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Bitcoin will eventually be capped at 21,000,000 Bitcoins, but what happens to all the wallets that are lost? I'm sure thousands of BTC are already as good as destroyed. Even if there weren't millions of USD being printed consistently, they would still print not only new money to replace the old, but also to account for destroyed bills. Would replenishing the supply of lost currency be possible in Bitcoin?
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Bitcoins can be divided up infinitely. So if there was just one bitcoin left (the rest are lost) then there can still be a viable economy with fractions of bitoins.
Lost wallets are only a problem for the people who lost them, not for bitcoin. It would of course limit supply and push the the cost of bitcoins versus other currencies.
Each bitcoin can only be divided into 100,000,000 units. I suppose we could survive on one coin, but it's not infinitely divisible. – tkbx – 2013-03-06T04:22:14.460
2@tkbx: It can be divided into 100,000,000 units today. That would change long before it became a problem. – David Schwartz – 2013-03-06T07:21:59.050
@DavidSchwartz if they wanted to change that, couldn't they just change it so every bitcoin becomes 10? – tkbx – 2013-03-06T12:31:38.947
@tkbx: Yes, that would certainly be one way to do it. – David Schwartz – 2013-03-06T12:32:26.713
@DavidSchwartz so if they were to do either of those, would the people who maintain it just have to release a client update with the change? – tkbx – 2013-03-06T12:38:35.140
@tkbx: It would be a bit complex. It would have to be planned well in advance, a consensus reached, software developed and tested, and so on. Then a block index would have to be chosen for the changeover. Software would be deployed that switched behavior once the chosen block index was reached. Anybody who hadn't upgraded before the changeover would be unable to understand the current blockchain. – David Schwartz – 2013-03-06T12:45:50.363
@DavidSchwartz so basically it's like the weakness where a large mining pool can change the way the network works, but not maliciously? – tkbx – 2013-03-06T15:04:56.517
@tkbx: Yeah, exactly. Power can also be used for good. – David Schwartz – 2013-03-06T19:28:23.643
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Also related, answering the other part of the question: http://bitcoin.stackexchange.com/q/484/516
– Highly Irregular – 2013-03-06T03:48:11.957could the block chain be used to reimburse people with lost wallets? could a future version of the block chain do this? – CQM – 2013-03-06T05:06:05.583