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Comment by QuasiAlon | Hacker News Reader

what does it mean you lost your wallet? #noob_here

A Bitcoin wallet is a file that contains the private keys that allow you to transfer bitcoins from a certain address. If you lose that file, you can't use those coins, they'll just sit there forever.

#noob_here also

If the bitcoins in the lost wallet never get recovered, does that mean that the amount bitcoins available for trading has just decreased? My small understanding of bitcoin tells me that there only a limited number of bitcoin available once it has all been mined.

Yes.

so this should lead to an even higher exchange rate since there's even less supply. any estimates how many bitcoins are lost in oblivion?

Also brings in the question as to when bitcoin becomes useless as there are not enough bitcoin in the wild for useful trading.

This is pretty far away. Making some quick and dirty calculations:

The lowest bitcoin denomination is one Satoshi, which is 0.00000001 BTC. If one Satoshi would equal one cent, this means that one US dollar would equal 0.000001 BTC.

Given that the maximum number of Bitcoins is ~21 million, this amounts to a max capitalization of ~21 trillion USD.

That also assumes a nontrivial amount of lost wallets, which I have a feeling is not the case...

Bitcoin will never become useless because of such stupid reason. If people need smaller divisions than 1 satoshi (10^-8 of BTC), the protocol will accommodate that easily with small extension. But most probably, smaller transactions will be carried outside the blockchain on a decentralised clearing networks (where debts are cleared with real BTC transactions every day to limit the risks).

thanks for answering. So I guess you should always keep that file in dropbox :)

If you do upload your wallet to "the cloud", you should definitely encrypt it with strong encryption and with a password of appropriate entropy. Otherwise, you're just asking for someone to steal your coins.

in that case, what's the best way to protect your coins?

Encrypted paper wallets, probably. https://en.bitcoin.it/wiki/Securing_your_wallet#Paper_Wallet...

How feasible would it be to "guess" the private keys to a wallet? Could the computing power people dedicate to hashing be directed toward this?

I'm sure this question makes it pretty obvious I'm not a cryptographer, but I'm still curious.

Flipping the coin predictably 256 times in a row will require more time and space than available in the universe.

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