Bitcoin Forum

This proposal aims to address the issue of dormant Bitcoin, commonly referred to as "lost" or "unclaimed" coins, by suggesting a mechanism to recycle them back into the mining process. By doing so, we strive to prevent Bitcoin from being permanently lost and ensure the long-term integrity and scarcity of the network.

Bitcoin is a decentralized digital currency that relies on private keys for ownership and access to funds. However, numerous Bitcoin wallets remain inactive for extended periods, often due to users losing access to their private keys or abandoning their wallets. This results in a significant amount of Bitcoin becoming inaccessible and presumed lost forever.

To prevent the permanent loss of Bitcoin, we propose the implementation of a mechanism that gradually and systematically sends dormant funds back into the mining process after a predefined period of inactivity. Specifically, if a Bitcoin wallet remains not accessed(by simply logging on, opening the wallet) for a continuous period of ten years, the funds associated with that wallet will be redistributed back to the network through the following steps:

A comprehensive analysis of the blockchain will be conducted to identify wallets that have not shown any activity for ten years. This process will be automated to ensure accuracy and efficiency.

This process will involve adding the dormant coins to the mining reward pool, where they will be available for miners to compete for during their usual mining operations.

To ensure fairness and prevent concentration, the redistribution of dormant coins will be algorithmically divided among miners based on their proportional mining power, similar to the current mining reward distribution.

The entire process, from identifying dormant wallets to the redistribution mechanism, will be transparent and publicly auditable. Detailed reports and statistics will be made available to ensure transparency and build trust within the Bitcoin community.

Preservation of Scarcity: By recycling dormant coins back into the mining process, we ensure that the total supply of Bitcoin remains finite, maintaining the intended scarcity and economic principles of the network.

Encouraging Active Ownership: This proposal incentivizes Bitcoin holders to actively manage and secure their wallets to avoid the risk of losing their funds. It promotes responsible ownership and strengthens overall network security.

Enhanced Network Stability: The recycling of dormant coins helps distribute previously lost value among active miners, potentially reducing the concentration of mining power and contributing to a more stable and decentralized network.

Minimizing Economic Loss: By recovering dormant funds, this proposal minimizes the economic loss associated with permanently lost Bitcoin, ensuring a more efficient allocation of the currency's value.

This proposal aims to address the issue of dormant Bitcoin by implementing a mechanism to recycle lost coins back into the mining process after a specified period of wallets not being accessed. By doing so, we can prevent permanent losses, enhance network stability, and ensure the long-term integrity of the Bitcoin network. This proposal welcomes community input, further analysis, and consensus-building to refine and implement the suggested mechanisms successfully...just dont be a dick about it like in other posts i have seen. This space can be very very toxic.

Because certain UTXOs are dormant, that does not mean they are lost. There is also no need to change anything.

Lost coins are not actually lost, its value would be transferred to other people that still have access to their bitcoin, as the bitcoin that are still accessible become more scarce.

Bitcoin wallet activity are not logged, and there is no way of telling if a user has accessed his wallet because that is not how Bitcoin functions. Something like this would either require a central authority or for such activities to be included in the blockchain.

In addition, reclaiming or recovering lost Bitcoins presents an entire can of worms. There is no telling of the intentions of the owners, whether they would like to keep and preserve the Bitcoins or if they are truly lost. This process would just be outright stealing the Bitcoins from them, even if they were not moved for long periods of time. The network nor the algorithm shouldn't act as the government, to reclaim assets based on arbitrary criteria.

Redistribution of coins isn't necessary because there isn't any threat to Bitcoin's existence if we can just make the denominations a lot smaller. The scarcity of the network and the pre-determined supply of Bitcoins makes it valuable and predictable. Re-distribution of Bitcoin causes unnecessary stress to the economic system, rather than the fixed inflation rates, the market would experience inflation in certain years and deflation in certain years which makes it unstable. Scarcity is directly correlated to the value as well, if the miners were to expect rewards to rise in the future, they would intentionally manipulate the system such that they would instead mine in the more profitable years.

How would you like to test that coins are "lost" or "unclaimed" coins?

Sorry you cannot be sure that address whit balance are lost . A lot of People has BTC , but they do not anything -> they hold.


Who according you should decised we will take this address and take the BTC for myself? it is Theft!

How to address coins are "lost"?
Whenever you access your wallet, a 10 year timer will begin/reset. If the wallet is not accessed again in 10 years the coins will go back to the mine. Keep in mind, i never mentioned activity (sending or receiving), simply accessing, or logging on.

It breaks some protocols, for example Proof of Burn. You can burn a coin in your coinbase transaction, just by taking less coins than you could. Then, there is no lost UTXO, everything is 100% clean, you just have some coinbase output that has lower uint64 value, and there are no other traces. But even if you have some OP_RETURN, then still, there is no reason to bring it back, because using OP_RETURN means that a particular user intentionally removed some coins from circulation.

