My question is 2 part:
1. How does somebody know that a set of bitcoins is lost? Merely declaring that I've lost my private key and hence bitcoin makes the coins lost?
2. What impact(and why?) would be on the price of bitcoin if I lose a huge amount of bitcoin today? Say 1 billion?
If you never traded bitcoins(just hold them), market can not know that you lost them.
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Market feels that there is lack of bitcoins. For example when there is a presure to buy with the big number of lost bitcoins price will go higher. – Sebastian Xawery Wiśniowiecki Dec 9 '15 at 10:42
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@XaweryWiśniowiecki: Still, market cannot distinguish coins that are in cold storage from coins that have been lost. – Murch♦ Dec 9 '15 at 13:07
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But smaller amount of bitcoins on the market will make the price higher in bull-time and slower price falling in bear-time – Sebastian Xawery Wiśniowiecki Dec 9 '15 at 14:19