Proposed solution to "lost coins" - page 2.

Tehfiend

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Quote from: astor on April 18, 2013, 12:02:30 PM

To me it seems that just declaring them unspendable is the option that changes incentives/rules the least. Giving the coins to miners changes the rules.

Imagine that this situation happened when 99% of the coins were mined and suddenly 10% of coins were going to be given to miners, giving them 10x as much as before this decision.

Doesn't make much sense to me.

Edit: The change that does the least change in incentives is to announce that there will be a window of spendability that reaches X years back at all times, where X > the oldest coin. Then no coin is invalidated now, but a rule that keep uncertainty bounded has been introduced.

Why exactly do you feel it's so wrong to change the incentives in this fashion? If recycling was added now with a 100 year shelf-life on coins, there would be PLENTY of time to account for the added mining incentive coming way down the road. I know some are concerned that transactions fees won't be enough incentive to secure the network down the road and this would add to the incentive without increasing the intended supply of coins. Again, I no longer think this is needed but like to play devil's advocate...

Quote from: misterbigg on April 18, 2013, 12:45:23 PM

Quote from: ?? on ??

Some how, some way, we need to teach every noob how to use the search function. Maybe they should all have to prove they know how to search for a topic before they get out of noob jail? Moderators, can we make this happen? Just some sort of test where they have to use the search function once before they are allowed to post "new" topics?

This is wishful thinking. If you really want to solve this problem, require that anyone who wants posting privileges post a bond, in Bitcoins. Some nominal fee like $25 worth of Bitcoins. If they break the forum rules, like posting something that could have been found via search, they forfeit the bond. Problem solved.

Solve what problem? The problem of bitter vets having to scroll past a topic they've already discussed? I have a solution that's much easier. Just ignore posts that you are not interested in participating in. You could also just link to the previous topic which would take just slightly longer than posting a complaint. Or you could contribute and help educate the new generation of bitcoin enthusiasts.

misterbigg

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Quote from: ?? on ??

Some how, some way, we need to teach every noob how to use the search function. Maybe they should all have to prove they know how to search for a topic before they get out of noob jail? Moderators, can we make this happen? Just some sort of test where they have to use the search function once before they are allowed to post "new" topics?

This is wishful thinking. If you really want to solve this problem, require that anyone who wants posting privileges post a bond, in Bitcoins. Some nominal fee like $25 worth of Bitcoins. If they break the forum rules, like posting something that could have been found via search, they forfeit the bond. Problem solved.

astor

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To me it seems that just declaring them unspendable is the option that changes incentives/rules the least. Giving the coins to miners changes the rules.

Imagine that this situation happened when 99% of the coins were mined and suddenly 10% of coins were going to be given to miners, giving them 10x as much as before this decision.

Doesn't make much sense to me.

Edit: The change that does the least change in incentives is to announce that there will be a window of spendability that reaches X years back at all times, where X > the oldest coin. Then no coin is invalidated now, but a rule that keep uncertainty bounded has been introduced.

Tehfiend

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Wow it only took a week for some legit discussion to appear, better late than never Tongue

. I love talking about bitcoin so thank you...

JoelKatz has explained the intention behind this idea much better that I did initially. The reason I wanted to redistribute lost coins via mining was to maintain the intended circulation of coins since I assumed there was a lot of thought that went into the distribution system and lost coins seemed to undermine that. I know a lot of people lost a lot of early coins and, for the reasons stated above, not knowing the TRUE number of coins in circulation bugged me but like I said yesterday, I no longer have any concern about this since I'm certain all of this was considered. Satoshi is much much more clever than I and if he felt this was an issue, he would have already built recycling into the protocol. I also feel that in a hundred years, we'll be able to easily determine how many "early coins" were lost with close to 100% certainty since the age of coins is public and it would be doubtful a coin would go untouched for that period of time. For now, we'll just have to stare at the HUGE pile of old coins and wonder how many might be suddenly dumped on the market and how many are lost forever...

TalkingAntColony

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Quote from: knightmb on April 18, 2013, 01:34:21 AM

Quote from: TalkingAntColony on April 11, 2013, 11:38:36 AM

Bitcoins are infinitely divisible. Just update protocol to store value in a 128 bit integer instead of the current 64 bit integer. That would satisfy the decimal place need for a loooong time. When you bring back lost coins, you dilute the aggregate value of everyone's bitcoins, similar to what happens when the Fed prints USD.

I see this come up a lot, Bitcoins are not infinitely divisible.

Quote from: Bitcoin Specs

Each bitcoin is subdivided into 100 million smaller units called satoshis, defined by eight decimal places.

