Bitcoin is eating itself | Hacker News Reader

Bitcoin is eating itself

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39 pointspassenger14 comments

On a related note, I wonder how much value is orphaned due to lost keys. If people forget their passwords, they can forget their keys/passphrases. Myself, I just had a hard drive failure. Of course, I have backups, but how many non tech savvy people are diligent about backups?

Considering the total amount of bitcoins is limited by design, this will eventually be a problem. I really dont think bitcoin is a viable currency for mainstream use.

Value? None. Bitcoins are entirely fiat, so for every coin that is lost, the exchange rate should compensate to reflect the new supply. It only really starts to become a problem when 1 Satoshi (smallest subdivisible unit) represents more value than we'd like. At the minute the exchange rate is Satoshi = USD $0.0000145925, so there's a few orders of magnitude headroom there.

I agree though that Bitcoin is not a viable mainstream currency.

I had about 100 bitcoins mined in the extreme early days and weeks, but I wasn't really a believer and just did it to see what it was about, and never thought it would be worth money per se.

Wish I had kept the details, but it's nearing a decade ago, and that harddrive is long gone, unfortunately.

I still have them! ;-)

> I really dont think bitcoin is a viable currency for mainstream use.

Bitcoin is not a replacement for paper money, but for digital money. Only in developed countries, digital money is in mainstream use. Outside, the majority of people are "unbanked".

The problem with digital dollars is that government and banks can create them out of the fricking blue. They effectively do that -- all the time actually -- while in the process debasing and devaluing the dollars that you are holding.

I got many of my bitcoins a few years ago at $250/btc. Now they are almost $1500/btc. I think that bitcoin is a very viable digital currency. Seriously, I am not willing to exchange them for liberally-printed digital dollars.

I'm no bitcoin expert, but would it not be possible to cash out the below-fee-value coins by making a multiple-input transaction consisting of many wallets with <0.0004btc held, paying it all to one wallet, selling the contents of that wallet and returning the sale price back to the wallet holders?

Obviously that's pointless at the current fee level (<$1) but if the fee grows high enough, or if there's a way to reach these wallet holders en-masse and convince them of the value this would provide to the network (or get them to short btc in advance of a large sell-off of the gathered coins). Notwithstanding the legality/morality of any of this, it's not my field.

Each input of the transaction requires a signature, which makes the transaction larger and therefore increases the required fee. Here is a random example from a recent block of such a transaction with many inputs, it pays about $52 in fees:

https://blockchain.info/tx/ef29f862f3ceee10ed3e1f04585e18cc2...

So it is more accurate to think of the cost as a fee per byte instead of a fee per transaction. And there's a minimum amount of bytes that's needed to consume any hitherto unspent transaction output.

Interestingly, if bitcoins were to support Schnorr signatures, then the signatures could be combined and then your idea would work. Though this would not be able to salvage the existing unspent transaction outputs that are already secured with ECDSA signatures.

How can you say they are worthless, if all it would take is one miner to include all of those unsigned transactions in a block for them to have worth again?

It's one thing to say miners aren't incentivized to include them today. It's another thing to say no miner will ever have an incentive on any day in the future.

How many millions around the world are lost in the form of dropped pennies no one will ever bother to pick up? Is cash eating itself?

Do you think that's a fair comment on the article?

Hang around in a place like r/bitcoin, and you'll find that criticism is often met with redirection toward fiat rather than having a legitimate discussion about how to address shortcomings.

Shortcomings should be addressed by forking bitcoin into yet another altcoin and demonstrate the proposed improvement over there. We now have 700+ alternative "altcoins" in circulation, most of them demonstrating pretty much nothing at all. Real breakthroughs are once in a blue moon, while all kinds of useless criticisms are plentiful. In that sense, we do not want to have a "legitimate discussion" but to observe legitimate altcoins embodying improvements, while they are performing in the real world.

Is a legit concern. Money can be distroyed also but is just reprinted. Bitcoin could implement a similar procedure in some way for marking lost bitcoins and regenerate it.

On the other hand, If a crashed hard-drive contains some money, maybe at some point could be economically feasible to try to recover and copy it in a laboratory?.

If it's not, whats the reason?

.0004 BTC is 50 cents. So this is one reason why, but still it's comparable to bank fees to get one of these useless coins every now and again.

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