Also, your proposal breaks some puzzles, for example this one: https://bitcointalk.org/index.php?topic=293382.0
In that case, you would need to refresh those addresses every 10 years, just to say that "this puzzle is still not solved, but because of demurrage rules, it has to be recreated".

You cannot prove that you have access to some coin, without creating some kind of signature. You need to make a transaction, sign some coins without moving, or wrap some proof in some Homomorphic Encryption, but that way or another, "logging on" is not enough, you have to touch your private keys if you want to prove something. Also, you have to choose your accepted proof carefully, because there are ways to trick that you own something without having keys, for example in this way:


Nobody has access to 1psPJZYEJrjPtY6kw5Tqtj4mW2yXSSDuH, but this signature is valid. So, if you want to accept some proofs, then choose them wisely, to avoid attacks like public key recovery.

If there will be some consensus rule, like "UTXOs not touched for 10 years can be claimed by miners, without signatures", then it will create a huge incentive to mine empty blocks. Currently, when the basic block reward will drop to zero, miners will need to encourage users to move their coins, because fees will be the only incentive. Your proposal breaks that assumption, because miners could collide, and say "let's mine empty blocks for 10 years, and then we will start collecting a lot of coins from the old times, before all of those halvings".

Note that "the current mining reward distribution" is "winner takes all". Of course, we have mining pools, but it is not a part of the consensus rules. Also, how do you want to compute "their proportional mining power", without writing all shares on-chain?

I hope you don't want to introduce manual selection of outputs. That would be far worse than some simple, and automated rule, like "move UTXO without signatures, if age is greater than 10 years".

In general, demurrage is something that could be tried on some altcoins, or even better, on some test network. But doing that on Bitcoin would be a disaster. That way or another, if you think seriously about it, you should start from some testnet anyway (or maybe even signet, if you want to manually decide, which coin should be redistributed).

Why do people care so much about "lost" coins anyway?
What's in it for them, or anyone (except miners)?

I don't get it.
You should instead be happy for every coin lost or burned.

Becouse:

1. They want money for themself.
2. It will kill BTC

Satoshi once said that.😉
I don't remember the quote/unquote though.

OMG, you are telling me to set a timer or someday I will check my wallet and will see someone took my coins! Never going to happen. You are surely not the first one telling such stupid idea. I read the same somewhere long ago.

Maybe this one?

The only achievement of something like this is forcing people to spam the blockchain with pointless transactions.
For example I have coins that I acquired back in 2014 when I found out about bitcoin and have not moved them since because there was no reason to move them and I don't want to! Something like this is going to force me to move those coins for no good reason!

Both doesn't make sense. For the first point, an increased circulation results in the decrease in the value of each coin. There is no point in recovery that benefits all.

For the second, Bitcoin is actually designed to be deflationary in the long run. Economic concepts says that deflation is bad but that concerns more of the fiat and their function as financial stabilizers. Having a lower amount of Bitcoin doesn't actually affect Bitcoin. You can go beyond Satoshis as the lowest denomination.

1. Current mining reward distribution actually is "winner takes all".
2. Hashrate of each miner/pool only can be estimated[1] based on block they've mined.
3. How long past blocks should be checked in order to determine the distribution?


Bitcoin protocol doesn't force wallet software to make log about when the address/wallet is accessed. So your idea is essentially impossible.

[1] https://bitcoin.stackexchange.com/a/115090 (https://bitcoin.stackexchange.com/a/115090)

I'd like to see your list of lost coins please

I must say, I have a lot of problems with your proposal. First you usually can't decide in a trustless and decentralized way which coins are lost or where the owner simply doesn't want or have the need to move them. There shouldn't be an authority or force to have to move coins. Period.

I even don't see the need for provably lost coins to recycle them back into circulation. Lost coins make those from everybody else a little more valuable. I don't appreciate any scheme that destroys coins deliberately, but as Bitcoin is decentralized and trustless I can't do anything about it.



Miners compete against each other and as said already there's a winner who takes all the block reward. Now you want to redistribute recycled coins based on estimated proportional mining power? Proportional to all miners at once? I'm not sure if I understand you properly. Please, elaborate in more detail!

Transparency and auditability sound nice, but explain how you want to do that trustless and decentralized. If an audit shows issues, how do you want to fix those? Transactions are final and non-reversible.



You have that already without your proposal. Active coins in circulation actually benefit in value by provably lost coins. You might not like it but that's your problem.



By the value of Bitcoins every owner is already incentivised to not loose his private keys or wallet(s). Your proposal forces owners to otherwise unnecessary actions if they don't want or need to move their stash.



