that are standing still in Bitcoin are irretrievable. Someone may be doing a great term HODL plan.
I think we should stop comparing BTC with other coins. It is uniqe...
It may be similar to Bitcoin, but it is impossible to know it completely. We know that a certain number of deflationary coins are constantly decreasing and it is possible to follow. However, we cannot say that the BTCs that are standing still in Bitcoin are irretrievable. Someone may be doing a great term HODL plan.
I think we should stop comparing BTC with other coins. It is uniqe...
Deflationary made people gain alot of money and people lost as some persons are out to loop money.
I didn't know so many bitcoins were lost. The people who lost them in time are already have more Bitcoin and I don't think they are very upset now for losing their coins.
Using the simple average (mean) the result of the daily Bitcoins lost, from 01/01/2009 until May 2019, is around 960 Bitcoin per day, meaning Bitcoin will become a deflationary currency after the halving, by having more Bitcoin lost than produced per day!
I can't imagine anywhere near 960 bitcoins per day are still being lost. The trend probably resembles a tangential curve where the number of coins being lost is approaching 0.
Plus, we have no idea how many coins have really been lost. Those estimates assume that bitcoins that haven't moved in x years (and whose keys haven't been used to sweep forks) must be lost. That seems unreliable to me.
We should also consider the possibility -- however remote -- that quantum computers will reintroduce some of those lost coins into circulation at some point in the future.
The halving of bitcoin doesn't really mean the bitcoin will be deflamated or some will be lost. This simply mean the number of reward per block will be reduced from 12.5BTC to 6.25BTC next year. This is expected to create some scarcity and price increase.
It is undeniable that there are lots of bitcoin that cannot be retrieved day by day. It is a given fact that soon the amount of bitcoin in circulation will be lesser due to loss coins. But if that will happen the best thing to do is to adjust its value so that even if we have a lesser number of bitcoins . This will mean that in the future the value of bitcoin will be really higher and possibly may reach 1 million dollar each.
There is a law in physics named "The law of entropy increasing". It says that whatever you do, whatever you say, the entropy (the disorder) in this world increases. For example: I sweep in my home with a broom, I make more disorder outside my home when I throw the trash.
This is what happens with the money in the world, no matter what I am doing (deleting the zeros from some paper money, making 100 000 000 whatever money to be 100 new money, etc) the total money in this world increases. With the total money, the prices increase. In my country in the last 10 years, the prices have increased approx 7 times, while the salaries increased 1.5 times.
A deflationary currency is a currency that makes the prices to increase slower than the salaries. That is, a person can afford to go travel to other countries, can feed himself and his family very good, can buy 3 homes, etc. In this understanding bitcoin is a deflationary currency. It allows the earnings (the reward of a person work) to grow faster than the prices.
This is what happens with the money in the world, no matter what I am doing (deleting the zeros from some paper money, making 100 000 000 whatever money to be 100 new money, etc) the total money in this world increases. With the total money, the prices increase. In my country in the last 10 years, the prices have increased approx 7 times, while the salaries increased 1.5 times.
A deflationary currency is a currency that makes the prices to increase slower than the salaries. That is, a person can afford to go travel to other countries, can feed himself and his family very good, can buy 3 homes, etc. In this understanding bitcoin is a deflationary currency. It allows the earnings (the reward of a person work) to grow faster than the prices.
17,851,550 Bitcoin are in circulation right now, with around 4 million Bitcoin reported lost since 2009 and probably irretrievable.
https://coinsutra.com/how-many-bitcoins/
https://www.newsbtc.com/2019/01/10/bitcoin-supply-lost-forever/
https://www.ccn.com/6-million-bitcoin-is-lost-or-stolen-should-the-real-value-of-btc-higher/
Today there are 1800 Bitcoin mined per day.
In May 2020 we will have the "Halvening Event" that will reduce mining rewards by 50%, making the average output of Bitcoin miners at around 900 Bitcoin per day.
Using the simple average (mean) the result of the daily Bitcoins lost, from 01/01/2009 until May 2019, is around 960 Bitcoin per day, meaning Bitcoin will become a deflationary currency after the halving, by having more Bitcoin lost than produced per day!
Although a better indicator would probably be a moving average, as most Bitcoins were lost during the early years, when miners and users couldn't predict how much valuable it would become.
Interesting pages with charts, covering the halving :
https://1in21million.club/
https://www.bitcoinblockhalf.com/
A few incredible and funny stories on lost Bitcoin:
https://coinidol.com/lost-bitcoin-stories/
https://coinsutra.com/how-many-bitcoins/
https://www.newsbtc.com/2019/01/10/bitcoin-supply-lost-forever/
https://www.ccn.com/6-million-bitcoin-is-lost-or-stolen-should-the-real-value-of-btc-higher/
Today there are 1800 Bitcoin mined per day.
In May 2020 we will have the "Halvening Event" that will reduce mining rewards by 50%, making the average output of Bitcoin miners at around 900 Bitcoin per day.
Using the simple average (mean) the result of the daily Bitcoins lost, from 01/01/2009 until May 2019, is around 960 Bitcoin per day, meaning Bitcoin will become a deflationary currency after the halving, by having more Bitcoin lost than produced per day!
Although a better indicator would probably be a moving average, as most Bitcoins were lost during the early years, when miners and users couldn't predict how much valuable it would become.
Interesting pages with charts, covering the halving :
https://1in21million.club/
https://www.bitcoinblockhalf.com/
A few incredible and funny stories on lost Bitcoin:
https://coinidol.com/lost-bitcoin-stories/
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