Topic: Will occasional losses of bitcoin wallets limit available maximum bitcoins? (Read 26881 times)
September 24, 2018, 03:31:29 PM
The inflation exploit recently uncovered in 0.15 and later versions, and still unpatched on a very large number of nodes, is a possible solution to the deflation problem.
May 24, 2011, 02:13:34 PM
I see no problem referring to microbitcoins and picobitcoins. Even my grandmother groks kilo, mega, giga, -liters, -meters, -bytes or bits. After all 50 BTC is already represented as:
Value: 5000000000
Value: 5000000000
January 20, 2011, 01:14:01 PM
I just found out about this thread.
The 21 millions problem ? Again ?
Just see the bitcoin as a measure unit. Does it make any difference if you get one ton of gold or one million grams ?
The 21 millions problem ? Again ?
Just see the bitcoin as a measure unit. Does it make any difference if you get one ton of gold or one million grams ?
January 19, 2011, 01:47:51 PM
Complete nonsense. The supply doesn't matter when you can divide forever. Even 1 BTC is enough to run the whole economy. It's just a fucking integer, for Eris' sake.
You're being hopelessly ignorant of how the mind actually works, and at this stage of the currency's propagation, perception is rather important.
https://bitcointalksearch.org/topic/m.34820 <---< this also
Also, please reframe (sic) from making such a gigantic post.
Oh I'm sorry am I pushing your minuscule attention span? Well I tell you what, you can just divide my post into nanoposts so it's easier to handle. It's just a #$%^ing integer for FSM's sake.
January 19, 2011, 11:51:02 AM
21 million for an entire global economy is ludicrously low to begin with when you think long term and large scale. Imagine trying to operate in an economy where a single penny will buy you an air craft carrier. You'd need the intellectual equivalent of a clean room and an electron microscope just to buy a pack of gum.
Complete nonsense. The supply doesn't matter when you can divide forever. Even 1 BTC is enough to run the whole economy. It's just a fucking integer, for Eris' sake.
Also, please reframe from making such a gigantic post.
January 19, 2011, 11:43:13 AM
Trading unpredictable central bank inflation for predictable annual coin loss seems like a good design decision to me.
But why pick between bad options when a perfect option can be created? God I am so tired of this blind slave consumer "only what's on the shelf" wysiwyg attitude.
But I don't think it's anything that needs to be worried about right now.
That's exactly the kind of thinking that got us into this economic mess in the first place. Now is precisely the time to think about it while the system is still small enough for real change to be adopted. The larger the number of people using the existing system the harder it will be to make sweeping updates.
What is the difference between lost coins, and coins that people have been saving for a long time?
None, it is mearly psychological.
Uhhhh, no. The difference is that lost coins are lost. That's like saying the difference between giving away a dollar and burning it is psychological. Man this really exposes the flawed thinking in people. This is the same logic that allows a baby to think the world has vanished when it's covered its eyes.
A lost coin has no potential to be spent, only potential to be stolen in some remote hypothetical future.
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.
Well, not without a forced address collision, but I'm presuming that we would wish to spend those coins before the sun burns out.
Exactly. And that's exactly the kind of thinking enemies of this system would use. When you're trying to destroy competition (traditional currency vs cryptocurrency) a scorched earth policy is acceptable, if not preferable.
Maybe I am missing something, but what exactly is the point of reintroducing lost coins?
Because when more than 4 people use this currency people aren't going to want share the remaining 2 coins out to 50 decimal places. A net wide wallet attack could reduce the total amount of coins to an absurdly low amount overnight. It's all well and good to talk about magic future computers and super updates and deflation value but the fact is the system right now is perceived to be vulnerable. Whether that perception is a result of ignorance is irrelevant.
21 million for an entire global economy is ludicrously low to begin with when you think long term and large scale. Imagine trying to operate in an economy where a single penny will buy you an air craft carrier. You'd need the intellectual equivalent of a clean room and an electron microscope just to buy a pack of gum.
Do you people not realize the heat that will come down the second this currency starts being used by people any large government feels like calling terrorists? Wake up.
http://imgs.xkcd.com/comics/security.png
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.
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.
First, if the system has a provision for liberating dormant coins then institutions will simply refresh them from time to time by moving them from one account to another.
