25

You run bitcoin as a service on your local computer. What happens if this computer is compromised? A corrupt/failed hard drive or theft leads to the machine being lost and unrecoverable, and my bitcoin details (addresses etc) are gone. Do my bitcoins disappear into the ether?

i.e. What happens to my bitcoins if my wallet file is compromised/lost?

  • this could be easly fixed by using a online server. we would nee to login with a account to our wallets then the wallet syncs our data with a encrypted server. – user4933 May 10 '13 at 9:12
27

If a wallet file is truly lost with zero ability to recover it, then the coins it contained are lost forever. Think of it as cash left in a burning house.

Be sure to periodically backup your wallet.dat file. It is best to also encrypt those backups lest they be compromised giving someone else access to your wallet.

  • Note that a one-time backup will suffice for most current users. A fresh backup is only required once you've used up 100 Bitcoin addresses. – ripper234 Aug 30 '11 at 23:15
  • 4
    Make that a one-time, tested backup where only tested addresses are used, and the encrypted backup is stored many different times in different places like gmail, dropbox, under your mattress, in your safe, etc. – eMansipater Aug 30 '11 at 23:24
  • 2
    The only possible exception would be if at some point in the future a way to recover lost coins is added to the protocol. That's purely speculative, and even if it was, such schemes would tend to give the coins to the miner that mined a block in the far future. – David Schwartz Sep 1 '11 at 10:33
  • And the other bitcoins remaing on the economy becomes more rare, so more valuable right? – John John Pichler Sep 20 '13 at 16:57
  • @EdPichler yes that is the net effect, monetary deflation, fewer Bitcoins in circulation. However, as others point out no one "knows" the Bitcoins are destroyed, so no one can (or should) account for them as out of circulation. – Joshua Kolden Jan 26 '14 at 22:44
18

Your coins still exist, but your ability to use them is gone. No one knows this, as they still appear to be perfectly valid. And, in fact, if you ever recovered your wallet somehow (say you discovered a backup on a USB key somewhere), you could then spend them.

  • 2
    +1 for pointing out that no one would know they were lost. – o0'. Sep 13 '11 at 19:15
  • this is cool, collaborative editing. thanks David. – molecular Sep 14 '11 at 8:27
12

The Bitcoins never disappear, but if you lose your wallet, then you lack the keys necessary to actually use those Bitcoins. So although the coins do not disappear, they are effectively removed from the economy since you cannot spend them. This is why it is important to backup your wallet.

5

Yes.

This is because of the decentralized nature of Bitcoin. You are the master of your own private keys. With great freedom comes great responsibility.

You have to come up with your own precautions.

-3

If bitcoin continues without a solution to this little problem, it will be the undoing of the system. If enough people loose their wallets, bye-bye bitcoin. It's gone. It's a ledger of transactions recording anonymous losses.

Bitcoin is not as durable as everyone is claiming. If a paper dollar gets torn, the banks take it out of circulation and replace it. If it gets lost in a landfill, the money pool is expanding and it's no great loss. With Bitcoin, the only thing to do to compensate for a loss is to further divide the currency. I love the sound of buying something for a femto-bit.

  • @Lohoris That's not the real reason. Let's assume all coins are lost and none are in circulation. As long as enough people agree by downloading the new client, the protocol (21m cap) could always be changed. – Pacerier Jun 18 '12 at 2:06

protected by Nate Eldredge Dec 8 '17 at 15:09

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