Lost bitcoins - a bigger flaw than originally thought? - page 4.

Piper67

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Merit: 1001

Quote from: Technomage on March 05, 2013, 07:03:41 AM

Quote from: herzmeister on March 05, 2013, 06:58:00 AM

It is said that people can't think exponentially, but they also can't think asymptotically.

In 2013, John Doe I. may lose his 400 USD or 10 BTC wallet.
In 2014, John Doe II. may lose his 400 USD or 1 BTC wallet.
In 2015, John Doe III. may lose his 400 USD or 0.1 BTC wallet.

This pretty much covers the problem in its entirety. The average user stands to lose less and less every year. However, I think that the security of Bitcoin holdings will increase and people will figure out how to handle inheritance, etc etc. So I don't believe there will be a fixed percentage of lost coins, it will likely be a smaller percentage in the future. When and if Bitcoin hits mainstream, there could be a temporary spike in lost coins due to negligent use.

It's already increased. Multiple backups, online wallets (themselves backed up). I don't think we're going to see anywhere near a loss rate of 2% yearly. More like .2%.

Technomage

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Affordable Physical Bitcoins - Denarium.com

Quote from: herzmeister on March 05, 2013, 06:58:00 AM

It is said that people can't think exponentially, but they also can't think asymptotically.

In 2013, John Doe I. may lose his 400 USD or 10 BTC wallet.
In 2014, John Doe II. may lose his 400 USD or 1 BTC wallet.
In 2015, John Doe III. may lose his 400 USD or 0.1 BTC wallet.

This pretty much covers the problem in its entirety. The average user stands to lose less and less every year. However, I think that the security of Bitcoin holdings will increase and people will figure out how to handle inheritance, etc etc. So I don't believe there will be a fixed percentage of lost coins, it will likely be a smaller percentage in the future. When and if Bitcoin hits mainstream, there could be a temporary spike in lost coins due to negligent use.

beeblebrox

member

Activity: 117

Merit: 10

A loss of 2% per year gives a half-life of about 36 years, ie: that's how long it takes to loose 50%.
So, say we've already lost 1,000,000 due to early folly so far but from now on only 2% lost then:
In about 36 years you'll have about 10,000,000 left (this not really that accurate-- because I've based it on the max 21000000 being mined already now when really the next approx~10,000,000 will be mined over this period-- but most of them are mined in the next 8 years so it not so bad)
in about 72 years you'll have about 5,000,000 left
~108yr -> 2,500,000
~140yr -> 1,250,000
~170yr -> 500,000 or so.

500,000 is plenty enough to still be able to buy small cheap items.

(as-an-aside: Personally I believe that we should allow miners to recover lost coins, but for reasons other than coin base skrinkage.)

herzmeister

legendary

Activity: 1764

Merit: 1007

It is said that people can't think exponentially, but they also can't think asymptotically.

In 2013, John Doe I. may lose his 400 USD or 10 BTC wallet.
In 2014, John Doe II. may lose his 400 USD or 1 BTC wallet.
In 2015, John Doe III. may lose his 400 USD or 0.1 BTC wallet.

Tacticat

full member

Activity: 210

Merit: 100

The more valuable the coins are the less loss there will be.

luke.watson

sr. member

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His maths might be off but it's true

We start with 21 M (assuming no coins are lost until all coins have been mined)

Year 1 : 21M
Year 2: 20.5M
Year 3: 20.1M
Year 4: 19.8M

This could in theory continue until we are down to 1 Bitcoin and everyone is trading in 0.0000000001s for a new Ferrari, its true though the loss of coins with no coins being added is a issue, even if only 0.5 BTC were added a year it would still help to combat the loss of coins..

Although, coins are not actually lost they are just inaccessible ie the owner has forgotten his password, so I assume there will be a big business in tracking down lost BTC and recovering them in the future especially for the wallets of innovators who might have hundreds of coins stashed away and at $40 USD for 1 BTC I wouldn't mind finding one of these accounts even now

cho

full member

Activity: 155

Merit: 100

Boar with me

a 2% loss per year does not lead to a 40% loss in 20 years.

"all the coins will become lost" : no, not with a flat x% rate of loss per year. For all the coins to become lost, you need a 100% loss the last year.

nwbitcoin

sr. member

Activity: 294

Merit: 250

You are a geek if you are too early to the party!

Having used the search facility a bit, all the discussion on lost coins seems to be focused on its only a bit, and it will make the rest more valuable so its not an issue. However, I think there is a problem with this thinking.

All physical currencies have a percentage that are lost. Its generally around 2-3% per year, and mostly effects the smaller denominations.

If we have a situation where we know there will only be 21 million coins, eventually, all the coins will become lost.

As things were, when you had so many coins that thousands are needed to buy a pizza, then that's when even the biggest denominations are worthless enough to lose. You also have the issue with losing wallets and that whole learning cycle that early adoptors suffered.

As the mainstream start using the coins, they too will lose a few coins as they get used to the security needed to not lose this new currency.

Assuming a 2% lose per annum, within 20 years, half of the total number of coins will have been lost.

Does anyone else see this as a problem, or is the idea that because the coins can be split down, there is still enough currency to be used by everyone on the internet - for ever?

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