Secondly, I don't care about the value of the coin if there is only one coin to go around. Do you understand how damaging to the perceived value of the system all those decimals places will be? The problem existing makes the whole thing look slipshod and unprofessional, regardless of the metaphisyical actuality of the situation. A currency only has value because we all agree it has value. Marketing concerns here are as real in this context as any other concern, and I for one will not use this system until these problems are addressed.
Thirdly, except print more? Where do you think inflation comes from? The controllers of the currency are strongly motivated to create more currency.
Don't use it.
*facepalm* Oh for the love of...
Here we go, the classic head burying, if you don't like it get out, intellectually/politically/ethically lazy motto. The real reason real changes to the system are already impossible. Because of entrenched defensive elitists. The same crowd (literally in some cases I have no doubt) that uses telnet to browse the Internet and thinks user friendliness is weakness. The digital crotchety Amish waving slide rules at the kids on their lawn.
I guess Rosa Parks should have just walked to work. Screw trying to fix the system right?
I'm so tired of that whole sycophantic and yet egotistical mentality.
It's called backing up and encrypting it.
It's called control being an illusion. This is the exact same logic that people who don't wear helmets and seat belts use to disastrous effect. "I'll just be careful, I don't need basic safety precautions." Please.
Such a mechanism would make bitcoin network unnecessary more complex.
Right, because it's not necessary to address a basic, widespread, and obvious concern during the infancy of a currency you're trying to get people to adopt. >.>
I'm not going to literally bet my life savings on my ability to out-tech the entire hacker community; regardless of what color their hat is. And neither will anyone else with any rational understanding of reality.
Anyway, this is not really a problem, because modern banks all use electronic currencies already, and if their computer systems failed, people would lose money the same way as they would lose bitcoins...
No, because the currency actually exists somewhere in some form. One person losing access to their funds is not that same as the currency being effectively annihilated in all cases as it is under bitcoin. And so long as I have to be have a masters in comp sci (public perception, regardless of how easy you think things actually are) just to buy a loaf of bread I'll avoid the currency.
Also, new, better clients will be created with built-in multiple automatic wallet backups & data redundancy (or it will be implemented in the default client). So the losing of a wallet will become less common.
No they won't for the same reasons everyone here is basically talking smack to those with concerns right now. As the system grows resistance to change and intractability will as well. It will be like trying to convert America to metric. Those with a desire for user friendliness and security will be called newbs and lamers and the techno Luddites will run the show like always seeing to it that we all remain in the digital dark ages to preserve their own profit margin.
And if you don't see that mechanism at work already in virtually every other area of technical endeavor well I just don't think there's help for you.
Personally i simply double-backup my whole partition every day (weird RAID configuration).
Also, i backup my wallet on a pendrive every longer period of time.
Also, i backup my wallet on a pendrive every longer period of time.
Can an older wallet file be used to partially recover funds?
I was under the impression that after so many transactions are made older backups were rendered worthless.
If loss of a current wallet file only means loss of funds since last backup, and not loss of all funds then much of my concern is alleviated since I could at the very least print my wallet file once a year and physically secure it.
Not that I would actually do that for the same reason I don't buy gold and bury it, but I like having the option.
I don't see how people working for free could hurt society.
I'm sure American blacks in the pre-civil war era would disagree.
But seriously. The point isn't to evade damage to society, but to address legitimate concerns with the system to foster adoption.
I'm not using the currency till they are addressed. My labor has the same value regardless so I can afford to wait. I don't feel like dedicating a computer to the creation of new coins. It's just a currency and I'll use whatever one I judge is best until things change. The question is, how many other people will judge bitcoin too risky, and will that number be significant enough to A. force changes to the system. B. Damage the perceived value of bitcoin (and other cryptocurrency schemes) sufficiently to sink it/them.
January 16, 2011, 03:26:48 AM
Money is a way to transfer value.
You give a service or goods to someone, and you receive money which you expect to be able to give back later in exchange for some other good or service. It's nothing but a convention between people. Therefore, all money you own is some kind of a debt society has towards you.
If you lose money, you relieve society from this debt. It's just as if what you did to obtain this money, you did it for free.
