Topic: Suggestion: Redistributing Lost Funds by Erosion (Read 324 times)

banksters? to charity? are you kidding me? I have never in my life heard of such a thing as a greedy bankster helping a charity out...

banksters? to charity? are you kidding me? I have never in my life heard of such a thing as a greedy bankster helping a charity out...

It's horrible to use funds from holocaust victims. They should have just sent it to a charity??
In America adverse possession is usually varied by state law, with some states only requiring 7 years of continued unopposed possession

Oh I will definitely read more on the subject. At least in my country (terminology differs but I think it is legally the same) what you are describing takes 25 years to take effect. 25 years is not 3.

I have read on Swiss banks actively using founds deposited by holocaust victims during WWII, so banks do that too.

I have a suggestion, and I'd like the community's thoughts.

It is well known that many bitcoins are no longer accessible due to loss of private keys, but no one knows how much. While estimates exist, they rely on imprecise methods. Most famously, there is still a large amount of bitcoin in Satoshi's wallet, and it is unclear whether they will ever be spent. This phenomenon causes undesirable uncertainty in the market, undercuts the slogan "there will eventually be ~21 million bitcoins", and in a sense causes deflation.

I thought of a way to increase transparency as to how many bitcoins are actually in circulation, and also increase miners' rewards, through a process that somewhat resembles erosion (hence the name). Seems to me it can be implemented as a soft-fork, though I haven't worked out the details to verify this (I'd like to hear what the community thinks about this idea before delving in more deeply, if ever).

Onto the idea itself. I'll make up some parameters as an example. Basically, from the moment an address receives funds, a countdown begins. Whatever funds are left in the address after 3 year will start eroding, meaning that every week from then on another 0.1% of the amount in that address may be taken by the miner (technically each block will contain a list of addresses with the funds that were taken).

If you have funds sitting in an address and you don't want them to erode, all you have to do is spend them to yourself once every 3 years. Hot wallets can automate this, and cold wallets can warn you to do this manually. Even if you forget, assuming you at least check once in a while that your funds are in place, you would see the erosion that began, and take action before much damage took place.

Although I don't think it's technically possible to include these eroded funds in the coinbase transaction itself (as that would make it a hard-fork), they could be implemented to act as if they were, i.e. they must mature 100 blocks before being spendable.

So to reiterate, we gain (a) transparency as to how many bitcoins are in circulation, since users are incentivized to prove that they still possess their private key every once in a while, and (b) miners will be able to access lost funds, returning them into circulation and increasing the security of the network.

I go into a bit more detail here to those interested: https://gist.github.com/yotamDvir/e7ff52a34460f3c9a6bf3051b0e51414.

I don't consider this telling people what to do with their money, since sending money between addresses in the same wallet is just a technicality. Everyone is still keeping their own money. Consider this: when you spend money from an address, Bitcoin protocol forces you to spend all the money from that address (keeping change by adding another output). Seems similar to me, in the sense that technically you're forced to do something particular with your money, but not really, since it's just details of the protocal that don't affect you (again, similar assuming you can access your prvkeys)

The while word there is important. This isn't trying to solve a problem of people losing their funds, but something different. Unfortunately, in this proposal adds a possibility of losing funds. The point is that erosion is very slow and starts only after a long time, so it should be trivial to avoid any loss whatsoever, and losing very little if mistakes happen (this is assuming you have access to you own prvkey at least once in a while, which now I understand is not valid in all cases).

I've tried to look it up when I was thinking about this and nothing came up. Mind sharing a link to a place that discusses it (as a soft-fork for Bitcoin)?

Yeah, it's an old idea that went nowhere till now.

I've probably missed the part in which this "solution" does this.

I'm my own bank, I have my coins, those are mine, nobody else should try to touch, spend, divide, decay, move ....whatever them.

nice effort. but this is basically forcing people to move their coins. maybe i like to buy 1 bitcoin and hold it for my retirement and i don't care what happens during that time. my retirement is not for (lets say) 30 years. with this you are forcing me to move my coins against my will every couple of years.
and that creates a large number of on-chain transactions that wouldn't have existed otherwise.

i haven't really checked this but i believe UnitedBitcoin (UB) is already doing something similar to this. you may want to see for yourself what the differences are: https://www.ub.com/

Although this May sound horrible, it's quite legally correct. I run a banking group in London, and this is what the regulations call for. When someone is not actively using his personal or real property, it can be subject to adverse possession, where 3rd parties can simply legally take possession of the property after being in possession for quite a length of tim.

A central value in bitcoin is that we don't tell each other what to do with each others money.

The whole point is to make it as easy as possible to not lose any money, while still being able to reusing lost funds (although at a significant delay unfortunately).

Your "proof of possession" concept is (also) on a collision course with the "proof of burn" concept.  By design, the burned coins cannot be moved - ever.

nope im seeing the bigger broader picture. and this idea is not new, and has been laughed at, tried, tested and failed and laughed at again and again many times (see my p.s at the end for a hint)

my PUBLIC key is my identity. i can paste that into a explorer and check the value without needing to touch my private key. i do not want to change my identity just to keep some mining pool from robbing me fast or slow.

my private keys are locked away to avoid me getting tempted to spend.

my analogies of banks(pools) where your hope that banks(pools) will trickle the funds out to the community is obsurd.

It starts to look like you're just intentionally misunderstanding me. I said multiple time that you would send to yourself. You are in no way forced to send coins to addresses of different wallets. I myself don't mind doing that at all, otherwise I wouldn't have proposed this in the first place.

