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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 s
by 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 agoSo what about my second question? If I bought all the Bitcoins and deleted them, does that destroy the currency entirely?
- olalonde 13y agoIn 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 agoActually, 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 agoYour question is MU, ie: the question itself is wrong, because doing what you propose is so hard you can consider it impossible
- muxxa 13y agoWhat 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?
- Houshalter 13y agoPossibly though you would have to obtain a large amount of bitcoins and then just sit on them for a long time to have any affect. And I doubt it would make money since the price would go down if you put them back on the market. The equivalent situation in the real world would be if someone secretly bought half the world's oil supply and then hid it, or at least just sat on it. The price goes up since there is now less oil available.