I don't see how people working for free could hurt society.
January 16, 2011, 02:40:23 AM
had a back of the envelop calculation: if the loss rate is 10% per annual, it will take 21 years to reach the 1/10 mark, which can be compensated by moving the decimal point one digit to the right. Not too bad indeed.
I seriously doubt that 10% of gold/silver/platinum bullion is lost every year...
Once people understand that bitcoin is a hard money & a commodity, they will protect it with their lives, the same as they do with normal bullion. Therefore, i think that 10% may be probable for the first few years of bitcoin adoption, and when masses understand the power of bitcoin, the loses will fall to 3% or less.
I agree.
Another difference is that when gold or silver are 'lost' it simply means "expensive to recover, we'll get it later when it's easier or when it's more valuable". It's pretty rare for gold to be transmogrified into lead or something, it usually just gets lost in the water to be found later.
This is the case with bitcoin, too--the recovery cost is in the number of cpu cycles required to find the private keys for the old addresses, which gradually becomes cheaper over time for "lost" bitcoins in proportion to available cpu power with the growth of technology(not so for held bitcoins, which can be continually upgraded to a higher key size alongside technological growth).
January 14, 2011, 01:28:24 AM
had a back of the envelop calculation: if the loss rate is 10% per annual, it will take 21 years to reach the 1/10 mark, which can be compensated by moving the decimal point one digit to the right. Not too bad indeed.
I seriously doubt that 10% of gold/silver/platinum bullion is lost every year...
Once people understand that bitcoin is a hard money & a commodity, they will protect it with their lives, the same as they do with normal bullion. Therefore, i think that 10% may be probable for the first few years of bitcoin adoption, and when masses understand the power of bitcoin, the loses will fall to 3% or less.
I agree.
Another difference is that when gold or silver are 'lost' it simply means "expensive to recover, we'll get it later when it's easier or when it's more valuable". It's pretty rare for gold to be transmogrified into lead or something, it usually just gets lost in the water to be found later.
January 13, 2011, 11:11:08 PM
Personally i simply double-backup my whole partition every day (weird RAID configuration).
Also, i backup my wallet on a pendrive every longer period of time.
Also, i backup my wallet on a pendrive every longer period of time.
January 11, 2011, 09:56:05 PM
Well I never loosed my wallets but, if some of you say that "there is no recovery", then maybe in the time of the coins creation there is a limitation of available max. bitcoins since there's a loss. (of course quantitatively.)
January 07, 2011, 04:54:34 AM
had a back of the envelop calculation: if the loss rate is 10% per annual, it will take 21 years to reach the 1/10 mark, which can be compensated by moving the decimal point one digit to the right. Not too bad indeed.
I seriously doubt that 10% of gold/silver/platinum bullion is lost every year...
Once people understand that bitcoin is a hard money & a commodity, they will protect it with their lives, the same as they do with normal bullion. Therefore, i think that 10% may be probable for the first few years of bitcoin adoption, and when masses understand the power of bitcoin, the loses will fall to 3% or less.
----
EDIT:
Also, new, better clients will be created with built-in multiple automatic wallet backups & data redundancy (or it will be implemented in the default client). So the losing of a wallet will become less common.
January 07, 2011, 12:33:47 AM
There is nothing to worry about. Just feel sorry for the suckers who loose their wallets. 
contrary to common belief on this forum; there is a damage done to the Bitcoin economy when on looses his or her Bitcoins to the either.
If somebody is capable earning Bitcoin, then they will be more likely to re-invest those Bitcoins effectively, thus growing the Bitcoin economy faster than the natural deflation cause by lost coins.
However, as coins get worth more, the number lost will lessen.
contrary to common belief on this forum; there is a damage done to the Bitcoin economy when on looses his or her Bitcoins to the either.
If somebody is capable earning Bitcoin, then they will be more likely to re-invest those Bitcoins effectively, thus growing the Bitcoin economy faster than the natural deflation cause by lost coins.
However, as coins get worth more, the number lost will lessen.
January 06, 2011, 11:36:10 PM
had a back of the envelop calculation: if the loss rate is 10% per annual, it will take 21 years to reach the 1/10 mark, which can be compensated by moving the decimal point one digit to the right. Not too bad indeed.
