Topic: Is losing bitcoin in account have a significant impact to the bitcoin economy? (Read 331 times)

A lot of people underestimate the potential of Bitcoin back in the early days and I am also one of them. However, losing Bitcoin forever will be painful to the people who it happens through their carelessness or underestimation of BTC.
No matter somehow small or big the portion of Bitcoin which are lost forever is, it will automatically impact the Bitcoin economy since the price of the market is based on the level of demand and supply.

 

It has a huge impact on the economy of bitcoin. The more the supply decreases, the more the price of bitcoin increases. Why does bitcoin go up after every halving? The reason for this is, the demand remains the same/or increases but the supply decreases due to the low reward of the miners.

See the table below for a better understanding.

Supply	|	Demand	|	Price	|
_________________	|	_________________	|	_________________	|
Remains Unchanged	|	Increases	|	Increases	|
Remains Unchanged	|	Decreases	|	Decreases	|
Increases	|	Remains Unchanged	|	Decreases	|
Decreases	|	Remains Unchanged	|	Increases	|

The law of supply and demand

Not only that. Coins sent as P2PK outputs have their public keys revealed, meaning that if ECDLP gets broken, which is likely to happen within the next decades with the rise of quantum computing, those coins are likely to return to circulation as well. That's true for every address that has revealed its public key too.

It's also worth mentioning that it's less probable to have such coin loss now more. The risks of messing up with a wallet software in 2009 were far more than they are now.

Let's think something very positive, specifically about the price and economy of bitcoin. I'm not sure it will be very significant, but each bitcoin that is lost will make other bitcoin rarer which will then make the remaining bitcoin more expensive. Of course it must be due to the demand factor, but can't conclude that it won't go down because of the volatility.

Of course, something now said to be lost specifically about bitcoin could come back into circulation if its owner one day remembers his password or regains access to his wallet. I agree with you.

Depends on the amount. Losing a few satoshis isn't going to have a tangible difference, but taking 10,000 bitcoins off the supply is going to have some, given that 10,000 is about 0.05% of the entire bitcoin economy.

Note that probably lost coins, such as those in P2PK outputs, or in lost passwords, might come into circulation in the future. We shouldn't consider them gone for good.

Yes, it does, every single bitcoin lost has a positive impact on the price of bitcoin, since it also contributes positively to the scarcity of bitcoin , and the scarcer the asset when demand is high, the higher the value.

Take for instance , the two stories you shared above, just imagine that somebody somewhere right now decided to dump $220 million worth of bitcoins, do you think after the sale, the price of bitcoin will still maintain it current value? it must have a negative impact on the price, now, another way to check this out is to minus $220 million from bitcoin's current market capitalization and tell us if the figure remaining is not significantly lower than the figure initially.

So indeed every 1 bitcoin lost have a significant impact on the bitcoin economy positively, you might want to say but 1 bitcoin is very small ..check this out, when you place a bucket at a spot where water is dropping, after a while, maybe 1 hour, 3 hours, 10 hours or maybe even a day, what happens ? the bucket is filled to the brim just by small drops falling into it constantly.. so it is with lost bitcoin, every 1`2 bitcoin lost contributes in its own little way, to make bitcoin scarcer, which in turn and in the right time, increases the value of each bitcoin.

Here is a takeaway -- If 21 million persons hold 1 bitcoin each and they all lose access to their wallet forever, it means the total supply of bitcoin is lost forever.

~fivestar4ever

Recently? Well, that's a story that's been known for at least 5 years, when a company applied the methodology of expressing lost BTC in such a way that they said that everything that hasn't moved in 4 or 5 years is lost, and that's more than a stupid way to conclude something.


When such a thing happens to an ordinary person, I am not too surprised, but someone who is supposed to be a software developer should not ignore the importance of a backup. It's shameful and humiliating, and I would keep such a thing a secret so as not to damage my reputation - but he wasn't even that intelligent.

As for Howells, it is about 7500 BTC (allegedly), the private keys of which were on a hard drive that was thrown away by his partner and not by him personally.


It has a positive effect, because those coins that remain will be worth even more in the future - Satoshi himself had such an opinion. Although some think that 21 million is insufficient max supply, I do not agree with that considering that even today there is enough BTC for anyone who wants to buy it - millions are on the market every day.

It is only an estimation and the real figure of lost bitcoins would be either bigger or smaller than that. Everyone can use HODL waves chart and given information, then use different thresholds of when those bitcoins were moved last time.

There are two sites to get hodl waves as I know

• https://www.lookintobitcoin.com/charts/hodl-waves/
• https://hodlwave.com/. This one is my favorite because you can hover the computer mouse to get 2 information (when and related percent) but it was last updated around March 2020.

The Bitcoinomics will be changed because of lost bitcoins but it has a unpredictable positive effects on Bitcoin holders in future. Because the lost bitcoins are similar to burning those bitcoins forever.

