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I hope they still have the private key.
by seymon 15d ago
I hope they still have the private key.
- jakemanger 15d agoReally hope so too. Would be devastating
- osigurdson 15d agoIt is an interesting fact about Bitcoin in general. There are 21M tokens in total AND some percentage are lost every year. Run this simulation long enough and there will be very few active Bitcoins remaining.
- dakolli 15d ago[dead]
- Roark66 15d agoSeems pretty silly to build in deflation into a currency. It incentivises putting your money in a mattress for 100 years.
- PowerElectronix 15d agoI like the alternative even less, as it incentivises spending more than you would and taking on debt you don't really need.
- velcrovan 15d agoWell, countries have experienced moderate inflation and moderate deflation, ask the ones who lived through both which one they preferred.
- eru 15d agoModerate deflation is fine, it's good even. But only as long as nominal GDP stays stable. See the so called 'Long Depression' in the 19th century. Which was only a depression of the price level, everything else did well. For a more sectoral example, see how computer hardware used to get cheaper and cheaper all the time, but total spending on hardware went up.
- morning-coffee 15d agoThat is https://en.wikipedia.org/wiki/Jevons_paradox https://en.wikipedia.org/wiki/Jevons_paradox
- rerdavies 15d ago> taking on debt you don't really need. How does that work? When inflation goes to 18%, borrowing rates go to 23%.
- snapcaster 15d agoIt's not silly, it harnesses some of the mechanics behind ponzi schemes to encourage viral spread. Early entrants are incentivized to evangelize it to newer ones
- benenrjdnz 15d agoDeflation is a good thing, it rewards delayed gratification. Those evil Keynesians have convinced the world a little bit of inflation is good. It isn’t. Losing purchasing power on your money is a bug. Nothing wrong with putting money under a mattress for 100y if the value of money is not evaporating. For most of human history the money was stable. It’s the disasters of 20th century wars that eroded the value, and 21st century lack of monetary discipline that keeps driving it down now.
- SR2Z 15d ago> Deflation is a good thing, it rewards delayed gratification. "Delayed gratification" is also provided by investments producing returns. An economy with lots of investors will outperform one where people stuff their cash into their mattress, and deflation makes it very hard for potential investments to beat that strategy. > For most of human history the money was stable. [citation needed] The Spanish empire was driven to collapse by hyperinflation. Even in the US, there were financial collapses in the 19th and 18th century. Bank runs have been a thing for as long as banks have: https://en.wikipedia.org/wiki/Bank_run https://en.wikipedia.org/wiki/Bank_run Your premise is based on faulty assumptions. The existence of credit itself is what causes monetary instability, and without credit the world would look very different.
- pjc50 15d ago> The existence of credit itself is what causes monetary instability, and without credit the world would look very different. Indeed. Credit is money; ultimately anyone can expand the money supply with an IOU.
- benenrjdnz 15d agoMoney is destroyed when a loan is paid back. Private credit does not expand the monetary supply permanently. Only the state can increase the money supply.
- IAmBroom 15d ago
- FeepingCreature 15d agoI suspect it was a deliberate strategy to create scarcity, allowing the original creators to massively cash out. If you make an inflationary distributed currency, it may work better but it's a bit harder to get rich on it.
- eru 15d agoDuring much of the industrial revolution, gold also rose in real price. But people still did business in gold standard countries. (Hint: the gold might be under a mattress or in a vault, but you can still an almost arbitrary amount of gold denominated debts and loans and deposits.)
- chabska 15d agoThere is zero evidence that deflation has any effect on spending. At the micro level, the change in price is too small for every day purchases. Would you starve yourself for one day because the pizza will be one cent cheaper tomorrow? At the macro level, every interest rate will be adjusted based on the base inflation/deflation rate, so the net effect is zero. Banks will offer a higher profit rate for their savings account to entice people to deposit their money in the bank instead of their mattress.
- nickez 15d agoThe other option is to make everyone gamblers, either speculate on properties or stocks. Pick your poison.