January 06, 2011, 11:21:35 PM
Anyway, this is not really a problem, because modern banks all use electronic currencies already, and if their computer systems failed, people would lose money the same way as they would lose bitcoins...
I haven't heard any incidents that depositors lost all their money because their bank's computer failed... and there's always a FDIC to fall back on.The more I think about this, the more scenarios I can think of:
1. File or machine corruptions
2. Some % of new users will abandon their bitcoin wallets or bank accounts, along with whatever balance in them.
3. If there's an error in the address, payment is sent to a "no man's land", the BTCs are essentially lost forever.
My ballpark estimate is there will be 5%~10% bitcoins disappear from circulation every year and this will create significant deflation pressure, once the generation curve flattens.
January 06, 2011, 09:40:01 PM
Backing up your wallet after every transaction is pure madness. Consider small marketplaces or "banks", that might receive several transactions per minute. If their server goes boom, the wallet and the backup might be both gone.
On Linux/UNIX there are network filesystems such as NFS and CODA, which can give you multiple backups on many servers at once. Everything everywhere cannot just go "boom" all in the same time.
Not saying about ZFS, SAN/RAID disk arrays, and lots of other technologies which give you multiple data redundancy. You can have as many backup servers as you want... possibilities are endless.
Anyway, this is not really a problem, because modern banks all use electronic currencies already, and if their computer systems failed, people would lose money the same way as they would lose bitcoins...
January 06, 2011, 09:04:58 PM
Backing up your wallet after every transaction is pure madness. Consider small marketplaces or "banks", that might receive several transactions per minute. If their server goes boom, the wallet and the backup might be both gone.
You don't have to back up after every transaction. You only have to back up every 100 sends or address creations. And if you set keypool=10000, you only have to back up every 10000 sends/keys.
January 06, 2011, 09:02:11 PM
Backing up your wallet after every transaction is pure madness. Consider small marketplaces or "banks", that might receive several transactions per minute. If their server goes boom, the wallet and the backup might be both gone.
EDIT: Sorry for not finding this before, it's explained on http://en.bitcoin.it/wiki/Securing_your_wallet
So, if I understand correctly, if you backup your wallet every 100 address creations or transactions, you're just fine, right? This actually sounds reasonable, I must say. Almost more secure than physical wallet actually.
EDIT: Sorry for not finding this before, it's explained on http://en.bitcoin.it/wiki/Securing_your_wallet
So, if I understand correctly, if you backup your wallet every 100 address creations or transactions, you're just fine, right? This actually sounds reasonable, I must say. Almost more secure than physical wallet actually.
January 05, 2011, 10:23:30 AM
If you were really lucky they'd find something to charge you with. Perhaps a burnt out tail light on your car?
Damn, i really hate this as it is very common in my country.
You come to them asking for help, and you get your ass kicked instead.
What? Don't they work for you?
Not really. Not in this country...
If you don't get service that you like stop paying, they aren't going to force you to keep paying, they aren't the criminals.
/sarcasm
/sarcasm
If you stop paying, you go to jail. Closed loop.
January 01, 2011, 04:32:21 PM
If you were really lucky they'd find something to charge you with. Perhaps a burnt out tail light on your car?
Damn, i really hate this as it is very common in my country.
You come to them asking for help, and you get your ass kicked instead.
What? Don't they work for you? If you don't get service that you like stop paying, they aren't going to force you to keep paying, they aren't the criminals.
/sarcasm
January 01, 2011, 03:55:13 PM
If you were really lucky they'd find something to charge you with. Perhaps a burnt out tail light on your car?
Damn, i really hate this as it is very common in my country.
You come to them asking for help, and you get your ass kicked instead.
What? Don't they work for you? If you don't get service that you like stop paying, they aren't going to force you to keep paying, they aren't the criminals.
/sarcasm
January 01, 2011, 03:06:57 PM
If you were really lucky they'd find something to charge you with. Perhaps a burnt out tail light on your car?
Damn, i really hate this as it is very common in my country.
You come to them asking for help, and you get your ass kicked instead.
December 30, 2010, 03:22:56 AM
Too many adults still have a childlike faith in the abilities of the police.
