5 ms·

Are there good estimates of the amount of bitcoin lost every year due to carelessness? Based on many anecdotes like this, I fear it's pretty large. Bitcoin was

by tlb 9y ago

Are there good estimates of the amount of bitcoin lost every year due to carelessness? Based on many anecdotes like this, I fear it's pretty large. Bitcoin was supposed to be slightly inflationary, due to mining. But if a sufficient fraction is lost every year due to hardware failures and forgotten passwords, it will end up being deflationary. Someday (around log(1e6)/log(1+x) years from now, where x is the fraction lost every year), there'll be only 21 bitcoins left in the world, trading either at 0 or a number with 3 or 4 commas. [edit: fixed in/de-flation mixup]

LeoPanthera 9y ago
It would be a trivial fork to increase the amount that each bitcoin can be subdivided by, so if the currency does inflate a lot, liquidity can still be maintained.
- pavel_lishin 9y ago
  Is there such a thing as a trivial fork in the bitcoin world? You'd have to get buy-in for most of the developers, and most of the users too, or risk splitting into two currencies. Again.
coinqueror 9y ago
One could argue that the universe of avail bitcoins (those with known passwords) will asymptotically approach zero. Ie, there's a small chance of a user screwing up. And since there's no recourse, always a perpetual small chance of someone losing their bitcoins. Maybe Poissonian?
throwaway13337 9y ago
This would make bitcoin even more deflationary. Inflation is when a currency loses value. Less and less of something would mean it would gain value creating deflation.
- coinqueror 9y ago
  What recourse is there for bitcoin provider services that screw up? Ie, if one day Coinbase says something like, "sorry, we lost the password to one of our internal coin wallets due to technical error, and your 5.1 bitcoins are lost." I bet there's some clause in their terms that tries to shield them from this, but wonder how enforceable it would be. Ie, a regular bank presumably couldn't just say, "sorry we lost your $50k deposit due to technical error". They'd be liable.
  - plopz 9y ago
    Well banks in the US are FDIC insured.
    - jsutton 9y ago
      So are your dollars stored on Coinbase.
  - pc86 9y ago
    Well Coinbase isn't a bank and isn't regulated as such, while a bank is... well, a bank. That's the difference. Coinbase is much closer to some bro running a SaaS off AWS than it is any sort of financial institution.
    - jsutton 9y ago
      Coinbase's USD wallet is FDIC insured, so it's much closer to a bank in that denomination.
Vadoff 9y ago
>was supposed to be slightly deflationary >it will end up being inflationary I think you got your terms mixed up.
Intermernet 9y ago
Back when bitcoin was CPU mineable I had a couple in a wallet. I've lost the key and the wallet id despite being sure I saved them somewhere. I'm sure I'm far from the only one who has done this. Ah well, 20 grand lost in limbo.
randyrand 9y ago
Bitcoin is a ~democracy, and those questions will be answered. Buying bitcoin is a lot like buying a USA backed dollar, it's an investment in the community. Its not an investment in the physical paper bills/bits.
kristopolous 9y ago
First there's no practical way btc can be deflationary given the current interest. The currency pool hasn't kept up with the amount of fiat in the markets at all. Anyway, second part: https://bitinfocharts.com/top-100-richest-bitcoin-addresses.html https://bitinfocharts.com/top-100-richest-bitcoin-addresses.... is a good list. What you're looking for are wallets with a really early first in and no first out (or not one in a really long time). #4 is a good one! https://bitinfocharts.com/bitcoin/address/1FeexV6bAHb8ybZjqQMjJrcCrHGW9sb6uF https://bitinfocharts.com/bitcoin/address/1FeexV6bAHb8ybZjqQ... This wallet was last touched in 2011 and has $1,008,433,581.88 in it (yes, ba-ba-billion) Either this is the most disciplined investor ever or it's a lost file. This person dropped $1,000 in 2010 on a few btc and it's now worth $245million (https://bitinfocharts.com/bitcoin/address/1PeizMg76Cf96nUQrYg8xuoZWLQozU5zGW https://bitinfocharts.com/bitcoin/address/1PeizMg76Cf96nUQrY...) ... again, that's either super discipline or just a misplaced file. The untouched wallets are sadly really really common, especially when you get a few pages in ... you see things like this: https://bitinfocharts.com/bitcoin/address/13DyBwhpDw6152q1drbK2US5S3CdY1mRnU https://bitinfocharts.com/bitcoin/address/13DyBwhpDw6152q1dr... ... this person put in $8 (100btc), then $21 (400), then $122 (1700) and that was their july, 2010. Now it's $26.3 million. Nobody ever believed the fantasy talk in 2010 that 1 btc was going to be worth a dollar, yet alone 12,500! Lots of people were really careless. I'm there somewhere and have millions of dollars of bitcoins in a lost wallet. Weee, how fun!
- uberjoe 9y ago
  Seems morbid but my guess is that they died. Would be a shame, since their family should have it, but it makes the most sense to me. At least that's how I'd like to think of it, otherwise some poor sod is having to think about this every single day.
  - kristopolous 9y ago
    Not really! After I realized I had lost my wallet, I just went out and bought more bitcoins. So I predict most of these people that lost that wallet in 2011 don't have a zero balance today.
- soneca 9y ago
sireat 9y ago
Anecdotally, I know of a ex co-worker who CPU mined a few 50BTC blocks in 2010 and then misplaced the hard drive around 2012. He is not alone in this.
- dmichulke 9y ago
  Sorry, but I genuinely want to know how you can misplace a hard drive! (Sounds like he went to a good party, the night was long and when he finally got back home he realized he didn't have his hard drive on him anymore.)
  - fgggrr 9y ago
    You seriously can't imagine this or are you just being snarky? Happens to me all the time. Swap out hard drive to upgrade, throw old drive in box with other hardware junk, throw out junk box months later or when moving to new apartment or simply forget which old box you put that old hard drive in or even which old hard drive had those files etc. Even easier with usb hard drives or external drives.
    - dmichulke 9y ago
      Seriously, I lose stuff occasionally but nothing as bulky and "expensive" as a HDD. I got a box where I put all computer hardware and I think I just "mentally track" items that cost more than say 50$ and that I walk around with, so I just check for them like I check for my keys or mobile when I leave the house. Now a pen-drive maybe, but that wouldn't be the place to store my wallet anyway.