- andrewla 15d agoThe idea that deflation is built into Bitcoin is exactly equivalent to saying "the real value of bitcoin will always increase" which is an absurd premise. Bitcoin is deflationary only in a hybrid Keynsian - Austrian worldview. In the Keynsian worldview it cannot by definition be deflationary because that would mean that the value is always increasing which is just kind of a mad thing to believe. In the Austrian worldview it is not deflationary because the amount of Bitcoin is always increasing by design. Only if you accept the Austrian framing of "deflation is when you decrease the money supply" together with the Keynsian framing of "money supply is measured in real terms not nominal" do you arrive at the idea that it could be deflationary, and there are exactly zero economists who believe both of these things.
- osigurdson 14d agoBitcoin is more like an asset than a currency. Unless a country makes Bitcoin its only currency it doesn't really matter that it is deflationary.
- derangedHorse 15d agoTail emissions and infinite divisibility are proposals to address this.
- eru 15d agoWell, they are infinitely divisible in principle, so it doesn't matter too much. (At the moment, there's a smallest fraction you can send on the network, but they can change that.)
- tigereyeTO 15d agoNo they are not. There are only 8 decimal places, not infinite.
- fsflover 15d agoAFAIK it can be changed later.
- chinathrow 15d agoCan't the change the 21M?
- eru 15d agoYes, they could change that, too. However I expect that adding more decimal places will actually happen, but adding extra bitcoins won't.
- jackb4040 15d agoWorth pointing out that the monetary policy of bitcoin is not written in stone; all you need to change it is a majority of hashpower. The current chain of bitcoin mainnet includes hard forks, like this one due to miners' manual intervention over a software bug that was exploited: https://en.bitcoin.it/wiki/Common_Vulnerabilities_and_Exposures#CVE-2010-5139 https://en.bitcoin.it/wiki/Common_Vulnerabilities_and_Exposu...
- notpushkin 15d ago> all you need to change it is a majority of hashpower Or rather the majority of actual users. Hard forks occur because people install and use the updated clients. If 90% of the miners decide to mine on the “bad” chain, but 90% of users switch to the “good” one instead, the “good” would likely still win out in terms of market cap and recognition (and the miners would naturally have to follow).
- andrewla 15d agoBecause difficulty does not adapt dynamically, if the miners do not move then the fork will be defunct because it will take literally days to weeks to mine a block, and to mine the 216 blocks that would trigger a difficulty adjustment would also take proportionately longer. So transactions would sit in the mempool and the currency would be mostly useless.
- notpushkin 14d agoFair point. Maybe you could hardcode a lower difficulty in the fork for the next couple dozen blocks, and schedule an adjustment after that?
- jackb4040 15d agoI think for most bitcoin users, the main usability concern wrt forks is being on the most secure chain; i.e. hashpower. If you're willing to trade being on the most secure, most historic chain for specific technical features then you're probably on an altchain already. In practice every hard fork in history the chain with the most hashpower has retained the ticker, meanwhile the users are never organized enough to do anything but follow that decision.
- bryanlarsen 15d ago21M is the theoretical cap. At the moment there are 20M and more are constantly being mined. Miners have to convert bitcoin into real currency to pay for their electricity both for mining and transaction fees. This means that there is always a supply of bitcoin for sale. Which is fine if there is still demand for new bitcoin, but who's buying bitcoin these days? It has underperformed both the S&P 500 and gold over the last 5 years. I expect bitcoin inflation to continue. (AKA the bitcoin price to continue to go down).
- orliesaurus 15d agoEventually with quantum computing we will be able to recover those wallets right? (Technically)
- rbreve 15d agoat this point bitcoin will be worthless
- tigereyeTO 15d agoThat depends on whether the public key has been exposed. Bitcoin addresses encode the ripemd160 hash of the public key, so by default when payments are made to new addresses they are not quantum crackable. But when someone spends from an address they publish the public key to the chain as part of the spend. From then on, any new deposits sent to the same address are at risk of quantum attack
- briansm 15d agoThe hash is merely a convenience, the _actual_ public key used in transactions is present in the ledger and available to anybody who wants it.
- notpushkin 15d agoHow does that work? Suppose I make a paper wallet on an offline PC, write down the address and discard both keys. If I now send some BTC to this address, how does the client figure out the public key?
- andrewla 15d agoOnly if there has been an outgoing transaction from that account. If the address has only received deposits then only the hash is available.
- thih9 15d agoTechnically it might be more profitable to mine extraterrestrial diamonds.