Ain't that the truth.
The police here couldn't find their ass with both hands. They'd likely just have glazed-over eyes if you tried to report a stolen wallet.dat file.
If you were really lucky they'd find something to charge you with. Perhaps a burnt out tail light on your car?
December 30, 2010, 02:39:28 AM
Bill Gates would no longer be in the top ten most rich people list.
that should be fine if it's a result of the owner's fault, under other circumstances, if he's a victim of a crime (theft, sabotage, etc), most people will probably think not having a lost-coin recovery mechanism is a flaw.what's your coin recovery mechanism when someone breaks into your house and steals your stash of cash and valuables?
the 'stolen bitcoin' recovery mechanism is exactly the same.
Can you imagine going to the police today to report the theft of your wallet.dat
I would imagine that the end results would be the same as when I reported my stolen bicycle as a child. Too many adults still have a childlike faith in the abilities of the police.
December 30, 2010, 02:13:45 AM
Bill Gates would no longer be in the top ten most rich people list.
that should be fine if it's a result of the owner's fault, under other circumstances, if he's a victim of a crime (theft, sabotage, etc), most people will probably think not having a lost-coin recovery mechanism is a flaw.what's your coin recovery mechanism when someone breaks into your house and steals your stash of cash and valuables?
the 'stolen bitcoin' recovery mechanism is exactly the same.
Can you imagine going to the police today to report the theft of your wallet.dat
I would imagine that the end results would be the same as when I reported my stolen bicycle as a child. Too many adults still have a childlike faith in the abilities of the police.
December 30, 2010, 01:10:52 AM
Bill Gates would no longer be in the top ten most rich people list.
that should be fine if it's a result of the owner's fault, under other circumstances, if he's a victim of a crime (theft, sabotage, etc), most people will probably think not having a lost-coin recovery mechanism is a flaw.what's your coin recovery mechanism when someone breaks into your house and steals your stash of cash and valuables?
the 'stolen bitcoin' recovery mechanism is exactly the same.
Can you imagine going to the police today to report the theft of your wallet.dat
December 30, 2010, 12:17:52 AM
Bill Gates would no longer be in the top ten most rich people list.
that should be fine if it's a result of the owner's fault, under other circumstances, if he's a victim of a crime (theft, sabotage, etc), most people will probably think not having a lost-coin recovery mechanism is a flaw.what's your coin recovery mechanism when someone breaks into your house and steals your stash of cash and valuables?
the 'stolen bitcoin' recovery mechanism is exactly the same.
December 30, 2010, 12:11:28 AM
Bill Gates would no longer be in the top ten most rich people list.
that should be fine if it's a result of the owner's fault, under other circumstances, if he's a victim of a crime (theft, sabotage, etc), most people will probably think not having a lost-coin recovery mechanism is a flaw.Some will, certianly. Those people can stick to paypal, or buy insurance. Not that a sum as large as what Bill Gates could hold in bitcoin is insurable, but it might for others. I expect that, eventually, bitcoin banks and similar institutions a la Mybitcoin will have to be insured against liability losses in order to attract and keep customers, but the fees that they charge will have to be low enough to compete with the cost of regular bitcoin transactions, as a well managed personal client with encrypted backups is as good a form of prevention of loss as can be insured against for most people with the good sense to accumulate any notable sum.
Sorry about the long sentence, btw. That's just how long it needed to be.
December 30, 2010, 12:06:19 AM
Bill Gates would no longer be in the top ten most rich people list.
that should be fine if it's a result of the owner's fault, under other circumstances, if he's a victim of a crime (theft, sabotage, etc), most people will probably think not having a lost-coin recovery mechanism is a flaw.Such a mechanism would make bitcoin network unnecessary more complex.
December 30, 2010, 12:04:50 AM
Bill Gates would no longer be in the top ten most rich people list.
that should be fine if it's a result of the owner's fault, under other circumstances, if he's a victim of a crime (theft, sabotage, etc), most people will probably think not having a lost-coin recovery mechanism is a flaw. December 29, 2010, 09:39:52 PM
Let's say bitcoin has been widely adopted, the wallet.dat containing Bill Gate's net worth crashed (because his misplaced faith in Windows) and there's no way to recover the file; his foundation need this money to pay 10 million children's medical bill -- in another word, there's catastrophic/extraordinary consequence if the money cannot be recovered -- should there be a mechanism to deal with this kind of situations?
