[ducksinhats]

>What exactly does bitcoin offer the world today?

I can tell you down to the day how many bitcoin there will be decades from now.

Can you do the same for any fiat currency for next week?

It offers stability and a mathematical escape from very fallible humans controlling monetary systems.

[lolc]

Funny thing is, we don't know how many keys are lost. They say it's deflationary, and I say it's deflating to zero through key attrition. And people pay for burning electricity meanwhile. Weird game.

[kragen]

We know it's not a large fraction, or anyway wasn't a large fraction a year ago, because the fraction of all mined Bitcoin that hasn't moved in the last year is only about 25%.

[lolc]

Where did you get this number? All I can find is much higher, showing more than half of the coins have not been moved over a year.

https://en.macromicro.me/charts/32355/bitcoin-supply-last-ac...

https://charts.bitbo.io/dormant-coins/

Edit: If I understand correctly around 15% of coins has not moved in even ten years. So more than 20% of all the mined coins up to mid 2015 have not moved since.

[kragen]

Maybe I remembered it wrong, or maybe I was just out of date. Thanks for the correction! Still, that's basically pointing at key attrition being a fairly minor phenomenon.

[FabHK]

People complain about 5% inflation, and you call 20% or so of money supply gone "fairly minor"?

[kragen]

Yes; we're talking about 20% or so over 16 years, which is 1.25% per year, four times lower than the 5% per year inflation you're saying people complain about. And the anecdotal data suggests that that key attrition was concentrated in the early years, not just before there were Bitcoin ETFs, not just before there were exchanges, but before even the Bitcoin pizza.

But the big issue from my point of view is not the actual key attrition rate but the uncertainty of the money supply, because from my point of view, these are the important questions about key attrition:

- If Bitcoin goes to zero, what order of magnitude of money will the investor class lose? 200 trillion dollars, 20 trillion, 2 trillion, 200 billion, 20 billion, or 2 billion?

- How much money and power has Bitcoin transferred to its early adopters: 2 trillion, 200 billion, 20 billion, 2 billion, or 200 million?

- How much impact could awakening dormant coins have on the market? If Satoshi, or for that matter Hal Finney's heir or another early participant, started liquidating his early coins, would that be a tenth of the usual daily trading volume? Ten times? A hundred times?

Questions like these are why lolc brought up key attrition in response to ducksinhats saying, "It offers stability and a mathematical escape from very fallible humans controlling monetary systems."

A key attrition rate of 99% or 90% to date would result in very different answers to these questions. But 20% or 50% to date is fairly minor in this context.

[throw101010]

Even if it was known and it did tend to zero I don't see the issue, Bitcoin is divisible, almost infinitely if you count L2s system (e.g. Lightning Network operates on a millistaoshi base unit instead of satoshi). Inaccessible bitcoins mean that the accessible ones are more rare so in a way it benefits other holders this way.

They also serve the network as a form of security bounty, let's say tomorrow we discover a way to break encryption "soon" pepople will be provided with a path to safer addresses but these old addresses, the ones for which a public key is known, act as an incentive to look for such security flaws.

[wqaatwt]

Point is that it encourages hoarding money instead of engaging in anything that’s productive. Technical issues are secondary.

[throw101010]

Nobody prevents you from spending and replacing bitcoins, besides maybe the governments that insist on taxing smaller transactions as if it wasn't a currency.

You should ask them why they've generated about 58 million millionaires and 2,700 billionaires worldwide. That's some actual "hoarding" you should be concerned about, instead of concern trolling about Bitcoin.

[wqaatwt]

> Nobody prevents you from spending..bitcoins

Well besides common sense.

If you own a deflationary asset/currency which is guaranteed to appreciate as long as the economy is growing (well it wouldn’t if btc became a global currency but that’s another matter) there is no reason for you to invest into anything unless it offers a disproportionately high return (or buy goods/services now if you can delay buying them)

It would just reduce risk tolerance for investors and increase the real cost of borrowing significantly. That’s how deflationary currencies work (we know that based on several hundreds years worth of empirical evidence).

[kragen]

It sounds like you aren't familiar with the anti-deflation argument. I've summarized it in https://news.ycombinator.com/item?id=44471609, which you will probably want to read.

[OtherShrezzing]

I don’t think it really does offer that escape, now that there’s so much institutional investment in it. It’s essentially tied to the decisions of 5 or 6 monetary policy committees, in the same way APPL is, because the risk free rate from the Fed or ECB is still the most significant factor in capital flows.

[i_cannot_hack]

> I can tell you down to the day how many bitcoin there will be decades from now.

As this story itself demonstrates, you clearly can't, and it already has the potiential to affect markets: "18.04 million bitcoin sits in dormant accounts. Sizable inactive accounts that wake up after years of dormancy draw investor attention because of the potential market impact if those coins are sold."

It's impossible for you to know if the accounts are dormant intentionally or because the owner has died or lost access - and in the latter case the coins are effectively lost or destroyed in every practical sense. So you can't even say how many usable bitcoins exist at this very moment, and it is even more impossible for you to tell exactly how many accounts will be lost in the future.

[tobias3]

That's not completely true. If there is consensus among participants (especially exchanges) to change Bitcoin (fork) they can do it.

Can't do that with Gold.

[msgodel]

That would be a different (forked) currency then.

[tobias3]

Or it would be Bitcoin classic and have less/no value. See ETC vs. ETH. All depends on how many (important) market participants use which version.

[user_7832]

But what's the (inherent, or even otherwise) benefit of this?

[torbid]

If the goal is to hoard a currency itself instead of use it as the exchange between real investments then this makes perfect sense, but those people shouldn't be upset when we tell them we don't directly accept their "currency".

This sentiment models a correction to a complaint I first heard with people who tell us everything fell apart since we ended the gold standard. They ignore that we raised all boats rapidly when we didn't pin everything to governments ability to fight gold hoarders for small amounts of gold entering the market. Even gold hoarders are better off in terms of what the market has created to exchange for their gold because that exchange ceased to be limiting on market expansion.

One could say the US economy was exponential both before and after the currency change, but as with Moore's Law, it gets harder to remain exponential if as few as one limiting factor is emerging.

[chupchap]

> I can tell you down to the day how many bitcoin there will be decades from now.

How does that help, when the value it translates to doesn't stay the same? Also the conversion value will be impacted by changes in fiat currency.

[FabHK]

Discretion in money supply is a feature, not a bug.

But yeah, put 1% of your savings in each of the 20,000 coins with strictly limited supply. Their value must surely rise, right.

[retube]

> I can tell you down to the day how many bitcoin there will be decades from now

So what? if you say "scarcity", that by itself has no value. plenty of things are scarce, but are not valuable, no one wants it.

And anyway, bitcoin is not even scarce. there are thousands of other coins now, anyone can create one, these will / are diluting the $$$ going into btc

[MangoToupe]

Not to mention this will effectively be an overestimate given loss of bitcoin to wallets whose owners lost the key.

[wqaatwt]

> stability

That’s the opposite of stability unless you have an entirely static economy with no growth.

Adopting an extremely deflationary asset as a “currency” is one way to get the no growth part I suppose. It certainly wouldn’t be stable.

We’ve (well some, anyway..) learnt that lesson with the gold standard and permanent boom and bust cycles prior to the 1930s. It was anything but stable in the short/medium term.

[josephg]

> It offers stability

Hahaha what? Bitcoin has insane volatility.

[account-5]

I wouldn't describe bitcoin as stable.