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Topic: Will occasional losses of bitcoin wallets limit available maximum bitcoins? - page 3. (Read 26881 times)

joe
member
Activity: 64
Merit: 10
The system at the very least needs a way to liberate lost coins.
The system does not need to liberate lost coins.

First, there's no solution because there's no way to know they're actually lost. A bank could be holding some coins as collateral for hundreds of years and never touch them.

Secondly, there is no reason to do it. It just doesn't matter whether coins get lost. The price of the coins will naturally rise as the market realizes there are fewer coins that will "budge" to higher demand.

Thirdly, the U.S. likewise does not care about lost coins. If a federal reserve note (dollar bill) get mutilated or destroyed beyond recognition, the government never does anything to redistribute that lost dollar.
legendary
Activity: 938
Merit: 1001
bitcoin - the aerogel of money
Quote
Sounds like a good solution, the key is how to reintroduce the lost coins back into the system in a fair and democratic manner.

Maybe I am missing something, but what exactly is the point of reintroducing lost coins?
sr. member
Activity: 294
Merit: 273
Actually, now that I've had time to think about this, there is already an economically appropriate return mechanism for lost coins--once the scale of computing has changed proportionally such that the cost of finding lost bitcoins is less than their value, they will be returned to circulation by the market--after a decent period of time, typically.  This never becomes a problem for non-lost coins as long as coin "savers" remember to transfer their coins to a new address every time the level of encryption is upgraded on bitcoin.   Is there any particular plan in place for the overall curve on which bitcoin public keys will be upgraded, or is that expected to be based on market demand as well?
legendary
Activity: 1708
Merit: 1007
The system at the very least needs a way to liberate lost coins.

Coins that stay dormant for say 100 years are divided up among all current users? Is something like that possible?

It's certainly conceivable that if at some point the community perceives it to be a problem, then a majority of bitcoin clients/miners would be patched such that coins that have been dormant for that long get added in some fair fashion to the transaction fees being collected by the miners, and open clients will move coins to new addresses randomly every few years to ensure that their coins stay active. But I don't think it's anything that needs to be worried about right now.

There is no way to do this that wouldn't break the system, and I'm not even sure that the system could be broken in this manner anyway. If a wallet.dat file is destroyed, and transactions orphaned, there is no way to use those coins ever again.

Well, not without a forced address collision, but I'm presuming that we would wish to spend those coins before the sun burns out.
legendary
Activity: 1222
Merit: 1016
Live and Let Live
What is the difference between lost coins, and coins that people have been saving for a long time?


None, it is mearly psychological.
legendary
Activity: 1596
Merit: 1081
What is the difference between lost coins, and coins that people have been saving for a long time?
legendary
Activity: 1441
Merit: 1000
Live and enjoy experiments
The system at the very least needs a way to liberate lost coins.

Coins that stay dormant for say 100 years are divided up among all current users? Is something like that possible?

It's certainly conceivable that if at some point the community perceives it to be a problem, then a majority of bitcoin clients/miners would be patched such that coins that have been dormant for that long get added in some fair fashion to the transaction fees being collected by the miners, and open clients will move coins to new addresses randomly every few years to ensure that their coins stay active. But I don't think it's anything that needs to be worried about right now.
Sounds like a good solution, the key is how to reintroduce the lost coins back into the system in a fair and democratic manner.

Money has two attributes: media of exchange, and store of value; as long as the system can foster participants' trust and perception of value, fairness, there should be acceptable solutions to this kind of problem.
pc
sr. member
Activity: 253
Merit: 250
The system at the very least needs a way to liberate lost coins.

Coins that stay dormant for say 100 years are divided up among all current users? Is something like that possible?

