27

The price of bitcoin is affected by demand and scarcity. Scarcity decreases as more bitcoin are mined (up until the 21 million bitcoin limit is reached---this is the maximum number that can ever be mined), which decreases the price. Scarcity increases as coins are lost (e.g. through the destruction of a wallet), or just held indefinitely (e.g. the ~1 ...


10

As the answer by @MeshCollider states, those BTC are lost forever, altough there is one more thing I believe is worth of consideration. Cryptanalysis never get worse, it always get better with time. One day, the current algorithms used to secure bitcoin could get old and weak enough. It will probably be, as it typically is with cryptanalysis, a gradual ...


9

Most websites offering online wallets store your bitcoins against their own private key (giving them control over them), and provide you with tools to spend the bitcoins. While you don't have the private key, this means you don't really have bitcoins any more; instead, you have bitcoin-credits through the specific business you're dealing with. When such a ...


9

Miners (who will no longer be mining, but will be validating transactions in the blockchain) will earn transaction fees. What those fees amount to or are to be interpreted as are hypothetical at this point, but might be imagined to be a transaction cost that ensures the security of the ledger.


9

I've not touched a large part of my online wallet (two weeks), nor the paper wallets under my sink (two years), but they are by no means disappeared, idle or lost. There's really no way of telling, no matter how much thought is put into it. Some coins can be called lost, that is they don't have any associated private keys known, but there's no way of ...


6

I appreciate the enthusiasm of those who have answered this question. Everyone here clearly wants bitcoin to succeed, and so everyone is enthusiastic. I am enthusiastic, too. I am afraid, however, that this enthusiasm is coloring respondents' logic. Literally every response on this page (especially the highest ranked one) is wrong. In order for a ...


6

The math is clearly absurdly unrealistic because as there are fewer Bitcoins available, it becomes harder to lose them. So the rate of loss has to decay as the availability of Bitcoins goes down.


5

This is not addressed in Bitcoin's Whitepaper, although Satoshi Nakamoto briefly mentions the decrease of the reward, but never explicitly talks about the amount of the reward. Satoshi speak about the halving process since the release notes for Bitcoin v0.1 Alpha: Total circulation will be 21,000,000 coins. It'll be distributed to network nodes when they ...


5

If the transaction fees from miners are not sufficient to maintain the security of the ledger, than the network will self-destruct. But, with the cap being so-far away (who knows how many years) by then computing power should be sufficient to ensure the sanctity of the network with very very minimal costs (low power costs), it wouldn't surprise me if bitcoin ...


4

It is impossible to tell lost coins from stored coins, because there is not way to tell if anyone has the private key associated with a foreign address. The only coins that can realiably be declared lost are those that have been assigned to invalid recipient addresses.


4

Since the "ownership" of bitcoins is essentially tied to having knowledge of the private key for the address they are stored against, it's very difficult to prove that nobody knows the private key. However, it is possible to send bitcoins to an address with no private key, essentially destroying them. Details here: How to generate a valid bitcoin address ...


4

Are you suggesting that 0.5% relative to the still available bitcoins are lost every year or 0.5% of the absolute amount of bitcoins? Anyway, either my math is lying or each would turn out to be about 10% loss in 20 years, which doesn't translate to "all" in my opinion. Additionally, should the value of Bitcoin sufficiently increase (which would happen if ...


3

Yes it's possible to lose bitcoins forever. There are even ways to "provably destroy" them by sending them to an address that can't possibly have a private key.


3

You should check this related question. In summary: 1) A "lost bitcoin" is any unspent BTC balance in an account for which the private key has been lost. Without the private key, that balance cannot be spent again. If you lose your wallet file, you are effectively losing all the private keys for the accounts (addresses) created by that wallet. It doesn't ...


2

Understanding bitcoin price behavior with the Quantity theory of money M · V = P · Q Money supply times the Velocity of money equals the Price level times the Quantity of goods. Several arguments against the success of Bitcoin are doing the round: Bitcoin is a bubble, the present $1000+ price level bears no relation to the small bitcoin economy. People ...


