I think it was around 2009-10 when I read about mining bitcoins on Slashdot and decided to give it a go on my home computer. I setup the software and let it run and do it’s thing, I can’t remember exactly, but I think I mined a little over 2 bitcoins. It 2 plus some fraction, I can’t remember exactly. This was at a time where they were pretty worthless and more of a experimental tech thing than something that would actually take hold and it was easy for someone to mine them on a home computer. I remember when they hit $1 and I thought that was crazy. If $2 was worth it to go through the trouble to sell mine, I would have, but it wasn’t easy to cash them out so I held on to them.
Well I stopped the mining software eventually due to lack of interest and sometime later upgraded my laptop hard drive to an SSD and I can’t remember what I did with the old HD that contained all my bitcoin data and probably couldn’t find it.
So now that bitcoin is at some insane price, I’ve started to wonder where this HD is. But say I never find it, what happens to my 2+ bitcoins? Do they just disappear or do they “expire” after sometime?
Lost Bitcoins are just like other lost/destroyed items. Burn up a $20 bill, drop a gold coin into a volcano, trash your original copy of Action Comics#1? They’re gone.
Like a coin dropped in a sewer, the bitcoins still exist. If someone somehow were to make an incredibly, ludicrously, lucky guess as to what the private key was of a wallet that they saw receive coins on the blockchain ledger, then they could redirect those coins and presumably get value for them. But the reason the system is secure is that the likelihood of being able to do that intentionally is incredibly, ludicrously, low. It’s probably more likely that the coins become accessible by the cryptography being broken some point in the future, which would make the entire system worthless anyway. Nevertheless, the coins exist and in principle they can be spent. I’ve heard that there are hypnotists that are in business specifically to get people to remember how to access their bit coins, with their fee being a percentage of what gets recovered.
No, they go to heaven where the streets are paved with … Bitcoin. Sure they spend eternity being walked on but at least the feet are those of nice people.
This strongly implies to me that Bitcoin as a system has a finite lifespan. If there are a finite number of Bitcoins, and once lost they cannot be recovered, it would follow that a Bitcoin has a half-life of sorts, in that eventually it will be lost in some fashion. Maybe 25% of Bitcoins have been lost already. The rate is slowing down as the value goes up and people pay more attention, but there will inevitably be fires and deaths and what not that result in a gradual trickle of loss.
So what happens as the total number of bitcoins becomes grossly depleted? If there are only 10 bitcoins, does the system work just like before but with nanocoin transactions instead? Would it work with a single bitcoin?
It would be a neat problem to try to predict how long it will take for all bitcoins to be lost, like trying to predict how long it would take for you to be trapped forever if you were immortal. Do you look to historical examples of ephemera like comic books that once existed in the millions and had little value but are now rare? Estimate that a bitcoin will be lost once in every x thousand transactions?
The smallest unit is 0.00000001 coins. Even so, you are right about its unsuitability as a long-term system; even now, it is hardly scalable to replace Visa or Swift or even PayPal.
ETA sorry I have not addressed your statistical question: it is a valid Fermi question. You need some estimates of the number of users and their hardware failure rate (including printed-out backups of private keys), distribution of how many coins they have, etc
There have been from time to time proposals to fix various Bitcoin problems. These are highly contentious as you would imagine and have resulted in forks of various forms.
True; but keep in mind that if we ever build true quantum computers, those might be able to recover these lost bitcoins in a matter of seconds. (And with the side effect of making all bitcoins worthless-- since it’d also be able to recover bitcoins in legit wallets just as easily!) So the currency might eventually become useless regardless.
One way to determine the maximum number of lost coins is to audit the blockchain to determine how many have been inactive for a specific period of time. Obviously some of those are sitting in a wallet somewhere and the owner knows where they are and has the key for them, but you could make some educated guesses by looking at the timelines and transaction histories.
Assuming I understand the concept correctly, generating the same Bitcoin again wouldn’t mean you get to use it. Once it is created, it is put on the blockchain, and now they have a history of who owns it, linked with an ID. If they didn’t, then anyone who generated the same coin could then take it from the other owner. I believe that generating an old Bitcoin already can happen now, and those are just discarded, making the problem harder.
The issue with quantum computers is just in the encryption that is used to make sure the blockchain isn’t altered. If you can crack that encryption, then you could change the records.
But do note that quantum computers aren’t some magic bullet. It’s true that they can crack current encryption a lot faster, but that doesn’t mean you can’t just increase the amount and make it harder again. And there’s nothing preventing the open source Bitcoin from adding extra encryption to the system to make it harder.
I guess it’s also possible they find a quantum method to produce Bitcoin that actually makes it faster, and the increase in supply decreases the value. But that’s still not an issue of the old Bitcoin becoming worthless.