It's certainly conceivable that if at some point the community perceives it to be a problem, then a majority of bitcoin clients/miners would be patched such that coins that have been dormant for that long get added in some fair fashion to the transaction fees being collected by the miners, and open clients will move coins to new addresses randomly every few years to ensure that their coins stay active. But I don't think it's anything that needs to be worried about right now.
sr. member
Activity: 392
Merit: 250
Quantum computers will not be able to develop to a threating size without it escaping public knowable.
When it becomes likely that a quantum computer of a attacking size will been developed within the next say - 10 years. A security update will be developed that will make Bitcoin much more difficult to attack.

This update will consist of three parts:
1. Increasing the length of the hashes used for the block chain. (maybe SHA256 => XXX8192)
2. Massively increasing the asymmetrical private/public key length used to secure transactions.
3. Massively increasing the length of a Bitcoin address (the hash of the public part of a key). (maybe the new address will be 1024 + 8 character long)

This security patch will be released well before a quantum computer is developed to a stage that can attack it.  For anyones bitcoins to remain secure, they will need to 'spend' the coins to the new secure addresses.

Since 'lost' coins cannot be 'spent,'  they will on day be collected (and moved to new secure addresses) by somebody who can take the effort to crack the old (insecure) addresses.

Once, quantum computers become common, bitcoin could even use cypto that requires quantum computers to do the calculations, otherwise it would be prohibitory slow.

Thanks a lot for this explanation. I hadn't grasped that Bitcoin could be patched like this so I always had this worry that people in the future would start spending cpu generating collisions rather than blocks. Now I'll be able to sleep well at night Tongue
vip
Activity: 447
Merit: 258
The system at the very least needs a way to liberate lost coins.

The system for handling lost coins is that remaining coins are highly divisible.  When a wallet is lost, there may be 100 BTC fewer available for trading, but the remaining bitcoins can be split into smaller pieces to handle remaining transactions.  Even if all but 1 BTC was lost, the currency would continue to function as a viable medium of exchange because that 1 coin could be divided into small enough pieces to facilitate meaningful transactions.

In the United States, about .725% of the coin supply is lost each year.  Since all Bitcoin transactions are public, it should be easy to calculate how many bitcoins are lost annually and the markets will adjust accordingly.

Trading unpredictable central bank inflation for predictable annual coin loss seems like a good design decision to me.
legendary
Activity: 1222
Merit: 1016
Live and Let Live
Do you think there will be a period where bitcoin is still used, but big accounts are getting 'sniped' by fast computers? I guess with certain assumptions it might be possible. It's funny to think about the protections people would take, splitting down coins to many addresses to avoid being targeted, maybe moving them around quickly (might not help I guess).

Quantum computers will not be able to develop to a threating size without it escaping public knowledge.
When it becomes likely that a quantum computer of a attacking size will been developed within the next say - 10 years. A security update will be developed that will make Bitcoin much more difficult to attack.

This update will consist of three parts:
1. Increasing the length of the hashes used for the block chain. (maybe SHA256 => XXX8192)
2. Massively increasing the asymmetrical private/public key length used to secure transactions.
3. Massively increasing the length of a Bitcoin address (the hash of the public part of a key). (maybe the new address will be 1024 + 8 character long)

This security patch will be released well before a quantum computer is developed to a stage that can attack it.  For anyones bitcoins to remain secure, they will need to 'spend' the coins to the new secure addresses.

Since 'lost' coins cannot be 'spent,'  they will on day be collected (and moved to new secure addresses) by somebody who can take the effort to crack the old (insecure) addresses.

Once, quantum computers become common, bitcoin could even use cypto that requires quantum computers to do the calculations, otherwise it would be prohibitory slow.
legendary
Activity: 1246
Merit: 1014
Strength in numbers
lost coins will eventually be recovered when quantum computers become large enough... as the rest of the network will have already moved all the active coins to stronger addresses well before that time.  Grin

But that may be at least 40 years in the future.