2

If Bitcoin wallets get deleted, lost, or otherwise inaccessible, then the Bitcoins contained in them cannot be accessed anymore. There is no compensation for these "lost" Coins, and it is hard to see how there could be any such compensation. After all, nobody can prove that they lost some data. Hence any compensation scheme would likely be open to fraud. As ...


2

This question is based on a false assumption: Lost bitcoins are not returned into circulation. The problem is that one cannot distinguish lost bitcoins from saved/stored bitcoins, as it is impossible to prove that nobody has the private key to a given address.


2

Yes, pretty much the only way to know coins are lost is through someone making the information public by declaring they no longer have access to the private key. Otherwise they would just look like someone who hasn't moved their coins if viewed on the blockchain. There's actually a limit at the current moment of 21 million bitcoins. So technically losing 1 ...


2

Such a chart is trivial to create yourself by scraping blockchain.info. The following bash script will do just that: #!/bin/bash END=$(date -d 'today 00:00:00' +%s) # Today 00:00:00 START=1354147200 # Midnight 2012/11/29 (days after reward halving) DIFF=86400 # Number of seconds in a day for i in $(seq $START $DIFF $END); do # Blockchain.info uses ...


2

The effect would be to make the remaining bitcoins worth more over time as the others remain unspent, as I understand it.


2

Yes, if he didn't have the private keys backed up anywhere else then indeed they are lost forever. You are correct that more and more bitcoin is lost over time because of things like this.


2

It is never possible to determine which bitcoins have been lost, and which are merely being held unused. In either case, it means they are effectively removed from the economy. This means that they aren't being offered for sale on an exchange, nor being offered in exchange for goods and services. This creates scarcity, and as economists tell us, scarcity (...


1

What about all the coins that have been locked in wallets due to loss of keys, owners of wallets dying, etc...? There is no way someone can tell you the exact amount of "locked" bitcoins. Even after looking into blockchain and building the system of how often bitcoins move from one wallet to another. There are many people who have bitcoins and sitting on ...


1

If you permanently loose your keys, the short answer is essentially yes. Your loss, a deflation, will cause the value Bitcoin being held by others to go up proportionately. With a 100% efficient quantum computer (not likely at all), the amount of energy required to brute force compute the private keys will cost ~$100M each in electricity (assuming 5 cents ...


1

Such a graph would be fairly boring I presume as the supply is currently 25 BTC per 10 minutes. It's true that there's some variance and another factor is that it's actually 25 per a little less than 10 minutes because of the growth in hashing power. Bitcoinwisdom.com has a graph that shows the average time between blocks which is inversely proportional to ...


1

There is currently a bounty offered on BitcoinTalk for implementing a method that would add bitcoins back to the mining reward in the case that an address had no activity for over 50 years which would completely resolve this concern. The post can be found here and is located at #3 on the list https://bitcointalk.org/index.php?topic=371601.0


1

I think that 'lost' coins will only increase the value of Bitcoin (good for holders). Less coins = more competition for those coins that are still in circulation. All in all, the bitcoin cap is simply a number. The price of bitcoin in USD is completely relative to the demand of bitcoin since bitcoin can be broken up indefinitely. There could only be 10 ...


1

Bitcoins are typically lost (as in, inaccessible to humanity, rather than via theft) by the owner losing access to their wallet (ie their wallet.dat file gets corrupted and they have no backups), or accidentally transferring their coins to the wrong address. In either case, coins are contained in an address that nobody knows the private key to. The coins ...


1

Bitcoins can be divided up infinitely. So if there was just one bitcoin left (the rest are lost) then there can still be a viable economy with fractions of bitoins. Lost wallets are only a problem for the people who lost them, not for bitcoin. It would of course limit supply and push the the cost of bitcoins versus other currencies.


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