Given there is an absolutely finite number of bitcoins doesn't this mean that given enough losses over time we will in fact run out of bitcoins with no mechanism (by design) to replace the supply, adding further deflationary pressure?
Given we're talking about bitcoins this discussion is about as practical as discussing a russian tank invasion of western europe but it's interesting none the less.
Another way:
1. Buy $81,000 in bitcoins
2. Wait.
Seriously, did this actually happen to someone? Are people actually buying tens of thousands of dollars worth of bitcoins?
You could also lose $81,000 in cash by setting it on fire.
Care should be taken with any large currency transaction, digital or otherwise. Though the delicacy of data (from a consumer storage standpoint) is definitely a hit against the concept.
I too was considering some Bitcoining but have these nagging concerns:
1. Seems Mt. Gox is the primary exchange of choice of Bitcoins. What mechanism or oversight in Mt Gox prevents Bitcoin exchange rate manipulation by way of wash trading? http://en.wikipedia.org/wiki/Wash_trade
2. The exchange rate data on Mt Gox shows the value of a Bitcoin shot up 10x in about 3 weeks. Hyper deflation to that extreme is not a desirable attribute for any currency.
Ah, a classic. Here's another post of a guy paying $90,000 for a couple of pizzas: http://forum.bitcoin.org/?topic=137.0
It's fun to look at the reply history and notice that someone new discovers these posts every month like clockwork and reminds this person how much he paid for pizza.
As others have mentioned, exchange rates have exploded since then and the titles are hyperbole. In May 2010, the exchange rate was about $0.005 (when 10k BTC was worth about $40). I don't have exact numbers, but I'm guessing around August 2010 the exchange rate was closer to $0.05 (or 8999 BTC worth ~$500). Given that gridecon says he bought the coins over time, I doubt he lost more than a couple hundred bucks of "investment".
Update: Based on forum posts in August 2010, seems like the rate was $0.06. I was close!
I don't understand. What does the "send 1 BTC to yourself" bit of this process do? I'm confused by what exactly is happening that makes the bitcoins disappear. What are you supposed to backup, if not the "wallet"?
Serious question: If bitcoins can be destroyed so easily (either by accident or deliberately), how can anyone know the actual number of coins in circulation?
How long until someone develops a service that will store and back up your bitcoin wallet for you? How long until that service becomes the "central" place for people to manage bitcoins?
Is anyone else concerned that the number of Bitcoins in circulation could be an issue?
I'm fully aware of the explanation that it doesn't matter when Bitcoins are lost because they are divisible to 0.00000001, but I'm not convinced that it makes sense to be doing business on that scale.
Official explanation here: https://en.bitcoin.it/wiki/Myths#Lost_coins_can_t_be_replace...
I see this as a psychological problem. It's hard for most people to really conceptualize value of very small numbers. Yes, people will just be converting to "real" currency to get an idea of what the value is, but shouldn't a successful currency stand on its own? Shouldn't we be able to understand the numbers we're dealing with?
While it seems to be same as throwing money into fire, it is more of a lack of atomic transaction problem. The backed up wallet has the state snapshotting the account balance. If the new transaction is invalid, it can always be rolled back to the old snapshot. That's how transactional database works. It looks like the new transaction is not atomic. Part of it has been committed (published) and part of it not saved. The system crashes and the account is in the inconsistent state, thus losing everything.
i don't understand how he lost all his money. aren't all his transactions still stored in the block chain? the network should still agree that he has his money, as he hasn't sent it to anyone (other than 1 BTC)
Bitcoin is getting lots of traction these days. I have checked the forum and some people are looking to buy coins (small amounts $100-$150).
I wonder if this buzz is not made by someone holding a couple thousands, if not dozens of thousands of coins and looking to hyper-inflate the market and profit at selling them with these high prices.
Before I buy any bitcoin, I need some questions answered:
1. Currency Exchange: This needs to be legal and available. I don't want to look for a trader in some forum to do the exchange.
2. Stability: I probably want to have my money doubled by tomorrow, but I prefer not to lose them.
3. Popularity: If no buyer accepts bitcoins, so why are they worth it?
Unless these issues get solved, bitcoin is now just a bubble. And like always, the idiots are going to pay the consequences...
Why would I run it on a Live CD/DVD instead of installed one? Especially for this kind of stuff?
It's the same as:
How to Lose $81,000 in Bitcoins
1. Buy 9,000 BTC on one of the exchanges over time. 2. Transfer them all to someone else 3. Don't get thank you
haha
This comes from this forum post: http://forum.bitcoin.org/index.php?topic=782.0
The problem was, that transactions can have "change". So by sending 1 BTC, the client did in fact send 1 BTC to one address and the remaining 8999 BTC to a a newly generated address which is automatically added to the wallet. Since the backup was before this transaction, the backup didn't include the private key to the change address and 8999 BTC were lost.
A really unfortunate incident, as the person simply didn't know this technical detail. It prompted some upgrades to the client, which now generates addresses in advance and stores them in the wallet. When new addresses are needed, the ones from this pool are used first. With a recent client this accident would not have happened. It's still important to know though, that after _sending_ Bitcoins, a wallet might potentially include new private keys that are not in an old backup (if the pool has been completely used up since the last backup).
By the way: All this happened in August 2010, so this wasn't $81,000 at the time.