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So, this raises an interesting question for me. Since the total supply of Bitcoins is limited by design, doesn't every forgotten or lost Bitcoin reduce the tota

So, this raises an interesting question for me. Since the total supply of Bitcoins is limited by design, doesn't every forgotten or lost Bitcoin reduce the total supply? In other words, suppose, hypothetically, that after all Bitcoins have been mined, I bought them all, stored them on a hard drive (with no backup, obviously), and then destroyed that hard drive (let's say I threw it into a black hole). Does Bitcoin still exist?

tedunangst 13y ago
More plausible scenario: Bill Gates converts all his wealth to bitcoin, as will inevitably happen when bitcoin overtakes the dollar. He dies, but forgets to put his password in the will. oops. Normally, if a rich person dies without a will (or without specifying their bank password), there are legal procedures for the heirs to fight it out in court and collect. With bitcoin, poof, it's gone.
- PeterisP 13y ago
  Well, just as if you buy a pile of gold, bury it someplace deep and obscure, and forget to tell your heirs where exactly it is. You may happen to 'find' the bitcoin keys with some forensics, or it may never be found.
  - tedunangst 13y ago
    Indeed. I wouldn't recommend Bill Gates keep all his wealth in gold, either.
MAGZine 13y ago
Yes. The lost currency is essentially removed from the pool. The result is deflation--because there is less supply, the currency is worth more. Goods cost the same, so the bitcoin value for a certain product/service drops. At least this is what economics would seem to dictate. You can send tiny partitions of bitcoin, so it's really easy to send a millionth of a bitcoin, where if $40t disappeared from the USD, you can't give 1/1,000,000 of a dollar (not that you would anyhow, since you can't irreversibly dispose money--you just print more)
- rcthompson 13y ago
  So what about my second question? If I bought all the Bitcoins and deleted them, does that destroy the currency entirely?
  - olalonde 13y ago
    In practice, no because 1) New Bitcoins are created every 10 minutes until we reach ~21M bitcoins. 2) Some people will refuse to sell their Bitcoin to you. In theory, if you can wait until year ~2140, send all the Bitcoins in the world to your address and delete the private key from your hard drive (and brain), then yes. But then, maybe someone could get really lucky and guess your private key. But both those scenarios are uninteresting because they are impossible in practice (they are about as likely as the Flying Spaghetti Monster being real). https://en.bitcoin.it/wiki/FAQ#What_if_someone_bought_up_all_the_existing_Bitcoins.3F https://en.bitcoin.it/wiki/FAQ#What_if_someone_bought_up_all...
    - rcthompson 13y ago
      Actually, the question immediately above that one, "Won't loss of wallets and the finite amount of Bitcoins create excessive deflation, destroying Bitcoin?", really gets to the heart of what I really wanted to understand. My phrasing was really meant as a "reduction to absurdity" kind of formulation, as in "what if all the Bitcoins were lost?"
  - speeder 13y ago
    Your question is MU, ie: the question itself is wrong, because doing what you propose is so hard you can consider it impossible
- muxxa 13y ago
  What if the situation continues and large percentages of the bitcoin pool are of unknown status (could be lost, could be in the possession of a government institution, could be being hoarded). Would this make bitcoin more risky compared to a hypothetical competing crypto currency that can account for the status of all of it's coins? Could this make bitcoin untenable?

tedunangst 13y ago

More plausible scenario: Bill Gates converts all his wealth to bitcoin, as will inevitably happen when bitcoin overtakes the dollar. He dies, but forgets to put his password in the will. oops. Normally, if a rich person dies without a will (or without specifying their bank password), there are legal procedures for the heirs to fight it out in court and collect. With bitcoin, poof, it's gone.

PeterisP 13y ago
Well, just as if you buy a pile of gold, bury it someplace deep and obscure, and forget to tell your heirs where exactly it is. You may happen to 'find' the bitcoin keys with some forensics, or it may never be found.
- tedunangst 13y ago
  Indeed. I wouldn't recommend Bill Gates keep all his wealth in gold, either.

MAGZine 13y ago

Yes. The lost currency is essentially removed from the pool. The result is deflation--because there is less supply, the currency is worth more. Goods cost the same, so the bitcoin value for a certain product/service drops. At least this is what economics would seem to dictate. You can send tiny partitions of bitcoin, so it's really easy to send a millionth of a bitcoin, where if $40t disappeared from the USD, you can't give 1/1,000,000 of a dollar (not that you would anyhow, since you can't irreversibly dispose money--you just print more)

rcthompson 13y ago
So what about my second question? If I bought all the Bitcoins and deleted them, does that destroy the currency entirely?
- olalonde 13y ago
  In practice, no because 1) New Bitcoins are created every 10 minutes until we reach ~21M bitcoins. 2) Some people will refuse to sell their Bitcoin to you. In theory, if you can wait until year ~2140, send all the Bitcoins in the world to your address and delete the private key from your hard drive (and brain), then yes. But then, maybe someone could get really lucky and guess your private key. But both those scenarios are uninteresting because they are impossible in practice (they are about as likely as the Flying Spaghetti Monster being real). https://en.bitcoin.it/wiki/FAQ#What_if_someone_bought_up_all_the_existing_Bitcoins.3F https://en.bitcoin.it/wiki/FAQ#What_if_someone_bought_up_all...
  - rcthompson 13y ago
    Actually, the question immediately above that one, "Won't loss of wallets and the finite amount of Bitcoins create excessive deflation, destroying Bitcoin?", really gets to the heart of what I really wanted to understand. My phrasing was really meant as a "reduction to absurdity" kind of formulation, as in "what if all the Bitcoins were lost?"
- speeder 13y ago
  Your question is MU, ie: the question itself is wrong, because doing what you propose is so hard you can consider it impossible
muxxa 13y ago
What if the situation continues and large percentages of the bitcoin pool are of unknown status (could be lost, could be in the possession of a government institution, could be being hoarded). Would this make bitcoin more risky compared to a hypothetical competing crypto currency that can account for the status of all of it's coins? Could this make bitcoin untenable?