Topic: Lost Bitcoin and possible future scarcity - page 2. (Read 191 times)

A Bitcoin wallet usually contains a lot of private keys, from which associated public keys and public addresses are derived by known cryptographic recipies. But yes, normally you need to have the private key to move coins in the blockchain. The blockchain itself doesn't know or use public addresses, those are only recipies for how to construct so-called unlock scripts for coins.



By design there can be only 20,999,999.9769BTC, of which some are provably lost or unspendable (as already said e.g. the Genesis block coinbase subsidy of 50BTC is unspendable, even if you had the private key; there are few examples of miners who didn't claim the total allowed block subsidy and transaction fees, those unclaimed coins are forever lost, too; any coins sent to OP_RETURN outputs are burned and lost; ...).



Why those should be considered lost coins? Elaborate, please!

There might be a likelyhood that early coins are lost coins because wallets were deleted when Bitcoin didn't yet had a accepted value. But we can't know if those are really lost.



With 100% certainty blocks 0 (Genesis) and block 9 can be attributed to Satoshi Nakamoto (Satoshi sent some coins from coinbase of block 9 to Hal Finney and this is well documented).

See http://satoshiblocks.info/, there's some scientific evidence that Satoshi mined around 21954ish blocks (this yields ~1.1million BTC). Every of those coinbase outputs were mined to a public key, never to a public address!

This bitcoinexplorer.org lists blocks with a miner attribution.



Why are you so concerned about dormant wallets exactly? We can't really calculate them all together, except maybe that you could put them into buckets of unspent age. But that doesn't give you any certainty if those are only dormant or provably lost. What's the fuss about them anyway?


I added my answers in color.

Of course not. There have been wallets that's been around for a decade then suddenly became active.

No. Because it's his money. He should do whatever he wants with it.

Even dormant wallets already sort of provide some 'scarcity' due to the fact that they're off the markets.

Around 500k lost probably. Just a random guess.

Since these questions were already asked before, I'll just say most of the common answers other members have given over time.

The number of bitcoins in dormant addresses are considered as dormant because we don't have a way to know for certain if the keys are lost or not. Even today, most of the figures you might read on the internet regarding these 'lost coins' are guesstimates wherein they get the number of bitcoins sitting on wallets for a certain period of time.

Even if you come up with a sensible equation or analysis to get an exact number of coins that would no longer be in circulation ever, it will never be correct as there had been some cases wherein dormant coins were transferred to another wallet after 10 years or more.

Answers to discussion questions.

• I do not really know whether it is lost forever because it is still possible that the owner of the wallet who is inactive due to the death of the owner has submitted or inherited a private key or seed phrase to other parties who are trusted.
• I don't feel disturbed.
• Can be a cause of scarcity based on the amount of Bitcoin 21 million BTC.
• No.

In the precautionary measures of the loss of Bitcoin, all of these points I agree and I think whoever the owner of Bitcoin is currently stored in a special wallet, it is necessary to pass on people who can believe like wives/husbands to be used properly as assets. The act of passing down needs to be done on an ongoing basis until the child for his future.

I never knew how other people did it, but in my opinion bequeathed Bitcoin the actions that I would take if I had large amounts of bitcoin.

The genesis address holds 50 bitcoins less than that, because the genesis block reward is unspendable. 


Satoshi definitely mined lots of the first blocks, and since these coins remain untouched, if he is alive and possesses the keys, it's plausible that he could own thousands, or even millions, of coins. 


There are a few thousand provably lost coins, but beyond that, our knowledge is limited.  Speculating about lost coins doesn't seem valuable given the high level of uncertainty surrounding our conclusions.  I hope this addresses all of your concerns.  There isn't anything more to say. 

Yup, that's the whole idea and the appeal of Bitcoin, lost coins are lost, we don't print more to have a constant supply, and nobody but the free market cares if some coins are truly lost or are just asleep in someone's wallet.


Apart from number 3 which is clearly a yes since, well, that's how things work, for all the rest nobody would know the answer, maybe Satoshi himself on the second but for anyone else is just crystal globe territory.
But most important, lost coins don't pose a problem, will not pose a problem in the future and if someone thinks oh no we will only have 1 million Bitcoins in 2100, it's not like,  that we will still have 100 trillion satoshis.

Bitcoin is a decentralized network and also a digital currency that uses a peer-to-peer system to process and verify transactions. These transactions are recorded on a public ledger, also called the Blockchain.

The standard for owning Bitcoin is by having a wallet (ideally a non-custodial wallet), which contains: a private key that gives full control of the coins, and also a public address (wallet address) that allows individuals to receive and verify transactions on the Blockchain.

As designed in the Bitcoin protocol, there can be only 21 million BTC in circulation, even though other enthusiasts might think otherwise due to proven calculations and reasons not to estimate.

The concept of Bitcoin scarcity is strongly tied to halving events where rewards of miners are reduced, thereby decreasing the amount of Bitcoin entering circulation. In more detail, the total supply (21 million) remains constant, while circulating supply keeps increasing as long as mining continues, but the amount entering circulation is reduced by halving, thereby leading to more demand.

In addition to scarcity, Lost Bitcoins happens to be a significant contributor. Dormant wallets, also known as hibernated wallets, are considered to house lost Bitcoins. Identifying the total number of lost bitcoins can be very challenging or even impossible due to the fact that there are several inactive wallets connected to the Blockchain, making it impossible to tell who is holding and who has lost.

For example, Satoshi Nakamoto happens to mine the first block. The Genesis address created holds about 99.85 BTC and is currently a dormant wallet. There are also speculations that Satoshi might have thousands of dormant wallets as they were used to receive block rewards. By subtracting the amount of Lost Bitcoin from 21 million, it is likely that we are left with an amount lesser than the total supply when unlocked.

There are hundreds, if not thousands, of dormant wallets that house Bitcoin of different amounts. When we calculate all together, we realize that we are short of the total supply, which I think would trigger scarcity as more people would want to hold the ones available.

Discussion Questions

• Do you think all dormant wallet (long inactive wallets) are gone forever?
• As we are not certain of Satoshi's return, should we be bothered about his dormant wallets?
• do you think lost Bitcoin can cause Bitcoin scarcity in the future?
• From a total of 21million total supply, can you attempt a prediction guess of the total number of Bitcoin that would be in active wallets after all Bitcoin has been mined?

In addition, here are ...
Possible Causes of Lost Bitcoin

• Death of the holder
• Transferring to the wrong network or address (though some wallet software can detect this and notify the sender before the button is hit)
• Inability to remember memorized or find written seed phrases
• Wallet compromise such as phishing hacks, etc.

Preventive Measures

• The use of private hardware wallets (cold wallets) is strongly encouraged.
• Seed phrases should never be memorized, nor written on a mobile device or computer. They can be written on paper or in a book that shouldn't be visible to external members and should be strongly protected.
• Having a backup of your documented seed phrase is crucial in case of unplanned circumstances like a fire outbreak.

Genesis block - https://www.blockchain.com/explorer/addresses/btc/1A1zP1eP5QGefi2DMPTfTL5SLmv7DivfNa