by tlb 9y ago

LeoPanthera 9y ago

It would be a trivial fork to increase the amount that each bitcoin can be subdivided by, so if the currency does inflate a lot, liquidity can still be maintained.

pavel_lishin 9y ago
Is there such a thing as a trivial fork in the bitcoin world? You'd have to get buy-in for most of the developers, and most of the users too, or risk splitting into two currencies. Again.

coinqueror 9y ago

One could argue that the universe of avail bitcoins (those with known passwords) will asymptotically approach zero. Ie, there's a small chance of a user screwing up. And since there's no recourse, always a perpetual small chance of someone losing their bitcoins. Maybe Poissonian?

throwaway13337 9y ago

This would make bitcoin even more deflationary. Inflation is when a currency loses value. Less and less of something would mean it would gain value creating deflation.

coinqueror 9y ago
What recourse is there for bitcoin provider services that screw up? Ie, if one day Coinbase says something like, "sorry, we lost the password to one of our internal coin wallets due to technical error, and your 5.1 bitcoins are lost." I bet there's some clause in their terms that tries to shield them from this, but wonder how enforceable it would be. Ie, a regular bank presumably couldn't just say, "sorry we lost your $50k deposit due to technical error". They'd be liable.
- plopz 9y ago
  Well banks in the US are FDIC insured.
  - jsutton 9y ago
    So are your dollars stored on Coinbase.
- pc86 9y ago
  Well Coinbase isn't a bank and isn't regulated as such, while a bank is... well, a bank. That's the difference. Coinbase is much closer to some bro running a SaaS off AWS than it is any sort of financial institution.
  - jsutton 9y ago
    Coinbase's USD wallet is FDIC insured, so it's much closer to a bank in that denomination.