0.00000001 is the smallest amount you can spend. If you remove the decimal point it becomes easier to visualize with whole numbers.

So if we changed the protocol to use a 128-bit integer for the Tx value as opposed to the current 64-bit integer, you are saying we couldn't use the extra bits for more decimal places? Why not? Yes, we would also have to update the "scaling factor," but we coud keep 1 BTC = 100,000,000 satoshis, and 1 satoshi = 100,000,000 or so integer units of the 128-bit integer.

Think of it like this: 1 BTC represented as a binary 64-bit integer (how it is now):

Code:

0000000000000000000000000000000000000101111101011110000100000000

1 BTC represented as a binary 128-bit integer:

Code:

00000000000000000000000000000000000000000000000000000000000000000000000000100011100001101111001001101111110000010000000000000000

21,000,000 BTC represented as a binary 128-bit integer:

Code:

00000000000000000000000000000000000000000000000000101100011110000001111101110000100011000101000010011111010000000000000000000000

So you see, with a 128-bit integer and the scale factor 1 satoshi = 100,000,000 128-bit integer units, we can add more decimal places. There are still many unused bits on the left, so we could use a larger scale factor for even more decimal places.

astor

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Quote from: JoelKatz on April 18, 2013, 01:45:50 AM

Quote from: gmaxwell on April 17, 2013, 11:04:11 PM

Quote from: JoelKatz on April 17, 2013, 11:01:38 PM

A recycling scheme would mean at some point that risk would be removed.

You don't have to recycle for that, you can just take them out of circulation with certainty. This avoids the economic distortion of transferring wealth to whomever your recycling gives the coins to... so don't conflate recycling with being sure what the supply is, they're separate issues.

For a currency that uses proof of work to prevent double spends, I think it makes the most sense to use it to replenish a mining reward pool. But I'm not intending to address the distinction between locking the coins and recycling the coins. I actually think it doesn't matter.

What you're saying is absolutely correct. You're the only one who makes sense in this discussion.

The point of destroying or recycling old coins is to reduce the risk involved in estimating the total number of coins in circulation.

The less risk there is in estimating this, the less risk needs to be hedged, and the cheaper it becomes to do transactions in bitcoins.

kjj

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Quote from: knightmb on April 18, 2013, 01:34:21 AM

Quote from: TalkingAntColony on April 11, 2013, 11:38:36 AM

Bitcoins are infinitely divisible. Just update protocol to store value in a 128 bit integer instead of the current 64 bit integer. That would satisfy the decimal place need for a loooong time. When you bring back lost coins, you dilute the aggregate value of everyone's bitcoins, similar to what happens when the Fed prints USD.

I see this come up a lot, Bitcoins are not infinitely divisible.

Quote from: Bitcoin Specs

Each bitcoin is subdivided into 100 million smaller units called satoshis, defined by eight decimal places.

0.00000001 is the smallest amount you can spend. If you remove the decimal point it becomes easier to visualize with whole numbers.

There is a 2,100,000,000,000,000 max cap for currency. As of this posting, every block found creates 2,500,000,000 currency.

64bit unsigned integer can achieve 18,446,744,073,709,551,615 or 9,223,372,036,854,775,807 signed in size.

So let's compare the two:
18446744073709551615 unsigned
vs
2100000000000000

or
9223372036854775807 signed
vs
2100000000000000

As you can see, there is plenty of room in the 64bit space for more currency, not a limitation on storage space for the digits. The 21 million limit is just an arbitrary number chosen out of thin air. Unless the rules of the system are changed again to use more digits, I don't think you can spend a transaction for 0.0000000000000000000000000000000000001 and it get processed by the network.

I'm sorry, but you have this backwards.

The fundamental unit in bitcoin is 1 BTC, not 0.00000001 BTC. Right now, the protocol operates in integer units of 0.00000001 BTC, but that is an accident of history (that is, the scaling factor in the first release was 100000000, and we haven't changed it yet).

Changing the scaling factor in the client would be no big deal, because 1 BTC before would still be 1 BTC after. Renormalizing in the other direction, so that 1 satoshi before = 1 satoshi after, but 1 BTC before = 0.001 BTC after would be a disaster (and thus never gain any support).

Hei_

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Quote from: jackjack on April 09, 2013, 11:11:59 AM

1. Propose a terrible idea and ask people to tell you why it's terrible
2. Be told why it's terrible
3. Get pissed
4. ? ? ?
5. Profit

!

JoelKatz

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Democracy is vulnerable to a 51% attack.

