364 sats \ 10 replies \ @elvismercury OP 5 Dec 2023 \ parent \ on: Stranded sats redux: sats abandoned on SN? meta
Sounds like not, from a technical perspective.
The reason this occurred to me is related to the original stranded sats post (linked in the intro): it makes me fundamentally uneasy to imagine sats slowly draining out of the world.
Upon reflection just now, this might be related to why I got into btc in the first place: when you hear about the dynamics of fiat, you start to see these as foundational forces in the universe: bc fiat can inflate, and bc the incentives exist for it to inflate, it will inflate. That is inexorable. What is finite is the ability to be judicious about it. And the inexorable overcomes the finite, the only question is how long it takes.
Similarly, if there is an inexorable force that btc become lost, either literally lost, lost to dust, lost to accident, lost to forgetfulness and abandonment, that is an inexorable force. Resistance to this entropy is finite. The ratchet only goes one way. And so the supply will trend toward zero, the only question is how long it'll take.
It produces something akin to existential terror.
I share the feels... but, I have a more optimistic view of it. Even though it's not easy to do, I think by the time this amount of loss in the system is realized and has a problematic impact, we will implement one of the many options to create more decimals. Some lightning implementations even already allow .001 sats. Being able to add infinite decimals is what will ultimately make bitcoin infinitely usable in the face of permanent loss and reduction of the integer supply.
In the case of stacker.news funds--this is different than the kind of loss you get from lost on-chain fund keys as the lighting channels that are ultimately holding the user funds are still alive and functioning (meaning the liquidity is still able to move back and forth on the lightning network and continue to function and serve new users). It might actually improve lightning for people to go dormant and store more funds on the network as it creates a base layer of liquidity that can be used as an infinitely toggle-able pressure valve (so long as the keepers of the platform properly maintain their channels).
reply
I hadn't thought of that -- the LN version gives a way out in terms of network utility, so long as the sites are operating ethically, as you described. That's a great insight. It's like our loved ones are with us after death!
reply
Rest easy. It doesn't matter that the usable quantity of Bitcoin will always be shrinking.
-
It might be asymptotic; i.e the losses are shrinking fast enough that the money supply will never fall below a certain level.
-
The amount of money doesn't matter for economic activity; Mises demonstrated this like a hundred years ago. As long as prices can fluctuate and the money is divisible enough, any amount will be sufficient to facilitate economic transactions.
-
There's no limit, as far as I know, to how many decimal places can be added to the bitcoin monetary unit.
reply
reply
To the point about asking dumb questions in public, I actually consider this one of my superpowers as an academic. Most of my colleagues seem to live in dread terror of appearing to not know something and the result is not learning a lot of new stuff or correcting their misconceptions.
Even when I've changed research fields, I feel like I surpass the baseline knowledge of most of the established experts pretty quickly, because I just ask every dumbass question that pops into my head (within reason).
reply
Very true. It's the not always easy ability to let your guard down and ignore your own insecurities. What invariably happens to me in a bitcoin setting is this: I'm not a coder and will ask what I know is a dumb, basic technical question, and suddenly two experts will begin arguing between themselves about the answer. That always soothes my fragile ego.
reply
It's a good ethos. I do the same thing IRL and have enjoyed similar benefits. Surprising extra benefit: other people love it when you do this and they gravitate toward you, presumably as some kind of authenticity signal.
Massively under-valued social skill, as long as you really mean it.
reply
Dumb questions come naturally to me.
reply
Although I should add: the Mises assertion is not entirely convincing to me.
I am convinced that any amount of divisible money could encode any amount of economic activity if it were properly distributed. I think that, in practice, the diffusion of money after a large enough deflationary jolt could prompt a wholesale replacement of that money in favor of another candidate money. I've mentioned this issue before from the perspective of the other direction (unequal distribution.)
My soul is not balmed on this point, but you can't have everything.
reply
It sounds like you've received Mises' insight second or third-hand then. There are of course many caveats to it, but the argument was exactly along the lines of your statement.
reply