Topic: Does loss of BTC affects total amount of BTC in total supply. - page 2. (Read 438 times)

Yes, obviously there will be an effect, but I think the effect will be positive, and it will be beneficial for Bitcoiners.
Now let me tell you how it will be, the total supply of Bitcoin is only 21M and
The circulating supply is about 19M, Although all bitcoins in lost wallets are currently included in the circulating supply, there will be a time when they will be included in the total supply after 21m bitcoins are mined, and then from the total supply, these bitcoins will be like burning or decreasing supply and there will be a positive effect on the price.
To say this, I would say that those who have lost their wallet private keys are benefiting other bitcoiners by holding bitcoins for life.

You did justice to the question and I also agree with you that the only thing affected is the circulating supply of Bitcoin and not the total total supply because the coin irrespective of how much worth of coin was lost, is still very present on the blockchain an to the best of my knowledge, Bitcoins can't be burnt again hence it doesn't have any effect on the total supply.

Better still tell the newbie to always do their own research as that will be more informative and still gradually get him or her into the forum.

This question was asked in the early days, and fortunately satoshi himself answered it:



So, the lost coins are a donation that makes the rest of the coins more valuable, just as a single bitcoin can be divided into 100,000,000 SAT, and therefore there is enough satoshi for every human being in the universe.

Yea, the law of Economics works also on Bitcoin. 
According to Satoshi, "All lost coins are considered a donation for the betterment of other holders." 
The higher the demand for a limited supply, the higher the price will be. 
If we happen to wake up one day and all 21 million are mined, then inside the entire 21 million, 5–10 million are lost in forgotten wallets. Other holders will rejoice because of the price increase the reduced circulation will cause. 

Alright thanks for the clarification on the above question. @Nwada001.


In economics we are told following the law of demands and supply accordingly with the invisible hands of the market that when demands surpasses supply their will be increase in price. So if I may ask again, does this mean that the continuous loss of BTC in wallets which results to reduction in BTC circulation can lead to increments in the price of bitcoin or it doesn't work that way with bitcoin???

It's dope to see you're curious about Bitcoin, and I'm stoked to drop some knowledge on you. About your question, it's true that some peeps have lost their BTC wallets, and that can be hella frustrating. But losing wallets doesn't have any effect on the total supply of BTC. The supply of Bitcoin is predetermined and fixed, and losing wallets only reduces the circulating supply. Make sure to stash your seed phrase in a safe place and be cautious about security measures to dodge such losses.

 Bitcoin is a real game-changer of a technology, and you gotta know how to use it and keep it safe. By stashing your seed phrase in a secure spot and taking the right precautions, you can avoid any major losses. And remember, the price of Bitcoin can change in the blink of an eye, so make sure you're keeping an eye on the market and investing your money smartly.

There are 2 points to pay attention to when looking for an answer to your question:

1. If we start from the law of supply and demand, then the reduction of bitcoin in general circulation should cause an increase in the value of it. People have lost and will continue to lose access to their btc. At the moment, not 1 millionBTC have been lost and in fact, the total number of btc will be less than the claimed 21 mln.

2. On the other hand, technologies are developing and I admit the possibility that in the distant future (or not so) the power of computers (for example, quantum ones) will allow hacking (brute forcing) lost wallets. That will make it possible to get closer to the limit of 21 mln. bitcoins, as it was intended by the creator.

Probably, the events described in paragraph 1 will occur first, and then, in paragraph 2. But as I believe, with each new halving it will be more and more difficult to get btc, which means that it will be more reluctant to part with.

How do you understand the total supply? There are a lot of holders whose bitcoins are stored on their wallets and practically don't participate in the general turnover. You remember the recent story, when bitcoins moved from the old wallet only 10 years later. Many people can do the same. What I'm saying is that out of the 21 mln.BTC available now, some are lost forever (or not so forever) and some may just be on hold until the best price becomes available. As a result, it turns out that in the available offer there are not so many bitcoin that can be bought at the moment.

It doesn't affect the total supply of Bitcoin because its supply is fix however the total amount of BTC that can be use to buy, sell, trade and also when you send BTC from your wallet 1 to your main wallet won't be the same since the BTC that people lost cannot be recovered unless it is now possible to brute force a the file of your wallet so that you can get the private key of the wallet. If you didn't get what I meant or confused with my explanation then let's put it this way, Total supply of BTC 21 million and the BTC that are accessible is 20 million which means the rest BTC in total of 2 million cannot be used by anyone at all. Anyway, it's just and example since I don't know the exact amount of BTC that are already lost.