Quote from: gmaxwell on April 17, 2013, 11:04:11 PM

Quote from: JoelKatz on April 17, 2013, 11:01:38 PM

A recycling scheme would mean at some point that risk would be removed.

You don't have to recycle for that, you can just take them out of circulation with certainty. This avoids the economic distortion of transferring wealth to whomever your recycling gives the coins to... so don't conflate recycling with being sure what the supply is, they're separate issues.

For a currency that uses proof of work to prevent double spends, I think it makes the most sense to use it to replenish a mining reward pool. But I'm not intending to address the distinction between locking the coins and recycling the coins. I actually think it doesn't matter.

knightmb

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Quote from: TalkingAntColony on April 11, 2013, 11:38:36 AM

Bitcoins are infinitely divisible. Just update protocol to store value in a 128 bit integer instead of the current 64 bit integer. That would satisfy the decimal place need for a loooong time. When you bring back lost coins, you dilute the aggregate value of everyone's bitcoins, similar to what happens when the Fed prints USD.

I see this come up a lot, Bitcoins are not infinitely divisible.

Quote from: Bitcoin Specs

Each bitcoin is subdivided into 100 million smaller units called satoshis, defined by eight decimal places.

0.00000001 is the smallest amount you can spend. If you remove the decimal point it becomes easier to visualize with whole numbers.

There is a 2,100,000,000,000,000 max cap for currency. As of this posting, every block found creates 2,500,000,000 currency.

64bit unsigned integer can achieve 18,446,744,073,709,551,615 or 9,223,372,036,854,775,807 signed in size.

So let's compare the two:
18446744073709551615 unsigned
vs
2100000000000000

or
9223372036854775807 signed
vs
2100000000000000

As you can see, there is plenty of room in the 64bit space for more currency, not a limitation on storage space for the digits. The 21 million limit is just an arbitrary number chosen out of thin air. Unless the rules of the system are changed again to use more digits, I don't think you can spend a transaction for 0.0000000000000000000000000000000000001 and it get processed by the network.

CIYAM

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Ian Knowles - CIYAM Lead Developer

For a "solution" there would need to be a "problem" - yet as you are seeing from most replies few here actually see this as a problem (if some bitcoins get destroyed and the remainder are worth a bit more then most holders would in fact be happier and if transactions end up being generally in mBTC then just switch your client to display them as such).

As has been pointed out there already exists at least one alt-coin that perhaps does what you want and you are of course free to create your own - but trying to get such a fundamental rule changed in Bitcoin is simply not going to be accepted (and as also pointed out there is generally a new thread with the same sort of idea that appears every few months).

robamichael

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Quote from: JoelKatz on April 17, 2013, 11:01:38 PM

Quote from: robamichael on April 17, 2013, 09:54:20 PM

I'm sure a lot more people discarded wallets with 10,000 bitcoins in them in the early days than do so today. If you assume Bitcoins continue to gain value over the long term, those possibly lost early coins represent more and more currency value that may or may not be in circulation.

Of course. But as bitcoins rise in value, so will the incentive to unlock these sleeping coins increase.

If the Bitcoin experiment succeeds, there will come a time for price stabilization after there is adoption. Since our hypothetical is that dormant users at some point decide to access their coins, aside from the increasingly unlikely instances of long forgotten and now remembered passwords, some cause must act as a trigger for bitcoiners to re-access their coins.

The most likely trigger to awaken the dormant users will be the price. I suspect that as the adoption of bitcoin plays out, the bull market of bitcoin will begin to wane. On its way up, more and more past users will reenter the market, and there will be less sleeping coins to worry about.

Stabilization will only occur after adoption, and because adoption is necessarily linked to awareness, the decreasing risk of zombie coins will be one factor contributing to a less volatile Bitcoin.

Quote

Hedging has costs.

The amount of hedging necessary post-adoption would be very small.

gmaxwell

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Quote from: JoelKatz on April 17, 2013, 11:01:38 PM

A recycling scheme would mean at some point that risk would be removed.

You don't have to recycle for that, you can just take them out of circulation with certainty. This avoids the economic distortion of transferring wealth to whomever your recycling gives the coins to... so don't conflate recycling with being sure what the supply is, they're separate issues.

JoelKatz

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Democracy is vulnerable to a 51% attack.

Quote from: robamichael on April 17, 2013, 09:54:20 PM

Why this quote has gone unnoticed so far is beyond me - this is exactly the nail in the coffin to the "recycling" proposal.

If you recycled all the frozen coins to all the new addresses, you would effectively be decreasing the purchasing power of each unit of bitcoin by an amount equal to the percentage of bitcoins being "recycled" (stolen) compared against the entire bitcoin money supply.

