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Topic: Deflation, Doomsday and the return of Lost Coins - page 2. (Read 3076 times)

sr. member
Activity: 382
Merit: 253
I do think there's a benefit though: not being able to know how much currency is in circulation isn't a good thing when you're relying on the rest of it to raise in value.  There's no need to return the coins to circulation, but voiding them after some time has advantages - it would let you know how large the money supply is, and it would allow old blockchain history to be dropped completely after the coins expire.  (The current pruning scheme often can't remove old blocks when some outputs are still unspent.)

The only reason anyone cares about how much is out there is because they are trying to manipulate the economy. The free market doesn't need to know the total amount of currency, and neither do the individual participants. They only need to know how much stuff they can trade the money they're holding for.

Its the politicians that care about things like M2 because it gives them a big knob they can turn to "fix" the economy. The big open secret is that for politicians, doing something - even if it is actually the wrong thing - is better for their career than doing nothing - even when that's exactly what they should do.
hero member
Activity: 728
Merit: 500
165YUuQUWhBz3d27iXKxRiazQnjEtJNG9g
1.You can't tell
2. and the decimals are unlimited

So why return ?

OK, I'll play devil's advocate.  Smiley

1 can be solved by making people roll it over to a new set of coins every few years.  2 is true and it's why there's no coming 'doomsday'.  I do think there's a benefit though: not being able to know how much currency is in circulation isn't a good thing when you're relying on the rest of it to raise in value.  There's no need to return the coins to circulation, but voiding them after some time has advantages - it would let you know how large the money supply is, and it would allow old blockchain history to be dropped completely after the coins expire.  (The current pruning scheme often can't remove old blocks when some outputs are still unspent.)

This change shouldn't be done in Bitcoin since it would revoke the existing system where coins are good for long term storage.  Who knows how many are on paper in safe deposit boxes with no way to contact the holders to let them know they have to do something to keep them?  But it's an interesting idea for an alt coin.
hero member
Activity: 555
Merit: 654
Never again I shall propose such a bad idea. I swear.

full member
Activity: 197
Merit: 100
Its a terrible idea and completely unnecessary. The value in lost coins, is already incorporated in the remaining coins, which become more valuable.

Deflation benefits all bitcoin users.
legendary
Activity: 1652
Merit: 2301
Chief Scientist
I think this is The Idea That Will Not Die.

Bottom line: ain't gonna happen, everybody who created or purchased bitcoin over the last three years did so with the expectation the they would last forever, not that they would have some arbitrary 5-year expiration date.
hero member
Activity: 714
Merit: 500
1.You can't tell
2. and the decimals are unlimited

So why return ?
legendary
Activity: 1937
Merit: 1001
I just watched the last part of that video again and it's really bad, he just wipes the floor with bitcoin with dumbed down conclusions that COULD be true but don't have to be. Also his not trusting the bank but trusting anon is weird... man o man... that's not what bitcoin is about, i'm not sure what this guy has been smoking... (sorry for the chaotic rant-ish comment)
hero member
Activity: 555
Merit: 654
You have a "simple" and elegant system that is Bitcoin, why would anyone want to add all the kinds of stupid rules to it?

There are tons of rules in Bitcoin, just take a look at the source code: each line is in fact a rule. The only difference is that there are rules that are backwards compatible and others that are not.


legendary
Activity: 1937
Merit: 1001
Yea, horrible idea, maybe RealSolid is up for it Smiley
hero member
Activity: 812
Merit: 1001
-
What is it with some people? Control freaks all around us just don't give up. You have a "simple" and elegant system that is Bitcoin, why would anyone want to add all the kinds of stupid rules to it? What is it with this endless desire to turn a simple and elegant system into a bloated monster?

Feel free to fork Bitcoin and add any kind of BS rules to it, then let the fittest survive. It is good that such proposals have no chance to be implemented in Bitcoin itself.

On the second thought, float this idea to Solid Coin N.0 crowd, they may just go for it.


BTW. Today is "Star Wars Day", May the 4th be with you.

legendary
Activity: 1246
Merit: 1016
Strength in numbers
Taking people's coins is not the same as taking coins that no one controls. Since you can't tell the difference just let it be.
legendary
Activity: 1400
Merit: 1005
1)  A 5 year interval DOES hurt long term savings.  What if I put 100 BTC on a piece of paper, forget about it for 6 years because it's stored in my attic, and then they're all gone?  A lifetime interval MIGHT be acceptable, but....
2)  What's the point?  The coins are infinitely divisible, so even if there's only 1 satoshi left, Bitcoin can still be used.

Now, if you're worried more about deflation and less about actual coins lost, then a much better solution is to just let the 50 BTC block rewards continue on indefinitely.  Eventually, the coins generated would equal the coins lost, and the amount of currency in circulation would be completely stable - no inflation or deflation.

If the concern is keeping exactly 21M coins in circulation, then use a combination of both:  Generate new coins for coins that haven't been transferred in 5 years.  The old coins are still available to the original owner, but if they were truly lost, then they won't detract from the 21M coins in circulation for longer than 5 years.  If they are eventually used again, then slightly more than 21M coins would be in circulation, but that could be made up for by not creating new coins for the next batch of 5-year-old coins that would have otherwise been regenerated.
hero member
Activity: 555
Merit: 654
Some time ago I watched the video "28c3: Bitcoin - An Analysis" by Hamacher, & Katzenbeisse that, among other things, suggests Bitcoin is "doomed to vanish" because of the number of lost coins per year. (see http://www.youtube.com/watch?v=hlWyTqL1hFA).

Lost coins are inaccessible unspent transactions because scriptPubKey is invalid or because the owner of the related private key lost the key.

The video proposal is to give back the lost coins to the community. There is a a simple way to do it: every year (at a certain point, using the block number as index) all coins that were not transferred for the last 5 years are returned to a miners prize pool. The prize pool is divided in equally sized shares and for that year each block mined has an additional price of one share.

With this scheme, every user who owns bitcoins and want to keep them should, every 5 years, transfer the money to another of his addresses.

A 5 year interval does not hurt people using Bitcoins for lifetime savings, and gives enough time to those people to be notified of the change in the protocol.

What do you think?

Regards, Sergio.

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