Not at the moment, but reversing a public key to a private key could certainly be possible far enough in the future with quantum computers. If such an event occurred, then the several million coins in early P2PK outputs as well as any coins in outputs with a revealed public key (which includes all addresses which have previously spent bitcoin) could potentially have their private keys reverse engineered and therefore re-enter circulation, unless the community consensus is to fork to somehow lock all these coins.

Just because coins have not moved in a long time, or even if someone claims they have lost the private keys/seed phrase/wallet/whatever, it is wrong to assume those coins are permanently lost and can't be recovered.

We can prove that the number of provably lost bitcoin is 2,828.654 BTC, and this number can be safely removed from both the total and the circulating supplies. Anything which is not provably lost should not be considered removed from the supply.

Lost bitcoins won't be recovered without access to lost private keys. It's impossible as from Private key to Public key then public address is one-way. You can not revert the process from Public address to Public key then Private key.

Total supply is 21M bitcoins.

Only circulating supply can be changed with new mined bitcoins and lost bitcoins. However, you won't be able to know how many bitcoins were lost.

It would definitely cause a decline or a reduction in the number of bitcoins in circulation. It doesn't reduce the number of bitcoin generally, just the amount in circulation.
Fortunately, this also wouldn't negatively affect the prices of the bitcoin in circulation. As the demand increases and combined with a limited supply, the price of bitcoin is bound to go only one direction. All the way up.

Bitcoin total supply is 20,999,999.9769 BTC and it will never change although we're unlikely see it since we will know it in 2140.

The circulation supply will be affected, it should be encourage Bitcoin price to increase because it will make Bitcoin more scarcer, but demand is playing major role to influence Bitcoin price.

The loss of Bitcoin from someone's wallet won't affect the total supply. The total supply of Bitcoin will remain 21 million, It is the limit set at the launch of Bitcoin and noting can change that supply.

The bitcoins that are lost were part of the circulating supply, the circulating supply will be reduced with those lost coins. Even if 2 million Bitcoins are lost from circulating supply the total supply won't be affected.

 

To burn your bitcoin, you can send them to OP_return outputs. Such outputs are not added to the UTXO set at all and are provably burned.
As I said in my previous post, miners can also burn coins with not claiming the block reward when they find a block.

The lost BTC will have an effect on the number of BTC in supply since it will reduce the amount in circulation when everyone finally gets to know about bitcoin and want to get some. There is 21 million in supply, but that amount will not be available to everyone when bitcoin finally gets accepted and adopted because of how many out of that supply has been lost due to loss of wallet seed. There will still be enough bitcoin to go round, but it will affect the number the available to everyone.

When an individual is loosing bitcoin, it's technically a personal loss but not a loss to the blockchain. Technically the bitcoins are still available in the blockchain. So it can't be a change to the total supply. The total supply affects when someone burns coin from the chain. A lot of tokens have this functionality. But as of now, bitcoin is out of it.

So loosing bitcoin doesn't affect the total bitcoin supply. But yes, those bitcoins won't get circulated in the market. That's another way of looking at it.

Bitcoin has a limited maximum supply and a constantly changing circulating supply, and any potential loss of someone's funds which involves the corresponding loss of private keys can be considered as a decrease in available supply, but the maximum supply of Bitcoin stays nearly the same. In order to decrease the total supply, coins need to be "burned" or destroyed in a provable way, which means it will be impossible to restore such coins even by finding private keys. There are many approaches to destroying coins in a provable way, but it is a rare occurrence that this happens naturally due to mistakes. Most often than not, people who want to burn their coins know what they are doing: they destroy their coins on purpose to achieve some goal that they see as more important thing than valuable coins.

Cannot give any effect if we talk about prices changes since the balance will just sleep with no transaction will happen. But if there's movement like dumping it especially if this is a huge balance then maybe a short time dump of the price will happen.

But it can lessen up the supply and we don't know yet what will be the real effect on it especially if many people will want more bitcoin and supply is to low. Maybe we can see price goes up then it will be expensive for other people to acquire some amount of it.

Bitcoin total maximum supply 21M
Circulating supply 19.34M
If a wallet containing bitcoins is permanently lost or a wallet's private key/seed phase is destroyed or lost then the maximum supply will not change or have any effect but the total circulating supply will be affected and the lost bitcoins will be reduced from the circulating supply.
If Bitcoin wallets are lost and disappear and cross the circulating supply, the total supply of Bitcoin at some point will be greatly affected and the price of Bitcoin in the market will be greatly affected.

Lost bitcoins add a slight value to the everyone’s coins because once a coin is stagnant for a long period of time in a particular wallet the market treats it as a those that have been removed from circulation and then the market price is calculated accordingly with the lower supply.

Here is what satoshi had to say about them