"Recycle" (steal) or not, and the result is the same. Of course, if the coins were mistakenly taken from a participating, yet dormant user, you have done great harm to that user's personal stake.

The issue is that if you don't recycle coins, the supply of currency is much less predictable. "Zombie coins" that haven't been in circulation for fifty years may be lost or they may be spent at any time. This creates currency risk that people have to hedge against. Hedging has costs.

If you recycle coins, everyone knows hat those coins are back in circulation. There is no uncertainty that accumulates about more and more coins over time. In fact, if the value of the coins goes up, the amount of uncertainty will likely decrease. I'm sure a lot more people discarded wallets with 10,000 bitcoins in them in the early days than do so today. If you assume Bitcoins continue to gain value over the long term, those possibly lost early coins represent more and more currency value that may or may not be in circulation.

A recycling scheme would mean at some point that risk would be removed.

Tehfiend

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Quote from: robamichael on April 17, 2013, 09:54:20 PM

If you recycled all the frozen coins to all the new addresses, you would effectively be decreasing the purchasing power of each unit of bitcoin by an amount equal to the percentage of bitcoins being "recycled" (stolen) compared against the entire bitcoin money supply.

While I do agree there is no need to recycle, I don't understand this argument. First, I wasn't proposing recycling stale coins to all new addresses which is really not even possible. I was proposing to reward them to miners just like all BTC are initially distributed but that's beside the point. Second, the "purchasing power" would already be increased when the coins were "lost" so by recycling them you would simply be restoring them the the value initially intended by Satoshi's design. That's where this thought originally came from. I assumed it was designed with a 21 million limit for a reason and thought the unpredictable amount of lost coins would undermine the intention behind that design. Upon deeper thought, it's obvious Satoshi would have thought of this and was obviously not concerned since he would have also come up with this not-so-clever idea which is why I no longer feel this is necessary.

robamichael

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Quote from: TierNolan on April 09, 2013, 12:33:18 PM

Unless you are worried that eventually the smallest value (1 Satoshi which is 0.00000001 BTC) will be to large for the economy, then old coins are effectively already recycled. If 5% of coins are taken out of circulation, then it increases the value of the rest.

Even in that situation, there probably would be some update to the spec to allow even smaller values. Ofc, that might cause similar discussions as the max block size ones.

Why this quote has gone unnoticed so far is beyond me - this is exactly the nail in the coffin to the "recycling" proposal.

If you recycled all the frozen coins to all the new addresses, you would effectively be decreasing the purchasing power of each unit of bitcoin by an amount equal to the percentage of bitcoins being "recycled" (stolen) compared against the entire bitcoin money supply.

"Recycle" (steal) or not, and the result is the same. Of course, if the coins were mistakenly taken from a participating, yet dormant user, you have done great harm to that user's personal stake.

And even if we assume absolutely zero mistakes with sources of the "recycled" coins, the distribution of said coins would be an entirely different reason for debate. Which is the fairest method of redistribution? If you send everybody a nominal amount, some users' wealth will grow disproportionately to others.

A nominal distribution would be equivalent to taxing savers and empowering consumers, a skewed market.

Nominal Redistribution = skewed market
Proportional Redistribution = no effect on purchasing power
Redistribution of any kind = chance of unintended theft

Lastly, I move to start updating the Wiki with these common types of arguments.

LeTanque

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Fortune favors the bold and brave

Quote from: b¡tco¡n on April 17, 2013, 08:27:10 PM

Quote from: opticbit on April 12, 2013, 02:08:39 AM

the way to recover lost coins is called...

vanitygen.

it only takes a few thousand years, or 10minutes if you happen to be lucky with extremely large values of 2.

It would take a unimaginable mathematical or technological breakthrough, or the life of this universe, and then some.

Or like, you know, quantum computing.

b¡tco¡n

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Correct Horse Battery Staple

Quote from: opticbit on April 12, 2013, 02:08:39 AM

the way to recover lost coins is called...

vanitygen.

it only takes a few thousand years, or 10minutes if you happen to be lucky with extremely large values of 2.

It would take a unimaginable mathematical or technological breakthrough, or the life of this universe, and then some.

Thursday

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horrible idea

b¡tco¡n

member

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Correct Horse Battery Staple

My objections:

1. Lost coins cause no problem for bitcoin as a whole, so why fix something that ain't broken?

2. Redistributing the coins uniformly has no real effect if you think about it. Redistributing the coins non-uniformly (e.g. only to miners) would be unfair.

3. Yes it is theft.

4. No one really owns land. Check your history books.

Topic: Proposed solution to "lost coins" - page 2. (Read 4214 times)