It's called backing up and encrypting it.
To add what kiba is saying, I would also suggest that (out of fear of assassination) Bill could encrypt his wallet with multiple keys such that his backed-up wallet could be decrypting with the combined requirements of (1) a cryptographic confirmation code for Bill's death certificate issued by his specified hospital/DRO/court/insurance provider, (2) one or more keys (depending on the specific terms of his particular will) of Bill's heirs, (3) Bill's lawyer.
Or for this case described above, I would think Bill's 10 million donation would be put in some sortof escrow, whereby there would be specific mechanisms (think *smart contracts*) where the money could be dispersed automatically in monthly .1 million increments. No need to keep a human around, right? Cut out the points of failure from dumb human operators.
sorry but the dumb operator has been backing up the wrong file ... a low probability event, just wondering what if it really happens.
Sorry, but a dumb government operator just pressed the red 'nuke' button accidentally.
Sorry, but a dumb government person just lost the physical key to the US Bullion Depository.
Ok, but seriously, we can do a thought experiment. If some rich dude's gold stock pile suddenly disappears from the face of this earth (by some black hole or anti-matter), then what happens? Well...obviously that rich dude wouldn't be able to spend as much, so the overall aggregate demand curve for society would likely decrease by a small amount. This would cause the equilibrium supply-demand price point to drop a very small amount for all goods in society that that rich dude would have demanded.
December 29, 2010, 09:24:55 PM
Let's say bitcoin has been widely adopted, the wallet.dat containing Bill Gate's net worth crashed (because his misplaced faith in Windows) and there's no way to recover the file; his foundation need this money to pay 10 million children's medical bill -- in another word, there's catastrophic/extraordinary consequence if the money cannot be recovered -- should there be a mechanism to deal with this kind of situations?
It's called backing up and encrypting it.
Bill Gates would no longer be in the top ten most rich people list.
December 29, 2010, 08:36:58 PM
Let's say bitcoin has been widely adopted, the wallet.dat containing Bill Gate's net worth crashed (because his misplaced faith in Windows) and there's no way to recover the file; his foundation need this money to pay 10 million children's medical bill -- in another word, there's catastrophic/extraordinary consequence if the money cannot be recovered -- should there be a mechanism to deal with this kind of situations?
It's called backing up and encrypting it.
December 29, 2010, 07:43:33 PM
Let's say bitcoin has been widely adopted, the wallet.dat containing Bill Gate's net worth crashed (because his misplaced faith in Windows) and there's no way to recover the file; his foundation need this money to pay 10 million children's medical bill -- in another word, there's catastrophic/extraordinary consequence if the money cannot be recovered -- should there be a mechanism to deal with this kind of situations?
It's called backing up and encrypting it.
December 29, 2010, 07:35:55 PM
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?
Let's say bitcoin has been widely adopted, the wallet.dat containing Bill Gate's net worth crashed (because his misplaced faith in Windows) and there's no way to recover the file; his foundation need this money to pay 10 million children's medical bill -- in another word, there's catastrophic/extraordinary consequence if the money cannot be recovered -- should there be a mechanism to deal with this kind of situations?
or like the movie Gold Finger, some organized crime purposely steals and destroys (loses) all the bitcoin stored in Fort Knox; all the sudden, their stash of bitcoins becomes much more valuable. This will be much more feasible than the plot in the movie.
December 29, 2010, 07:23:34 PM
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?
Let's say bitcoin has been widely adopted, the wallet.dat containing Bill Gate's net worth crashed (because his misplaced faith in Windows) and there's no way to recover the file; his foundation need this money to pay 10 million children's medical bill -- in another word, there's catastrophic/extraordinary consequence if the money cannot be recovered -- should there be a mechanism to deal with this kind of situations?
December 29, 2010, 01:23:03 PM
Quote
Don't use it.
Yup. December 29, 2010, 07:57:32 AM
Quote
Thirdly, the U.S. likewise does not care about lost coins.
