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I still don't understand what happens after all the bitcoins have been mined. It seems to be designed to just fail eventually and be replaced, which I cannot r

I still don't understand what happens after all the bitcoins have been mined. It seems to be designed to just fail eventually and be replaced, which I cannot reconcile against the elegance of the rest of the design. To clarify: bitcoins can go away forever. About 6 years ago and had a wallet with a couple bitcoins in it. I have lost the key to that bitcoin wallet and if I can't find it, and noone else can find it, those bitcoins should be gone forever and irreversibly, right? If it were possible to recover the key to a wallet you dont own and spend coins that are not yours none of it would work. So, once there are no more new coins, eventually all the coins will be lost. Am I missing something?

CmdrSprinkles 10y ago
While not an expert (and actually something of a critic): I think the idea is that new bitcoins will be mined at a rate that will outstrip those lost. A LOT of the early coins were lost because they basically had no value. That was when mining was easy. Now, bitcoins have value and people are less likely to lose it. And mining is now harder. Similarly, we migrated from people keeping their wallets in a text file (money in a mattress) toward lots of sites like coinbase that basically give this Totally Free And Unregulated currency a system of banks. That further decreases the likelihood of money disappearing, especially if said banks start offering interest in exchange for being allowed to do loans. That resolves issues of people like me having some in a wallet that they are unlikely to ever collect/convert to fiat (not worth the hassle). So while bitcoin is likely to fail for MANY reasons, I don't think lost currency will be it (unless it is more stuff like that Japanese bitcoin bank that just went dark).
- niij 10y ago
  This is incorrect. Bitcoins will eventually all be moved. There is a limit on how many can be mined. At that point, the "miners" will no longer be finding new Bitcoins, but harvesting the transaction fees (which take computational power to verify)
  - CmdrSprinkles 10y ago
    And by the final saturation point the value should be known well enough (and the other infrastructure aspects I mentioned will be in place) that lost coins will be a negligible concern. An expansion of "exchanges" will help a lot as then you no longer have problems with abandoned wallets as the funds themselves can be used elsewhere until the owner decides to withdraw.
- tromp 10y ago
  > new bitcoins will be mined at a rate that will outstrip those lost The yearly loss is some small percentage, maybe between 1% and 3%. The yearly bitcoin mining production dips under 1% in another 3 halvings, or roughly in the year 2028.
m3ta 10y ago
Bitcoins can be split and divided up to 8 decimal points. You can own 0.00000001 BTC. Additionally, the software could be forked to allow division of BTC to a more granular amount than 0.00000001, meaning if all but 1 BTC were lost the entire world could still transact with that last singular BTC by dividing it up into smaller units.
- shuntress 10y ago
  So, eventually everyone will be trading with yocto-satoshis but I guess that doesn't really change anything. A little bit like how a 'Calorie' is actually a kilo-calorie.
- howardmilt 10y ago
  The problem is we don't really know what's lost and what's in storage. It could be that all those lost bitcoins are just sitting in someone's harddrive, waiting for moment to crash the market
  - m3ta 10y ago
    That is a similar but separate problem. It is admittedly a larger problem in particular for bitcoin and other currency systems with fixed supply.
  - shuntress 10y ago
    I think it is important to note that implementation of the currency is separate from its value. The system for trading ownership of bitcoins does not care for the value of that ownership. The value we, outside of the system used for logistics of trade, place on the bitcoins is then affected by their scarcity. To the system, it doesn't matter if the scarcity is caused by loss or by hoarding. But this can affect our valuations.
omio 10y ago
I don't think lost bitcoins are a big issue at the moment. I doubt all of them will get lost either. What happens when all are coins are minted isn't a big issue right now either. The big things that are in our face right now is block size, total blockchain size and control of core development. I think the latter is the biggest issue facing bitcoin today.
comboy 10y ago
Somebody already answered but for those pondering similar questions: https://en.bitcoin.it/wiki/Help:FAQ https://en.bitcoin.it/wiki/Help:FAQ (this one is also answered there)
aarreedd 10y ago
Currently miners get new Bitcoin plus a fee from all the transaction in the mined block. Once all Bitcoin is created, miners will still get the transaction fees. As Bitcoin becomes more popular, the transaction fees alone should be enough to incentives miners. And it is okay of coins are lost forever. If there are fewer Bitcoin available the price goes up. Simple supply and demand. Theoretically Bitcoin can be divided as small as needed to accommodate raising prices.
rebuilder 10y ago
The currency units are divisible, currently to 8 decimal places. If that becomes insufficient, more decimal places would presumably be added. Currently, if you take being able to count to a precision of the equivalent of 1 US cent, the BTC price would either have to go up 1000-fold or every 999 out of 1000 BTC issued would need to be lost for that to become necessary. Assuming I got my math right.
Nursie 10y ago
I guess that wasn't factored in. OTOH the designer was enamoured of a deflationary currency so perhaps he liked the idea of not only a cap but a slowly dwindling supply.
vbezhenar 10y ago
Why would all bitcoins be lost? Even if only one bitcoin left, you can divide it in billions of pieces. And when you've lost every piece but one, you can further divide it. It won't be lost forever, not until our universe will die, and long before that we probably will be able to break SHA-1 and mine lost bitcoins back.
- arik-so 10y ago
  Just to be pedantic: Bitcoin uses sha256, and not sha1.
- tromp 10y ago
  > mine lost bitcoins back Mining can only produce new bitcoins. To recover lost ones, you'd need to break elliptic curve signatures (and possibly RIPEMD160/SHA256 to recover a full public key from a non-spent address).
acveilleux 10y ago
You're missing a cottage industry finding exploitable bug in some bad bitcoin libraries' key generation or signing code that will then be used to recover private key and salvage formerly lost bitcoins that are now worth an absolute fortune through rarity.

