Post
Topic
Board Development & Technical Discussion
Re: A proposed solution to adjust for lost Bitcoins: wallet 'heartbeats'
by
ascent
on 22/06/2011, 02:55:33 UTC
The point in reclaiming lost coins is not to:

1) Bilk unsuspecting savers out of their coins
2) Address any issues regarding granularity
3) Have fun with trivial data

The point in reclaiming lost coins would be to:

Know that the system, at any point in the future, possibly far future, has the same dynamics as it was intended to have at its inception. I believe you are mistaken if you think it will have the same dynamics over time if you do not allow lost coins to be reclaimed. Please read the following to understand the logic.

We know for a fact that coins will be lost. Take, for example, the Japanese earthquake and tsunami. Perhaps harddrives and flash drives were destroyed then. Also, there is the potential for failed electronics, unintentional and intentional deletion, etc. Logic says that this will happen and continue to happen for as long as Bitcoins exist. The logical conclusion, until the heat death of the Universe, is 100 percent loss.

Now, before we get into a debate about the Universe's heat death or the practicality of a system designed to last that long, let's at least entertain the idea that a robust and long lasting system is desirable. Given that, let's look at how the dynamics of the system change with a significant loss of coins from the system.

The system as it is now is designed to allow commerce and valuation to occur, assuming that valuations are based on the collective wisdom of the crowd, which is based on the notion that most all coins are not lost.

The system as it will inevitably be will not be as the above system is. Instead, it will be a system in which commerce and valuation occur, but based on the collective wisdom of the crowd operating on less information than when the system was founded. In other words, valuation will be based on a more uncertain model of how many coins are truly in existence.

The short synopsis: over time, valuation will become more uncertain and less able to assess the true number of bitcoins in circulation. Is that a good model?