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Comment by josst | Hacker News Reader

Bitcoin is finite and one would expect the supply to become smaller over time thanks to keys being lost or owners dying and their accounts being inaccessible. In the long term guessing keys may be the only way to obtain new coins.

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This is a common irrational argument (meaning it requires more work to determine truth) regarding the exhaustion of "supply". A "coin" is simply a numeric value in a wallet of a whole amount. Fractional amounts can, and will, continue to be "created" using subdivision of existing coin. There is, with future code changes, no limit to the precision of the values stored there, so even a sub fraction of a bitcoin will still do to serve the entire network, if the network is still operating, of course.

The deflation issue is what is really addressed here, where no new coins will be introduced at a given point. Whether new coin arrives or not, is really not an issue. An analogy would be the use of pennies if all the paper money went missing.

Guessing keys should never be an option, otherwise Bitcoin needs to upgrade its cryptographic functions. The supply will be shrinking in the sense of the asset/currency becoming deflationary at some point, as soon as 'lost Bitcoins > mining reward'. The limit of 21 million is arbitrary. Actually the current maximum in terms of units is 2,100 trillion, as you can divide every Bitcoin in 10^8 units. As a hard fork can update this denomination, there is nothing that limits Bitcoin to be adopted by a large audience.

Not true. Mining at later stages will provide miners with transaction fees which will be significantly high enough for them to focus on keeping the network secure rather trying to find colliding keys

No coins to provide transaction fees if they are all lost though which is what the person you were replying to was saying.

Unless you have a hidden advantage, the cost of mining and the reward for collecting transaction fees will converge. The capital required to become a miner is very small, and the amount that a user can offer for fees is easy to change, allowing the market to be very efficient.

The new mining...

This would basically make Bitcoin Keynesian, since coin stored in wallets would now decay with a given probability. So you would have to invest it at least a little to beat the decay (shrinkage) rate.

You're mixing up Keynesianism with money supply increases due to changes to the reserve ratio, discount rate, and printed currency. These happen to central bank controlled fiat money regardless of whether the people controlling the money supply are Keynesian.

Then you conflated losing some percentage of your cash assets due to inflation, which can happen even if the money supply does not change, to losing all of your cash assets with some probability. The former encourages investment, while the latter encourages not holding cash at all.

Bitcoin becomes unspendable and worthless when the private keys are lost.

But when you have the private keys, your Bitcoin doesn't "decay". On the contrary, it becomes more scarce, and therefore more valuable.

You missed the point.

Once the primary way of gaining bitcoins is hacking wallets, the longer a bitcoin is behind the same private key, the longer that given wallet is a target.

IMO, the most vulnerable wallets are going to be the ones actively in use and stored insecurely, for example, on Windows machines subject to the recent NSA bug.

This assumes an end to speculation which IMO will always exist.

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