Topic: What happens to funds sent to invalid payment address? - page 2. (Read 4261 times)

The odds of entering a non-existent but still valid address are about 1 in 4 billion.  That is a good enough check.  The network has no idea if an address exists or not.

The short answer is, all else remaining the same, yes.

Of course, all else does not remain the same, so a little longer answer is, probably.

The regular client runs a check to make sure that the address entered is a valid bitcoin address, but it's not possible for a client to know if a valid address does not exist.  New addresses are created all of the time, and someone has to send bitcoins to one before it could enter into the blockchain.

It should run a net-check to make sure the adress exists before actually sending the coin.

No.  Eventually it will be included in a block.  The protocol supports versioning to replace a transaction w/ a newer version but that hasn't been implemented in any client yet.

Along similar lines, what happens if I send some bitcoin to a valid address but without the transaction fee and the transaction hasn't been included in any of the blocks so far? Is there any mechanism to undo the transaction?

That limit can also be extended via consensus.  Still even without extension a significant portion of the global economy could transact on a single Bitcoin.

The fear of mass coin destruction, or finite supply are unfounded.

We're still safe for a while. The smallest denomination is 0.000 000 01 BTC (one satoshi). That means, each bitcoin can be worth a billion smaller units

If it really comes to mass deletion, we still have the technology to make another currency (even billions of currencies), so I don't think there should be problems

Well not technically.  Most (all?) national banking systems are based on fractional reserve. It is the demand for DEBT which drives the multiplier and thus money supply (the amount of currency - physical coinage isn't really relevent).    It is possible that demand for debt and demand for money to decouple.   If/when that happens the value of the currency would simply rise.  It would rise against commodities (price of gold falling vs USD but not against EUR for example) and it would rise against other currencies.

Now the central bank MAY decide that this deflation is undesirable and cut interest rates to boost demand for debt but depending on macro economic conditions that may not actually result in increased debt and thus increased money supply.  For example right now interest rates are below 0% (in real terms) and demand for new borrowing is very low.

I meant that if you destroyed 1/3 of all fiat currency the economic/banking system would just create more fiat currency to meet the demand.  With BTC it is not possible since there is a finite number of coins that can be created.

Won't "the system" then own  1/3rd of all money? Man, that sounds even worse then losing a third of all bitcoin

It isn't really a big thing.

The price would rise by roughly 1/3rd.  No different than if your bought 1/3rd of all the gold in the world and destroyed it (say shot it into the sun).  Demand would remain the same (maybe increased due to speculation), supply would be reduced by 1/3rd price would rise until it reached equilibrium.  The number of "full face value" units for Bitcoin has no real significance.

Satoshi could have decided to make block reward 50,000,000 coins and a goal of 21 trillion total coins.  Price for 1M coins would be roughly the same a 1 is today.
Alternatively Satoshi to be ultra-nerdy and make everything a fractional unit.    The entire money supply was one Bitcoin.  Block reward would be 0.000002381 each and the "one" BTC would be worth ~ $30M.

Bitcoin is somewhat unique in its perfectly divisibility.  Gold for example is difficult as a medium for exchange.  1 gram is about the smallest coin that is practical and it is about $50.  With very small coins the loss due to abrasion is higher (over time 1 the 1 gram coin will contain less and less grams of gold).  There would be huge cost in minting, issuing, circulating, validating, and replacing an economy based around 1 gram gold coins.  That problem doesn't exist for Bitcoin (or any digital currency, even digital gold).

The system will just create/print more?

With BTC once they are gone they are gone so it is not exactly the same thing.

If you make a huge bonfire and burn one third of the world's cash, what happens... hypothetically?

I believe so and I think most economists would agree.

However, whatever you do, never ask any economics question in the economics forum as you will just get page after page of people fighting over the definition of the term "money supply".

But, from what I have gathered there this reduces the monetary base and should therefore drive up BTC denominated prices.

Hypothetical question: If there are 21 million bitcoins and multiple users send 7 million bitcoins to nonactive(bad addresses) wouldnt this drive up the price of the other 14 million coins since a third of the entire currency is out of "circulation?"

Don't you think that 1 BTC is pretty good deal as a tuition payment? Sometimes the Void charges much more.

Okay, thank you everybody for the help / responses.  It took forever for me to mine 1 darn coin, but at least now I know how the wallet works.  Secure wallet created.  Perhaps somebody would be kind enough to donate a coin that I lost in the void because I was dumb?

1ppF5n4mgdBtQwF8jxb79gZBRGanjXrg6

Thanks everybody!

Okay, one more noobie question, where would I find the wallet.dat file?