G+_George Kozi Posted January 5, 2014 Share Posted January 5, 2014 A fundamental problem with Bitcoin Leo Laporte Fr. Robert Ballecer, SJ If there is a limited number of bitcoins possible to be minted, then we have a problem. Over time, wallets with bitcoins in them can be lost, be forgotten about, or just disappear when someone dies and doesn't give those bitcoins to anybody. Not to mention losing the password to your full wallet... Over time, the number of bitcoins that are blocked this way could increase to the point of being even greater than the number of bitcoins in circulation. The system does not provide a remedy for this problem. It can't, by its very nature. Link to comment Share on other sites More sharing options...
G+_Tom Wisniewski Posted January 5, 2014 Share Posted January 5, 2014 Then we just divide bitcoins. Even if just one is left, we can divide it into little bits and deal with those. Link to comment Share on other sites More sharing options...
G+_George Kozi Posted January 5, 2014 Author Share Posted January 5, 2014 That's not really a solution. As it is set up now, it is a slow decline to zero bitcoins in circulation (its ... asymptotic) . Over time, the number of blocked bitcoins can only increase. Link to comment Share on other sites More sharing options...
G+_Paul Comeau Posted January 5, 2014 Share Posted January 5, 2014 Yup... Same problem with most (all?) finite resources. Some amount will disappear. Hence I'm not a big Bitcoin fan, it's like speculating in gold or other precious metals. It's not so much a currency as it is a commodity used for barter. Link to comment Share on other sites More sharing options...
G+_Rick Heil Posted January 5, 2014 Share Posted January 5, 2014 I read in some of the more esoteric bitcoin development areas where this problem is being considered and there are remedies proposed. One I recall was instituting a policy whereby an 'orphaned' 'coin' could become tagged for possible 're'mining i.e. reuse. The main problem is how to identify a coin is actually, truly lost. Other solutions revolved around not setting a finite endpoint but rather a deterministic 'volume' level whereby if enough coins fall out of circulation then more are minted to keep a semi-stable volume (potentially with some minor built in inflation). Point is there are a myriad of solutions and like all things in life each with its pros and cons. One of the things bitcoins has going for it is it is a truly transparent system that all can see and plan on. So as problems, emerge, as in any system they can be addressed. Link to comment Share on other sites More sharing options...
G+_Kyle Weller Posted January 5, 2014 Share Posted January 5, 2014 this is a very poor argument, the same thing will happen with bitcoin as with other currencies and commodities, cash money as well as gold and other commodities get destroyed daily, some of those things increase in value due to them too having limited supplies. Since bitcoin is deflationary and has a set amount of bitcoins, it could in theory cause an increase in value if bitcoins are lost. But as we all know bitcoin is like anything else traded, the price of bitcoin is decided by the exchanges and traders just like the $, euro, stocks and everything else, if there is big demand, a large buy wall makes the price rise, if there isn't and reason to believe bitcoin is overvalued there is large sells. Just like any other currency, commodity or stock. This is the poorest of all arguments against Bitcoin because its an argument against everything else as well. Link to comment Share on other sites More sharing options...
G+_Kyle Weller Posted January 5, 2014 Share Posted January 5, 2014 Any idea to "remine" coins or expire them will ultimately fail, if I want to put bitcoins under my mattress or in a safe deposit box, I want them safe and as a store of value, the same is done with cash, why would you want cash or your gold some day valued at $0 because you didnt spend it in time, bad idea. Link to comment Share on other sites More sharing options...
G+_Ned Jeffery Posted January 5, 2014 Share Posted January 5, 2014 Rick Heil You cannot identify an orphaned coin. that coin is broken up millions of times and shared around the globe. it no longer exists. there is only the collective total of bitcoin in circulation. And any possible manipulation that allows input of additional coin, amounts to a security problem. The only solution I see is to run bitcoin v1 and bitcoin v2 concurrently at equal value (by preventing mining of v2 without a cryptographic key). Phase out v1. Then release the mining key for v2 publicly, with a sigificantly hard proof of work of course. Link to comment Share on other sites More sharing options...
G+_Kyle Weller Posted January 6, 2014 Share Posted January 6, 2014 In general though, I believe bitcoin or alternative crypto currencies are here to stay, there is obviously a demand and need for it, the fact that its very hard to manipulate or control is a very appealing feature. If history teaches us anything, it teaches us that Governments have from the beginning of history debased their currency rendering it useless and rendering the people poorer and poorer. The US Debt rate is staggering and there is no possible way out of this mess other than rapid change or a long struggle. If the world keeps using its current monetary system I am sure it is doomed for failure. By creating a currency accessible by all will lift people in 3rd world countries as well as 1st world countries out of poverty. I am an early adopter of Bitcoin, and even today if you were to acquire bitcoin you would be one too, if only 1% of offshore accounts were to convert to bitcoin we would see Bitcoins worth 1 Million a piece. Besides that bitcoin is far more of a secure payment method than credit cards, and costs much much less than credit cards or other merchants. Also their is no seizing of assets as long as you keep your passwords secure. Also to note, the volitility people have mentioned will lesson when the market cap double's its current amount, more money will be on the orderbooks and a few million exchanged into fiat wont move the price as much. So in reality, the more people who adopt Bitcoin, the more stable the price fluctuations will be and you'll be earning interest on every bitcoin bought after you. I think everyone curious should spend a few bucks on bitcoin and store it away, its funny how many people are interested after it being so successful lately. Link to comment Share on other sites More sharing options...
Recommended Posts