Vadoff 9y ago

>was supposed to be slightly deflationary >it will end up being inflationary I think you got your terms mixed up.

Intermernet 9y ago

Back when bitcoin was CPU mineable I had a couple in a wallet. I've lost the key and the wallet id despite being sure I saved them somewhere. I'm sure I'm far from the only one who has done this. Ah well, 20 grand lost in limbo.

randyrand 9y ago

Bitcoin is a ~democracy, and those questions will be answered. Buying bitcoin is a lot like buying a USA backed dollar, it's an investment in the community. Its not an investment in the physical paper bills/bits.

kristopolous 9y ago

First there's no practical way btc can be deflationary given the current interest. The currency pool hasn't kept up with the amount of fiat in the markets at all. Anyway, second part: https://bitinfocharts.com/top-100-richest-bitcoin-addresses.html https://bitinfocharts.com/top-100-richest-bitcoin-addresses.... is a good list. What you're looking for are wallets with a really early first in and no first out (or not one in a really long time). #4 is a good one! https://bitinfocharts.com/bitcoin/address/1FeexV6bAHb8ybZjqQMjJrcCrHGW9sb6uF https://bitinfocharts.com/bitcoin/address/1FeexV6bAHb8ybZjqQ... This wallet was last touched in 2011 and has $1,008,433,581.88 in it (yes, ba-ba-billion) Either this is the most disciplined investor ever or it's a lost file. This person dropped $1,000 in 2010 on a few btc and it's now worth $245million (https://bitinfocharts.com/bitcoin/address/1PeizMg76Cf96nUQrYg8xuoZWLQozU5zGW https://bitinfocharts.com/bitcoin/address/1PeizMg76Cf96nUQrY...) ... again, that's either super discipline or just a misplaced file. The untouched wallets are sadly really really common, especially when you get a few pages in ... you see things like this: https://bitinfocharts.com/bitcoin/address/13DyBwhpDw6152q1drbK2US5S3CdY1mRnU https://bitinfocharts.com/bitcoin/address/13DyBwhpDw6152q1dr... ... this person put in $8 (100btc), then $21 (400), then $122 (1700) and that was their july, 2010. Now it's $26.3 million. Nobody ever believed the fantasy talk in 2010 that 1 btc was going to be worth a dollar, yet alone 12,500! Lots of people were really careless. I'm there somewhere and have millions of dollars of bitcoins in a lost wallet. Weee, how fun!

uberjoe 9y ago
Seems morbid but my guess is that they died. Would be a shame, since their family should have it, but it makes the most sense to me. At least that's how I'd like to think of it, otherwise some poor sod is having to think about this every single day.
- kristopolous 9y ago
  Not really! After I realized I had lost my wallet, I just went out and bought more bitcoins. So I predict most of these people that lost that wallet in 2011 don't have a zero balance today.
soneca 9y ago

sireat 9y ago

Anecdotally, I know of a ex co-worker who CPU mined a few 50BTC blocks in 2010 and then misplaced the hard drive around 2012. He is not alone in this.

dmichulke 9y ago
Sorry, but I genuinely want to know how you can misplace a hard drive! (Sounds like he went to a good party, the night was long and when he finally got back home he realized he didn't have his hard drive on him anymore.)
- fgggrr 9y ago
  You seriously can't imagine this or are you just being snarky? Happens to me all the time. Swap out hard drive to upgrade, throw old drive in box with other hardware junk, throw out junk box months later or when moving to new apartment or simply forget which old box you put that old hard drive in or even which old hard drive had those files etc. Even easier with usb hard drives or external drives.
  - dmichulke 9y ago
    Seriously, I lose stuff occasionally but nothing as bulky and "expensive" as a HDD. I got a box where I put all computer hardware and I think I just "mentally track" items that cost more than say 50$ and that I walk around with, so I just check for them like I check for my keys or mobile when I leave the house. Now a pen-drive maybe, but that wouldn't be the place to store my wallet anyway.