Comment by pyre | Hacker News Reader

Comment by pyre | Hacker News Reader

While the title here[1] is better than the title of the thread[2] it's still sort of misleading. There is no consensus in that thread about the status of the first million Bitcoins.

Though there are some interesting comments:

  > But what is true is that anybody running Bitcoin
  > that year with a consumer Core 2 would make about
  > 2000 BTC a day. 
  >
  > [Bounty] 201600 BTC for a time machine, I only need
  > a few hours...

If someone decided to go 'all out' and threw significant computing power behind Bitcoin in the early stages, how would this have affected the outcome. Would it have encouraged others to join in (i.e. "look what he's doing, there must be something to this thing")? Would it have effectively pushed everyone else out of the space (i.e. "I can't match his resources, and he seems to be mining significant amounts of Bitcoins; may as well give up on this Bitcoin thing")?

  > I think the likeliest scenario is that hundreds of
  > people downloaded and ran the client then, got a
  > bunch of blocks that were at the time useless because
  > they were valueless, then deleted their clients.

It seems disappointing (?) that significant chunks of the finite amount of possible Bitcoins might be lost 'forever.'

[1] "Status of the first million Bitcoins ever created" as of this writing.

[2] "Satoshi's Fortune lower bound is 100M USD"

According to these calculations: http://www.reddit.com/r/Bitcoin/comments/1c48u0/how_did_bitc...

The first 1.6 million bitcoins were mined by at most ~15 people.

"It seems disappointing (?) that significant chunks of the finite amount of possible Bitcoins might be lost 'forever.'"

So I'm kinda curious, as the power of the collective network grows, how difficult would it be to turn the incredible hashing rate toward discovering the the private keys of wallets lost long ago?

How do you know if the wallet is lost? I'm guessing most people who lost their wallets, probably lost their public address too. (Unless they were using it as a donation sink or something). Plus, if you can crack the keys, you would just target the biggest wallet and be done with it.

I imagine that cracking wallets that have been dormant for a long time carries less risk of being noticed and/or caught.

Cracking a wallet can be done completely offline. I guess if you mean extracting the coins, yeah. I suppose that's what you'd use a bitcoin laundry service for. (a "mixer" I believe)

There's no difference between a lost bitcoin and one that is unused.

Hashing doesn't help you crack private keys. Bitcoin uses ECDSA to sign transactions, which means you need to be able to solve the discrete logarithm problem over an elliptic curve. In any case, even the combined computational resources of the entire planet probably aren't enough to break a 256-bit ECDSA key in a reasonable amount of time.

True, if by "break" you mean "break by brute force" (and of course with current, non-quantum computing technologies).

Most one-time pubkeys are wrapped in RIPEMD-160 and SHA256, so you have to crack those first before you even get to cracking ECDSA. This also offers temporary protection against sudden appearance of quantum computer. QC can break ECDSA, but cannot break hashes fast enough. So people would have time to switch to another algorithm or at least agree on the last valid blockchain state and stop all transactions.

The protocol could be updated to allow "mining" of addresses that didn't move for sufficiently long time. But that's never going to happen.

The interesting thing here is that Bitcoin isn't set in stone to forever exist exactly as it does today — it depends on the majority of miners not modifying the protocol. I'm talking about what's essentially a 51% attack, but rather than it being performed by a malicious party, what if a technical/political decision with very strong opinions on both sides had to be made? It would be like a democracy where those with the most computing power win.

Or most money, or depending when it happens, most guns.

I suppose you could try and reach a consensus when possible, rather than have a majority dictatorship.

I wouldn't see any real opposition to changing the protocol to allow mining of lost coins for example if some precise and correct definition of a lost coin could be specified.

So, there's 100 coins that represent an abstract value X.

Now there are only 50 coins because 50 were lost. Do they still count as that same value X? What if you can't know how many coins were lost?

In theory this is priced in already. Lost BTC is treated no differently than "hoarded" BTC; in either case it doesn't contribute to market liquidity.

Surely there is, or there would be eventually, value to knowing how much BTC is "hoarded" or even possibly just "saved" and how much is actually "lost".

Well, not exactly, right? I mean, they don't contribute to liquidity, but the difference is that hoarded bitcoins might, at some point in the future, be traded. So it has to be considered when assessing the risk of bitcoins as an investment.

Good point! But that's "1/f" (frequency) liquidity. If the true value of bitcoin is as an instantaneous transfer (and it is), then the chance of a shadow wallet emptying in between the time you received and when you cashed out is vanishingly small. The cost to insure against such fluctuations while it gets multiple confirmations is your "transaction fee".

Bitcoins shouldn't be considered an investment -- the business about hoarding them like taxi medallions because they only go up in value is nonsense. Their value is limited by the low transaction fee for another blockchain. But you're right, you'd have to factor that in if you were actually investing.

The offer/demand will adjust the price of the remaining bitcoins. Think of lost bitcoins as a small donation to all bitcoin users.

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