It is worth pointing out that demand affects price a lot more than the supply in case of a cryptocurrency.
It is pretty easily to compare too. No matter how many bitcoins you think are lost, there is always a lot of altcoins that have a lower supply than the remaining bitcoins. Yet those altcoins are always worth a lot less than bitcoin because of a simple reason: lack of demand. Considering the lack of utilities they provide, there is no real demand for them hence the lower price.

Yes it does makes an impact on the economy. I mean there are already a fixed amount of Bitcoins present in the market, from that also many are lost, so this made Bitcoins less in number to be mined or to be occupied. But the demand of the coin remains same and hence due to less in supply and more in demand the price will definitely grow up. Sad to hear that many people lost their Bitcoins and at that time they didn’t value it so much. But now the scenarios are really different.

Maybe it would have a significant effect if around half of Bitcoin can be lost forever but for now we could not quantify the real effects, if any. Now, having said that, I think the effect is so much on the Bitcoin holder that lost the key or in other ways. Of course, we know some famous stories along this line and personally they are really so sad...to see fortunes gone to waste. I am sure this can never happen to me since I do not have any big amount of assets stored in Bitcoin. This is one of some risks in dealing with cryptocurrency and that is why there is really that need to always educate and remind people to be extra-careful with their keys and in doing the very transactions...we need to triple check everything!

Of course it has an effect, we may call it positive as the demand is going to be high as no one can claim that lost bitcoin, pushing the price.

It's just unfortunate that it had to happen to those people, but how everything goes in the world, sometimes we really don't think that something is worth in the future and we just throw it away.

Yes, definitely.

They're like actual burned bitcoins that has retained value on their own that will never be recovered. And that's the reason why those people telling bitcoin will go to zero don't understand the value of those lost bitcoins forever.

And this is why many are betting on bitcoin's future, being limited in supply and those lost bitcoins forever adds more value to its limited supply.

It has a positive impact, but I don't think it's that significant. Lost Bitcoins make the remaining Bitcoins more scarce, but the price is mostly determined by the demand. Some altcoin developers could create some altcoin, which is more scarce than Bitcoin(let's say 1M coins hard cap). Will this altcoin reach a higher price than Bitcoin Core? I don't think so, because the people trust in the Bitcoin Core blockchain and Bitcoin Core has earned their trust across the years. People's trust determines the demand for BTC, which determines the Bitcoin price.
A scarce resource with zero demand is as worthless as a bunch of rocks.

It doesn't make significant impact to the Bitcoin, it just make the other coins that currently people are still holding and have access are more valuable since Bitcoin become more scarce. I mean to make Bitcoin price is more expensive, it doesn't need someone to sacrifice their coins to an address that no one can access. Bitcoin itself is already have a good purpose and vision, that's alone already make Bitcoin can be worth for a million or billion.

The more bitcoins are lost, the more valuable, scarce and rare bitcoin becomes. It's really unfortunate for those who lost access to their holdings, I feel sorry for them and wouldn't like to see anyone on the same situation, but I can't deny it impacts bitcoin price positively as more adopters start investing. It works like an extra boost for bitcoin price during bullish seasons and even during the bearish ones, as it also helps keeping bitcoin at support level price ranges.

Well of course it does have an impact to bitcoin's price. The fact that there are only 21,000,000 bitcoins in existence with an immutable supply, add to the fact that these estimated 3,000,000 bitcoins lost forever that could never be recovered adds scarcity and in result a higher demand for these things. So whenever people like the ones you mentioned announces that they have lost their bitcoins, A part of me is a little bit happy because that means fewer coins in circulation which makes the price for one increase even more. Still, my heart goes for all these people who deserve to still be able to access their wallets. Someday, someday.

Possible on the Bitcoin price due to the demand and supply which have an impact on the price, lost Bitcoin could be considered lowering the hard cap and AFAIK, from 21 million to 17-18 million.  I've read before in an article on Chainalysis (a company that studies blockchain) it's around 17-23% of Bitcoin has been already lost and it will keep increasing the amount in the future.

So it really has an impact on the price, they seem like a long-time holder of Bitcoin but unrecoverable.
So it's impossible Bitcoin price to become zero value even though there are many people who dumped it.

Bitcoin price is primarily affected by supply and market's demand, so its a yes. People might not observe it as significant change but its probably affected in some positive way. But for a season like this, it's way too hard to push through, the lower demand and the other factors affecting bitcoin price due to global crisis is much stronger this days.

If none of those coins were lost, the price right now would be lower, but we can't know by how much, because we can't know what would have happened to those coins. Maybe some of them would be sold to hodlers who wouldn't touch them, or maybe some of the owners would still hodl them.

Anyway, massive loss of coins is a thing of the past. Today's coin management solutions are far better than an early days, and people are less careless with their coins, and coins are now less concentrated - in the early days people owned thousands of coins, now people own single coins or a fraction of a coin.