The U.S. does not care about lost coins because it introduces new coins at a rate sufficient to compensate.The actual quantity of paper bills and metal coins in circulation is market driven.
If all of us decide to cut up our credit cards, withdraw our savings from the banks in cash, and pay cash for everything, then they just print more bills and mint more coins.
If a month later, we reverse our decision and return a huge mountain of paper and coin to banks for deposit, they burn the bills and melt down the coins or put them aside out of circulation.
Do you really believe this?
Quote
Bitcoin needs to decide whether it is an alternative medium of exchange, or an alternative long term store of wealth.
Bitcoin is a medium of exchange first, but if some among us choose to save in it, that is their business. There is no conflict there.
Quote
It is way too young and fragile to provide a reliable long term store of wealth; so it necessarily will raise and fall on its suitability as a medium of exchange.
A suitable medium of exchange needs to hold its value relatively stable over the short term. If the market price of some good or service, specified in some currency unit, rises or falls noticeably, it should mostly be because of something to do with that good or service, not with a recent surplus or shortage of the currency unit, relative to the demand for that currency by the current economic activity.
A suitable medium of exchange needs to hold its value relatively stable over the short term. If the market price of some good or service, specified in some currency unit, rises or falls noticeably, it should mostly be because of something to do with that good or service, not with a recent surplus or shortage of the currency unit, relative to the demand for that currency by the current economic activity.
Relative to what? The value of the US dollar floats also, and is quite volatile considering it's base economic size. Bitcoin's relative value will settle down once the inflation rate and adoption rate mature in a few more years.
Quote
As FOFOA notes in http://fofoa.blogspot.com/2010/12/windmills-paper-tigers-straw-men-and.html :
Quote
the money supply needs to be able to react to the demand on money freely.
There is more than one way to accomplish this end.
Quote
One of the essential and defining properties of bitcoin is that it not so react. After an initial buildup, its supply is permanently capped and in the long run, declining at a gradual and slow rate, regardless of overall economic activity. This is a property perhaps suitable to a long term store of wealth, not a medium of exchange.
I don't think this works.
I don't think this works.
Don't use it.
December 29, 2010, 07:06:46 AM
The bitcoin is divisible, easily to 8 places and it is possible to patch it to do more later on. You don't need higher and higher amounts, but you may need more and more units, we have that.
FOFOA is great, I wonder when he'll write about bitcoin.
FOFOA is great, I wonder when he'll write about bitcoin.
December 29, 2010, 06:33:20 AM
Quote
Thirdly, the U.S. likewise does not care about lost coins.
The U.S. does not care about lost coins because it introduces new coins at a rate sufficient to compensate.The actual quantity of paper bills and metal coins in circulation is market driven.
If all of us decide to cut up our credit cards, withdraw our savings from the banks in cash, and pay cash for everything, then they just print more bills and mint more coins.
If a month later, we reverse our decision and return a huge mountain of paper and coin to banks for deposit, they burn the bills and melt down the coins or put them aside out of circulation.
Bitcoin needs to decide whether it is an alternative medium of exchange, or an alternative long term store of wealth.
It is way too young and fragile to provide a reliable long term store of wealth; so it necessarily will raise and fall on its suitability as a medium of exchange.
A suitable medium of exchange needs to hold its value relatively stable over the short term. If the market price of some good or service, specified in some currency unit, rises or falls noticeably, it should mostly be because of something to do with that good or service, not with a recent surplus or shortage of the currency unit, relative to the demand for that currency by the current economic activity.
As FOFOA notes in http://fofoa.blogspot.com/2010/12/windmills-paper-tigers-straw-men-and.html :
Quote
the money supply needs to be able to react to the demand on money freely.
One of the essential and defining properties of bitcoin is that it not so react. After an initial buildup, its supply is permanently capped and in the long run, declining at a gradual and slow rate, regardless of overall economic activity. This is a property perhaps suitable to a long term store of wealth, not a medium of exchange.
I don't think this works.
December 29, 2010, 04:56:14 AM
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.
December 29, 2010, 04:00:40 AM
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?
December 29, 2010, 03:24:41 AM
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?
December 29, 2010, 12:41:31 AM
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?
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.