Banks? Trickle down economic? Redistributing to the needy?
What are you talking about? Who is saying any of this?

ok in 3 years time from today. if you have not changed your mortgage deed into your spouses name.. the bank gets the house.. even if its fully paid for and in your name

.....

it makes you poorer and banks richer.
its not redistributing wealth to the needy..
trickle down economics does not work

so.. let you practice wat you preach today.. before trying to suggest its wat the community should be forced to do

.....


so moving coins from hoarders to mining pools wont make a blinding bit of difference to the market transparency. its just giving mining pools a free 0.1% bonus while making savers 0.1% poorer

I may want to set some aside in separate wallets for my children and grandchildren. These coins could sit there for 50 years before we access them. I don’t want anyone taking my retirement money or the money I want to leave to my family after I die.

This is about knowing how many units there are in circulation, to add transparency in the market.

I don’t think is going to work because I may want to put my Bitcoins in a wallet and hold it for 30 years so I can use it for retirement. Or I may want to set some aside in separate wallets for my children and grandchildren. These coins could sit there for 50 years before we access them. I don’t want anyone taking my retirement money or the money I want to leave to my family after I die.

Although this May sound horrible, it's quite legally correct. I run a banking group in London, and this is what the regulations call for. When someone is not actively using his personal or real property, it can be subject to adverse possession, where 3rd parties can simply legally take possession …

That said, it's fitting for a majority decision whether or not clearly abandoned coins are redistributed or not. Let the decentralized majority decide to adversely possess dormant bitcoins. No one can complain because it is a majority vote

this is the key problem with your idea.
your only base for calling some funds lost is the last time they have been accessed. so what you are calling "lost" others may call their "retirement funds".

So if I want to store my coins in a time-locked address using OP_CHECKLOCKTIMEVERIFY (OP_HODL) for, say, 4 years after that soft-fork, my coins would slowly start to erode at the 3 year mark?

This will discourage people to invest in Bitcoin. What Store of Value will Bitcoin be, if you wealth will erode over time?

If I find my lost private key some years later, and see that my bitcoins are vanished, makes me feel very sad.

A central value in bitcoin is that we don't tell each other what to do with each others money.

There is absolutely no way on Earth to tell what coins are in cold storage and what coins are lost.

There is also no reason whatsoever to do this and it addresses no problem. Bitcoin would work exactly the same way even if there were only 1 bitcoin. Or even less. The total production of BTC, 21million coins, is an arbitrary number and could have been 10 million or 100 million.  The coins that are now inaccessible are gone forever. Stop thinking about them, lol.

I dont like the idea of forcing others to use the coins under the threat of confiscation. The confiscation resistence is one of the main advantages of Bitcoin, not its weakness!

Maybe you should describe better how it could be a softfork change, because it all looks like hardfork to me.

Others have said that it is a terible idea because so many things that I will not repeat those arguments.

What I want to say is that I really cannot see any benefits to this idea, either. What is the difference if the total supply is lowered by say circa 5% to 20m? It only means that the bitcoins remaining in circulation are that little bit more expensive in a long run.

Yes maybe I should have been clearer about this here: the count will only begin after the soft-fork takes effect, so all users will have a good few years to hear about this change in consensus (I did write it in the link I posted btw). Haven't thought about people that have already intentionally locked their private keys away for many years without them being able to access them at all. It that a thing?

Just want to clarify once again, the point is not that people should hand out money after some time, only to redistribute funds that are actually lost.

I have a suggestion, and I'd like the community's thoughts.

It is well known that many bitcoins are no longer accessible due to loss of private keys, but no one knows how much. While estimates exist, they rely on imprecise methods. Most famously, there is still a large amount of bitcoin in Satoshi's wallet, and it is unclear whether they will ever be spent. This phenomenon causes undesirable uncertainty in the market, undercuts the slogan "there will eventually be ~21 million bitcoins", and in a sense causes deflation.

I thought of a way to increase transparency as to how many bitcoins are actually in circulation, and also increase miners' rewards, through a process that somewhat resembles erosion (hence the name). Seems to me it can be implemented as a soft-fork, though I haven't worked out the details to verify this (I'd like to hear what the community thinks about this idea before delving in more deeply, if ever).

Onto the idea itself. I'll make up some parameters as an example. Basically, from the moment an address receives funds, a countdown begins. Whatever funds are left in the address after 3 year will start eroding, meaning that every week from then on another 0.1% of the amount in that address may be taken by the miner (technically each block will contain a list of addresses with the funds that were taken).

If you have funds sitting in an address and you don't want them to erode, all you have to do is spend them to yourself once every 3 years. Hot wallets can automate this, and cold wallets can warn you to do this manually. Even if you forget, assuming you at least check once in a while that your funds are in place, you would see the erosion that began, and take action before much damage took place.

Although I don't think it's technically possible to include these eroded funds in the coinbase transaction itself (as that would make it a hard-fork), they could be implemented to act as if they were, i.e. they must mature 100 blocks before being spendable.

So to reiterate, we gain (a) transparency as to how many bitcoins are in circulation, since users are incentivized to prove that they still possess their private key every once in a while, and (b) miners will be able to access lost funds, returning them into circulation and increasing the security of the network.

I go into a bit more detail here to those interested: https://gist.github.com/yotamDvir/e7ff52a34460f3c9a6bf3051b0e51414.

Although this May sound horrible, it's quite legally correct. I run a banking group in London, and this is what the regulations call for. When someone is not actively using his personal or real property, it can be subject to adverse possession, where 3rd parties can simply legally take possession of the property after being in possession for quite a length of tim.

You can Google the doctrine of adverse possession yourselves for more information. Banks probably have some kind of adverse possession type clause for their inactive, dormant accounts.
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