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People keep saying 21 million bitcoins. There are a significant percentage lost forever.

dmix 13y ago
Why does every bitcoin comment thread have this conversation? It doesn't matter if a tiny percentage of the currency does not exist in the marketplace or gets lost. 21 million / 0.00000001 = how many bitcoins can "exist". So considering that there's no real blocking factors in how many bitcoins can be distributed, why does it matter if some get lost? The value of the coins are hardly affected now that such a high level of adoption has occurred. Those coins weren't even in previous circulation in any marketplaces affecting prices.
- Jtsummers 13y ago
  The divisibility of the currency doesn't matter for this calculation. Currency represents wealth. There is a finite amount of BTC that will ever be available. Any BTC that is locked away like this means there is less BTC to represent the same amount of wealth (actually, it's a growing amount of wealth presently). This means the value (or potential value) of each BTC has gone up.
  - dmix 13y ago
    > This means the value (or potential value) of each BTC has gone up. By an ever decreasing significancy as the market cap expands and BTC of value are held onto with care.
    - Jtsummers 13y ago
      I think there may be some confusion on my part in understanding your point. To the second part, BTC loss will hopefully decrease. If loss/theft continues it's represents a significant UX issue that will inhibit the growth of bitcoin. To your first part, why would 1 BTC lost when it's worth $1000 have a greater significance than 1 BTC lost when it's worth $1,000,000? EDIT: Unless you mean any individual wallet's share of BTC is likely to be less, in which case the odds of losing as much BTC in a single incident is significantly reduced.
      - dmix 13y ago
        > Unless you mean any individual wallet's share of BTC is likely to be less, in which case the odds of losing as much BTC in a single incident is significantly reduced. Exactly. The only common narrative of these lost BTC is an earlier ignorance by the owner and a rapid increase in price. That is the only reason "millions" get lost. Once prices stabilizes via increased market cap and average BTC/owner is reduced, this narrative stops being prevalent and large scale.
        Jtsummers 13y ago
        I still have a question, when will prices stabilize? Why does an increased market cap imply stable prices?
- jballanc 13y ago
  Ask the Zimbabweans about the insignificance of 14 zeros in your currency. History is littered with far more examples of currency revaluation than long-term stable measures of wealth (in fact precious metals are, possibly, the only example).
  - fryguy 13y ago
    Zimbabwe had hyper-inflation, which made currency worthless as soon as it was printed. Bitcoins have the opposite "problem".
    - Jtsummers 13y ago
      So in Zimbabwe, receiving $1,000,000 in the morning was a losing proposition because by nightfall you might sell the same good for $1,000,000,000. With hyper-deflation, spending $1,000,000 in the morning would be a losing proposition because by nightfall you might buy the same good for $1,000. Both suffer severe problems, economically, but who loses and who wins changes. The matrix is something like this: Inflation| Buyer | Seller | ---------+-------+--------+ Early | Win | Lose | ---------+-------+--------+ Later | Lose | Win | ---------+-------+--------+ Deflation| Buyer | Seller | ---------+-------+--------+ Early | Lose | Win | ---------+-------+--------+ Later | Win | Lose | ---------+-------+--------+ Ultimately, neither one is good. In the case of moderate deflation and inflation it's similar. There is less motivation to invest, greater motivation to save under moderate deflation. Moderate inflation increases the motivation to invest, but decreases the motivation to save.
- simplemath 13y ago
  The current market cap is based on the notional value of all coins mined to date x current market value of 1 BTC. If there are actually 1 million BTC (0r 100k or whatever)missing, lost or otherwise irretrievable, then the price per bitcoin is notionally higher. Of course, there's no way to ever prove some coins were lost or not so the point is moot. In a roundabout way I agree with you, just not for the same reasons. In effect the lost coins are already priced in, I just find the idea of lost BTC fascinating.

dmix 13y ago

Why does every bitcoin comment thread have this conversation? It doesn't matter if a tiny percentage of the currency does not exist in the marketplace or gets lost. 21 million / 0.00000001 = how many bitcoins can "exist". So considering that there's no real blocking factors in how many bitcoins can be distributed, why does it matter if some get lost? The value of the coins are hardly affected now that such a high level of adoption has occurred. Those coins weren't even in previous circulation in any marketplaces affecting prices.

Jtsummers 13y ago
The divisibility of the currency doesn't matter for this calculation. Currency represents wealth. There is a finite amount of BTC that will ever be available. Any BTC that is locked away like this means there is less BTC to represent the same amount of wealth (actually, it's a growing amount of wealth presently). This means the value (or potential value) of each BTC has gone up.
- dmix 13y ago
  > This means the value (or potential value) of each BTC has gone up. By an ever decreasing significancy as the market cap expands and BTC of value are held onto with care.
  - Jtsummers 13y ago
    I think there may be some confusion on my part in understanding your point. To the second part, BTC loss will hopefully decrease. If loss/theft continues it's represents a significant UX issue that will inhibit the growth of bitcoin. To your first part, why would 1 BTC lost when it's worth $1000 have a greater significance than 1 BTC lost when it's worth $1,000,000? EDIT: Unless you mean any individual wallet's share of BTC is likely to be less, in which case the odds of losing as much BTC in a single incident is significantly reduced.
    - dmix 13y ago
      > Unless you mean any individual wallet's share of BTC is likely to be less, in which case the odds of losing as much BTC in a single incident is significantly reduced. Exactly. The only common narrative of these lost BTC is an earlier ignorance by the owner and a rapid increase in price. That is the only reason "millions" get lost. Once prices stabilizes via increased market cap and average BTC/owner is reduced, this narrative stops being prevalent and large scale.
      - Jtsummers 13y ago
        I still have a question, when will prices stabilize? Why does an increased market cap imply stable prices?
jballanc 13y ago
Ask the Zimbabweans about the insignificance of 14 zeros in your currency. History is littered with far more examples of currency revaluation than long-term stable measures of wealth (in fact precious metals are, possibly, the only example).
- fryguy 13y ago
  Zimbabwe had hyper-inflation, which made currency worthless as soon as it was printed. Bitcoins have the opposite "problem".
  - Jtsummers 13y ago
    So in Zimbabwe, receiving $1,000,000 in the morning was a losing proposition because by nightfall you might sell the same good for $1,000,000,000. With hyper-deflation, spending $1,000,000 in the morning would be a losing proposition because by nightfall you might buy the same good for $1,000. Both suffer severe problems, economically, but who loses and who wins changes. The matrix is something like this: Inflation| Buyer | Seller | ---------+-------+--------+ Early | Win | Lose | ---------+-------+--------+ Later | Lose | Win | ---------+-------+--------+ Deflation| Buyer | Seller | ---------+-------+--------+ Early | Lose | Win | ---------+-------+--------+ Later | Win | Lose | ---------+-------+--------+ Ultimately, neither one is good. In the case of moderate deflation and inflation it's similar. There is less motivation to invest, greater motivation to save under moderate deflation. Moderate inflation increases the motivation to invest, but decreases the motivation to save.
simplemath 13y ago
The current market cap is based on the notional value of all coins mined to date x current market value of 1 BTC. If there are actually 1 million BTC (0r 100k or whatever)missing, lost or otherwise irretrievable, then the price per bitcoin is notionally higher. Of course, there's no way to ever prove some coins were lost or not so the point is moot. In a roundabout way I agree with you, just not for the same reasons. In effect the lost coins are already priced in, I just find the idea of lost BTC fascinating.