December 28, 2010, 11:24:15 PM
What is the difference between lost coins, and coins that people have been saving for a long time?
None, it is mearly psychological.
December 28, 2010, 10:59:47 PM
What is the difference between lost coins, and coins that people have been saving for a long time?
December 28, 2010, 09:37:44 PM
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?
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.
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.
December 28, 2010, 08:25:19 AM
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?
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.
December 27, 2010, 01:49:01 PM
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.
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
December 27, 2010, 09:37:46 AM
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.
December 27, 2010, 01:23:40 AM
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.
December 27, 2010, 01:02:24 AM
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. 
But that may be at least 40 years in the future.
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).
December 27, 2010, 12:53:55 AM
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.
But that may be at least 40 years in the future.
But that may be at least 40 years in the future.
December 27, 2010, 12:08:54 AM
Some idiot loses his wallet. My wallet becomes worth more. No problem!
For bonus points, can you tell us how this info is transmitted?
How long does it take for your wallet to be worth more?
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.
December 26, 2010, 11:41:05 PM
Some idiot loses his wallet. My wallet becomes worth more. No problem!
For bonus points, can you tell us how this info is transmitted?
How long does it take for your wallet to be worth more?
December 26, 2010, 09:29:28 PM
For bonus points, can you tell us how this info is transmitted?
How long does it take for your wallet to be worth more?
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.
December 26, 2010, 09:24:22 PM
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
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
December 26, 2010, 09:12:55 PM
Some idiot loses his wallet. My wallet becomes worth more. No problem!
For bonus points, can you tell us how this info is transmitted?
How long does it take for your wallet to be worth more?
December 26, 2010, 04:18:00 AM
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.
December 25, 2010, 03:04:03 PM
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.
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
December 25, 2010, 02:59:45 PM
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.
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 ?
December 25, 2010, 02:45:32 PM
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.
One day, some guy might get very very very lucky to find a key to a vault full of bitcoin.
December 25, 2010, 08:48:15 AM
Too bad one cannot find someone else's lost wallet on the street. 
December 25, 2010, 05:08:12 AM
And this in a system that is naturally deflationary to begin with! Isn't this a pretty huge systemic problem?
Most people in the Bitcoin community think that deflation is actually good for the economy.
The last three months we've already had massive deflation (approx. -75%) and the Bitcoin economy is doing fine.
See:
https://en.bitcoin.it/wiki/Deflationary_spiral
Also, the deflation from losing wallets is going to be negligible compared to deflation from new users joining.
Unlike credit cards, Bitcoin feels like real money to people, and I think that most users treat a wallet.dat file differently to just any data stored on their harddisk. I would be very surprised if many people who own more than few hundred BTC don't keep at least one backup of their wallet.
December 25, 2010, 03:41:17 AM
Some idiot loses his wallet. My wallet becomes worth more. No problem!
December 25, 2010, 02:44:54 AM
Bitcoins that are lost are lost forever. No it doesn't recover. It is "natural deflation".
Sorry to bump this old thread, but it seemed mildly less obnoxious than starting a new one on an already-discussed topic. This problem was actually my first thought when I heard about bitcoin--given that wallets are often stored on run-of-the-mill computers, and that a huge proportion of computers crash without proper backups in place, won't the resulting deflation be quite significant? Even if it's just small amounts lost by reckless users(think digital equivalent of teenagers losing spare change due to holes in pockets), this would add up fast if bitcoin were in widespread use. And this in a system that is naturally deflationary to begin with! Isn't this a pretty huge systemic problem?
July 13, 2010, 06:40:34 PM
Well, if in some case EVERYONE loses their coins, they can just start the whole coin generation process all over again.
April 14, 2010, 07:55:04 PM
Bitcoins that are lost are lost forever. No it doesn't recover. It is "natural deflation".
April 14, 2010, 07:06:17 PM
What happens if somebody has some data issue and completely loses their bitcoin wallet for good? Will this mean the bitcoins that they had would be lost permanently from the potential maximum bitcoin money supply? Then as this happens occassionaly, the maximum bitcoin money supply shrinks.
As this happens over time, will it destroy bitcoin or can bitcoin recover?
As this happens over time, will it destroy bitcoin or can bitcoin recover?
Jump to: