$500 million of bitcoin in a landfill

[89th]

https://www.newyorker.com/magazine/2021/12/13/half-a-billion-in-bitcoin-lost-in-the-dump

[jon-nyc]

Yeah I’ve followed that over the years in Matt Levines column at Bloomberg.

[89th]

TLDR for others:

• He mined 8,000 BTC about a decade ago
• He threw out the hard drive a few months later
• The city will not let him look for it in the landfill (would've been easier back then, is much harder now)
• The city still won't let him

[Klaus]

I read estimates that about 1% of Bitcoin will be lost every year.

I wonder what effect that reduction of the available Bitcoin will have on its utility as a currency.

One mistake people often seem to make is that this is deflation, with all its negatives consequences, but deflation, as used today, measures how prices develop and not the total amount of money.

There seems to be quite a bit of disagreement among economists about the implications of crypto currency burning.

[Mik]

There was a segment on bitcoin on NPR the other day. I still follow the Buffett rule - if I don't understand the business I don't invest. There's nothing behind it - its only worth what people decide its worth.

[Axtremus]

@mik said in $500 million of bitcoin in a landfill:

There's nothing behind it - its only worth what people decide its worth.

“Fiat currency.”

[Ivorythumper]

@axtremus said in $500 million of bitcoin in a landfill:

@mik said in $500 million of bitcoin in a landfill:

There's nothing behind it - its only worth what people decide its worth.

“Fiat currency.”

Fiat currency works as long as you governments that secure the common good. You don't even have that with cryptos.

[xenon]

@klaus said in $500 million of bitcoin in a landfill:

I read estimates that about 1% of Bitcoin will be lost every year.

I wonder what effect that reduction of the available Bitcoin will have on its utility as a currency.

One mistake people often seem to make is that this is deflation, with all its negatives consequences, but deflation, as used today, measures how prices develop and not the total amount of money.

There seems to be quite a bit of disagreement among economists about the implications of crypto currency burning.

As more people buy into the system (assuming it keeps gaining traction) - the purchasing power of each satoshi/bitcoin keeps going up. So, in real terms the exchange rate between goods and other currency (USD) should keep tipping towards bitcoin.

Bitcoin becomes something akin to a hard asset, like prime real estate - they won't be making any more of it, and assuming civilization keeps moving towards higher wealth levels things should continually get cheaper in bitcoin denominated terms.

To your specific question - about the effect of lost or dormant bitcoins. The price is going to be set partly by the volume of active trading and transactions. That seems like a tougher question to answer - most coins are not actively traded today anyways. Bitcoin doesn't have anywhere near the velocity of cash.

[Doctor Phibes]

He made half a billion doing absolutely nothing useful, and then lost it doing absolutely nothing useful.

What a world.