CmdrSprinkles 10y ago

While not an expert (and actually something of a critic): I think the idea is that new bitcoins will be mined at a rate that will outstrip those lost. A LOT of the early coins were lost because they basically had no value. That was when mining was easy. Now, bitcoins have value and people are less likely to lose it. And mining is now harder. Similarly, we migrated from people keeping their wallets in a text file (money in a mattress) toward lots of sites like coinbase that basically give this Totally Free And Unregulated currency a system of banks. That further decreases the likelihood of money disappearing, especially if said banks start offering interest in exchange for being allowed to do loans. That resolves issues of people like me having some in a wallet that they are unlikely to ever collect/convert to fiat (not worth the hassle). So while bitcoin is likely to fail for MANY reasons, I don't think lost currency will be it (unless it is more stuff like that Japanese bitcoin bank that just went dark).

niij 10y ago
This is incorrect. Bitcoins will eventually all be moved. There is a limit on how many can be mined. At that point, the "miners" will no longer be finding new Bitcoins, but harvesting the transaction fees (which take computational power to verify)
- CmdrSprinkles 10y ago
  And by the final saturation point the value should be known well enough (and the other infrastructure aspects I mentioned will be in place) that lost coins will be a negligible concern. An expansion of "exchanges" will help a lot as then you no longer have problems with abandoned wallets as the funds themselves can be used elsewhere until the owner decides to withdraw.
tromp 10y ago
> new bitcoins will be mined at a rate that will outstrip those lost The yearly loss is some small percentage, maybe between 1% and 3%. The yearly bitcoin mining production dips under 1% in another 3 halvings, or roughly in the year 2028.

m3ta 10y ago

Bitcoins can be split and divided up to 8 decimal points. You can own 0.00000001 BTC. Additionally, the software could be forked to allow division of BTC to a more granular amount than 0.00000001, meaning if all but 1 BTC were lost the entire world could still transact with that last singular BTC by dividing it up into smaller units.

shuntress 10y ago
So, eventually everyone will be trading with yocto-satoshis but I guess that doesn't really change anything. A little bit like how a 'Calorie' is actually a kilo-calorie.
howardmilt 10y ago
The problem is we don't really know what's lost and what's in storage. It could be that all those lost bitcoins are just sitting in someone's harddrive, waiting for moment to crash the market
- m3ta 10y ago
  That is a similar but separate problem. It is admittedly a larger problem in particular for bitcoin and other currency systems with fixed supply.
- shuntress 10y ago
  I think it is important to note that implementation of the currency is separate from its value. The system for trading ownership of bitcoins does not care for the value of that ownership. The value we, outside of the system used for logistics of trade, place on the bitcoins is then affected by their scarcity. To the system, it doesn't matter if the scarcity is caused by loss or by hoarding. But this can affect our valuations.

omio 10y ago

I don't think lost bitcoins are a big issue at the moment. I doubt all of them will get lost either. What happens when all are coins are minted isn't a big issue right now either. The big things that are in our face right now is block size, total blockchain size and control of core development. I think the latter is the biggest issue facing bitcoin today.

comboy 10y ago

Somebody already answered but for those pondering similar questions: https://en.bitcoin.it/wiki/Help:FAQ https://en.bitcoin.it/wiki/Help:FAQ (this one is also answered there)

aarreedd 10y ago

Currently miners get new Bitcoin plus a fee from all the transaction in the mined block. Once all Bitcoin is created, miners will still get the transaction fees. As Bitcoin becomes more popular, the transaction fees alone should be enough to incentives miners. And it is okay of coins are lost forever. If there are fewer Bitcoin available the price goes up. Simple supply and demand. Theoretically Bitcoin can be divided as small as needed to accommodate raising prices.

rebuilder 10y ago

The currency units are divisible, currently to 8 decimal places. If that becomes insufficient, more decimal places would presumably be added. Currently, if you take being able to count to a precision of the equivalent of 1 US cent, the BTC price would either have to go up 1000-fold or every 999 out of 1000 BTC issued would need to be lost for that to become necessary. Assuming I got my math right.

Nursie 10y ago

I guess that wasn't factored in. OTOH the designer was enamoured of a deflationary currency so perhaps he liked the idea of not only a cap but a slowly dwindling supply.

vbezhenar 10y ago

Why would all bitcoins be lost? Even if only one bitcoin left, you can divide it in billions of pieces. And when you've lost every piece but one, you can further divide it. It won't be lost forever, not until our universe will die, and long before that we probably will be able to break SHA-1 and mine lost bitcoins back.

arik-so 10y ago
Just to be pedantic: Bitcoin uses sha256, and not sha1.
tromp 10y ago
> mine lost bitcoins back Mining can only produce new bitcoins. To recover lost ones, you'd need to break elliptic curve signatures (and possibly RIPEMD160/SHA256 to recover a full public key from a non-spent address).

acveilleux 10y ago

You're missing a cottage industry finding exploitable bug in some bad bitcoin libraries' key generation or signing code that will then be used to recover private key and salvage formerly lost bitcoins that are now worth an absolute fortune through rarity.