Do you think there will be a period where bitcoin is still used, but big accounts are getting 'sniped' by fast computers? I guess with certain assumptions it might be possible. It's funny to think about the protections people would take, splitting down coins to many addresses to avoid being targeted, maybe moving them around quickly (might not help I guess).
legendary
Activity: 1222
Merit: 1016
Live and Let Live
lost coins will eventually be recovered when quantum computers become large enough... as the rest of the network will have already moved all the active coins to stronger addresses well before that time.  Grin

But that may be at least 40 years in the future.
legendary
Activity: 1246
Merit: 1014
Strength in numbers
Some idiot loses his wallet. My wallet becomes worth more. No problem!  Cheesy

For bonus points, can you tell us how this info is transmitted? Smiley

How long does it take for your wallet to be worth more?
It's hard to say how long deflation would take to kick in.  It depends on many variables not easily quantified.  Hell, even though we know, for example, roughly how much larger the USD money supply is today compared to several years ago, its effect on inflation hasn't really been seen.  The economy will have to pick up a lot more in order to create a sufficiently-high-enough increase in demand in order for us to see inflation.

Yes, I think I understand it, but it is pretty tricky to explain imo. You will essentially 'notice' it when those coins would have been bidding against you for something, but now they aren't and this lack of competition will happen over and over.
hero member
Activity: 726
Merit: 500
Some idiot loses his wallet. My wallet becomes worth more. No problem!  Cheesy

For bonus points, can you tell us how this info is transmitted? Smiley

How long does it take for your wallet to be worth more?
It's hard to say how long deflation would take to kick in.  It depends on many variables not easily quantified.  Hell, even though we know, for example, roughly how much larger the USD money supply is today compared to several years ago, its effect on inflation hasn't really been seen.  The economy will have to pick up a lot more in order to create a sufficiently-high-enough increase in demand in order for us to see inflation.
administrator
Activity: 5110
Merit: 12475
For bonus points, can you tell us how this info is transmitted? Smiley

How long does it take for your wallet to be worth more?

People find it more difficult to obtain bitcoins because fewer bitcoins are being sold/traded. The price is then raised because demand has stayed the same (or risen), but supply has been reduced.

How long it takes depends on how the person was using the coins previously. If they were actively trading, the market will notice immediately. If they were saving for a short period or trading only occasionally, it might take a few months. If they were hoarding for a long period of time, the market might have already adapted to the loss of the coins from circulation.
newbie
Activity: 19
Merit: 0
Allowing this weakness to persist just because of the individual gain incurred by deflation is callous and corrosive to the system as a whole.

One need not be "stupid" to have an ill-timed (redundant?) house fire, or be the subject of a clever coordinated attack.

The system at the very least needs a way to liberate lost coins.

Coins that stay dormant for say 100 years are divided up among all current users? Is something like that possible? Ideally the problem should be obviated in some way, but as I say in the following post, those most capable of solving the problem are those least motivated to do so.

It's exactly why trickle down was laughable.

Related: https://bitcointalksearch.org/topic/m.33326
legendary
Activity: 1246
Merit: 1014
Strength in numbers
Some idiot loses his wallet. My wallet becomes worth more. No problem!  Cheesy

For bonus points, can you tell us how this info is transmitted? Smiley

How long does it take for your wallet to be worth more?
donator
Activity: 826
Merit: 1039
Just randomly generating a key that was lost and held lots of money
But of course there's no way to know that it is a lost key that was generated. It's more likely to be a key that someone else still holds but hasn't yet used to spend the associated bitcoins.

Anyway, the odds of that happening are so microscopically small that I'm not going to lose sleep over it. Also, I understand that a distributed system like Bitcoin can't have a central way to prevent duplicate keys, so I accept it on a philosophical level too.
legendary
Activity: 1372
Merit: 1007
1davout
Bitcoins are never lost. just that the key is lost in the ocean somewhere.

One day, some guy might get very very very lucky to find a key to a vault full of bitcoin.

You mean by brute-forcing private key of the wallet owner or what ?

Just randomly generating a key that was lost and held lots of money
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