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So, there's 100 coins that represent an abstract value X. Now there are only 50 coins because 50 were lost. Do they still count as that same value X? What if y
by drivebyacct2 14y ago
So, there's 100 coins that represent an abstract value X.
Now there are only 50 coins because 50 were lost. Do they still count as that same value X? What if you can't know how many coins were lost?
- wmf 14y agoIn theory this is priced in already. Lost BTC is treated no differently than "hoarded" BTC; in either case it doesn't contribute to market liquidity.
- drivebyacct2 14y agoSurely there is, or there would be eventually, value to knowing how much BTC is "hoarded" or even possibly just "saved" and how much is actually "lost".
- glesica 14y agoWell, not exactly, right? I mean, they don't contribute to liquidity, but the difference is that hoarded bitcoins might, at some point in the future, be traded. So it has to be considered when assessing the risk of bitcoins as an investment.
- greenmountin 14y agoGood point! But that's "1/f" (frequency) liquidity. If the true value of bitcoin is as an instantaneous transfer (and it is), then the chance of a shadow wallet emptying in between the time you received and when you cashed out is vanishingly small. The cost to insure against such fluctuations while it gets multiple confirmations is your "transaction fee". Bitcoins shouldn't be considered an investment -- the business about hoarding them like taxi medallions because they only go up in value is nonsense. Their value is limited by the low transaction fee for another blockchain. But you're right, you'd have to factor that in if you were actually investing.
- philix001 14y agoThe offer/demand will adjust the price of the remaining bitcoins. Think of lost bitcoins as a small donation to all bitcoin users.