But still if there is only an ever shrinking supply of coins... It doesnt bode well for the longevity of bitcoins.
How so?
[Spoiler: Here come's the invalid "deflationary spiral" argument.]
Topic: If BitCoins only ever go out of circulations past 21 million (Read 1073 times)
How so?
[Spoiler: Here come's the invalid "deflationary spiral" argument.]
If BitCoins only ever go out of circulations past 21 million, What do we do when all coins are stored in dormant, idle or otherwise inaccessible wallets ?
That would be like dividing by zero.
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Example; Lets say a person has accumulated 10,000 BTC over their lifetime...and then...they die. There computer is formatted and either resold or passed on to a relative. Either way the wallet.dat and the private keys are gone.
Thats 10,000 BTC that will never be circulated again.
It that occurred only 21,000 or so times. That would the whole of BitCoins in circulation would it not ?
Thats 10,000 BTC that will never be circulated again.
It that occurred only 21,000 or so times. That would the whole of BitCoins in circulation would it not ?
The next time it happens, it would not be 10,000 BTC. The loss of 10,000 BTC would decrease the total supply of BTC by 10,000 BTC, so a comparable loss the next time would be 9995.23809524 BTC. The third time, a comparable loss would be 9990.47845805. The cost of anyone actually accumulating and retaining 10,000 BTC drops with each loss, compounding dramatically. By the 100th iteration, a comparable amount is 9539.40398171, and by 1000 iterations, a comparable amount is 6213.70605389.
Dead bitcoins only increase the value of the useable ones
But still if there is only an ever shrinking supply of coins... It doesnt bode well for the longevity of bitcoins.
How so?
[Spoiler: Here come's the invalid "deflationary spiral" argument.]
If BitCoins only ever go out of circulations past 21 million, What do we do when all coins are stored in dormant, idle or otherwise inaccessible wallets ?
Each "active" bitcoin will be worth more. So in 2013 a sack of potatoes may be priced at 1BTC, but if by 2113 half the bitcoins in existence have been "lost" (and all other things being equal, including the amount of worth attached to a potato) it would be priced at 0.5BTC.
Example; Lets say a person has accumulated 10,000 BTC over their lifetime...and then...they die. There computer is formatted and either resold or passed on to a relative. Either way the wallet.dat and the private keys are gone.
Thats 10,000 BTC that will never be circulated again.
It that occurred only 21,000 or so times. That would the whole of BitCoins in circulation would it not ?
Thats 10,000 BTC that will never be circulated again.
It that occurred only 21,000 or so times. That would the whole of BitCoins in circulation would it not ?
Assume the extreme case where all but one satoshi (=0.00000001BTC i believe?) of the 21M BTC have been lost. The world would probably get its act together and change the subdivision limit. So that one satoshi can be subdivided into a trillion subsatoshis and everyone can carry on.
But still if there is only an ever shrinking supply of coins... It doesnt bode well for the longevity of bitcoins.
Don't be silly. Of course it does. You may need to educate yourself a bit on the matter. 
But still if there is only an ever shrinking supply of coins... It doesnt bode well for the longevity of bitcoins.
Lets say a person has accumulated 10,000 BTC over their lifetime...and then...they die. There computer is formatted and either resold or passed on to a relative. Either way the wallet.dat and the private keys are gone.
Thats 10,000 BTC that will never be circulated again.
Thats 10,000 BTC that will never be circulated again.
Someone with $332K USD worth of bitcoins probably should discuss secure storage methods. That person's family will miss those coins. Sad.
It that occurred only 21,000 or so times. That would the whole of BitCoins in circulation would it not ?
Incredibly unlikely, for sure, that there would be 21,000 people each with $332K USD worth of bitcoins and all are completely clueless and careless.
But, for the sake of argument, let's say there are 20,999 people with $332K USD worth of bitcoins who are completely clueless and careless, and just one remaining thinking individual who has proper storage of the 10,000 BTC. These happen to be the last remaining bitcoins that exist since everyone else lost theirs.
Well, guess what. .. a single bitcoin is equal to 100,000,000 Satoshis, so that means there are still 1,000,000,000,000 Satoshis for circulation, or nearly 140 Satoshis per man, woman and child on the planet today.
Now, of course, let's assume the valuation is the same, and that person with 10,000 BTC would be sitting pretty, because at $342 million worth, the BTC/USD of each of the 10,000 BTCs would be worth $34,200. Score!
tl;dr: Lost coins hurts the party that lost the coins. Without those coins the value of the remaining coins will likely increase roughly at the same proportion.
If BitCoins only ever go out of circulations past 21 million, What do we do when all coins are stored in dormant, idle or otherwise inaccessible wallets ?
Example; Lets say a person has accumulated 10,000 BTC over their lifetime...and then...they die. There computer is formatted and either resold or passed on to a relative. Either way the wallet.dat and the private keys are gone.
Thats 10,000 BTC that will never be circulated again.
It that occurred only 21,000 or so times. That would the whole of BitCoins in circulation would it not ?
Example; Lets say a person has accumulated 10,000 BTC over their lifetime...and then...they die. There computer is formatted and either resold or passed on to a relative. Either way the wallet.dat and the private keys are gone.
Thats 10,000 BTC that will never be circulated again.
It that occurred only 21,000 or so times. That would the whole of BitCoins in circulation would it not ?
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