I see a contradiction here as concentration of mining power would benefit due to your proposed redistribution by proportional mining power.



We have about 21*10¹⁴ coin units at max with current design and even if we loose half of it it's still more than 10¹⁴ coin units. I don't see the need for recycling nor it to be fair and justified in any way.

Let's keep it simple: Not this shit again!


You're talking about taking people's money, forcing people to move their money around so they can't be seized by a centralized authority that can decide and change those criteria as it sees fit, and despite going against everything Bitcoin stands for you want us to just congratulate you for your great idea and not to stick it in the lost hole of Uranus?

Didn't even thought of it from this point of view. Indeed, if people have Bitcoin hodled for longer than 10 years, then, they would have to move it forceably. It seems to me not a good thing. Of course we al would like to see Satoshi's sats being moved but that's just a wish, not a real need!

I also think that the community needs to focus more in other mechanisms to help avoinding to "lose" Bitcoins instead of trying to recover them or sending them back to circulation via mining!

Nonsense. It is not an "issue" for a person to decide that they want to save money for the future and not spend it right now.

I prefer to just call it what it is, "unspent".

Say what you mean: "suggesting a mechanism to STEAL money from others"

Nothing lasts forever. If you don't want to lose your bitcoins, then make sure you have a good system of storing and securing your private keys.

Sounds to me like you're trying to DESTROY the integrity, not preserve it.

Wouldn't permanently lost bitcoins IMPROVE scarcity?

Or simply choosing not to spend their bitcoins.

That's the point, isn't it?  My bitcoins are SUPPOSED to be inaccessible to you.

You can presume whatever you want, but that doesn't give you the right to steal them.

No thanks. This has been suggested hundreds of times before. Your scam to steal bitcoins is not welcome in the bitcoin community. Go take your stea-a-coin altcoin idea elsewhere. I'm sure there are some scammers and thieves in the world that would love to support you in this endeavor.

There's no such thing as "logging on" to Bitcoin.

There's no way to know whether or not someone has "opened their wallet". Perhaps you fail to understand what the word decentralized means?

Ten years? Ten years!?!

If someone in their 20s wants to use Bitcoin to save for retirement, they may not touch those bitcoins for at least 40 and possibly as much as 70 years! And you want to steal their bitcoins just because they are planning and preparing for their future?

So you're already aware that this nonsense has been presented in the past, and you're already aware that it wasn't received well, and yet here you are being a dick about it and rehashing the same tired trash yet again.  Just go away please.

That's what happens when thieves come here and try to convince the gullible among us to join them in their crusade to take bitcoins away from others.

I'm saving bitcoin for retirement and will not move my coins for 20 years. You've just stolen my money.
I've timelocked some bitcoin for 21 years as an inheritance for a new family member. You've just stolen my money.
I'm a political dissident who has been detained without trial by a dictatorship for 15 years. You've just stolen my money.
I've been sent to jail for non-violent victimless crimes for 10 years. You've just stolen my money.
I've been working in another country for 10 years with some wallets safely stored at my parent's/other family member's house which I have not accessed. You've just stolen my money.
There are a hundred other reasons someone might not move their coins for 10 years. That does not give you the right to steal them.

And that's without even touching on the crazy idea of implementing a system which allows coins to be moved with providing a signature.

It's Bitcoin, not a domain renewal, you know.
Also, that approach, to recycle lost coins into mining process, is absolutely wrong and devastating. Imagine, I have a wallet where I hodl bitcoins. 8 years have passed and somehow bad thing happened to me, I got into a coma or was arrested for political reasons or etc. Let's assume I got wrongly convicted of attempting a crime. I spent 4 years in prison and then they freed me. What happens when I go outside? My wealth, my bitcoins, are lost.

Also, radical changes like that, will finally bring bad power. If people feel okay to do such a huge changes, then I'm afraid a dictatorship will slowly take over bitcoin. At first we set 10 years, then 5 years, then someone will come up with an idea to recycle all bitcoin wallets that don't come from exchange and aren't KYC verified.
Just leave things the way they are, there is no need of such a change at the moment.

There is no way to distinguish permanently lost coins from those that just weren't moved for a longer time. If we confiscate old coins, who would still pay for digging up trash dumps (https://edition.cnn.com/2021/01/15/uk/bitcoin-trash-landfill-gbr-scli-intl/index.html)?

As regular user or non technical user I think it will impact me very badly. They might just take away my Bitcoins because they might think my Bitcoin is dormant due to inactivity but in reality I would be holding them for long period of time. This need not to be implemented because it will also cause issues with market dilution. It will liquidate enormous amount of Bitcoin and thus devaluing it.


If you just check above stats then you will understand what I mean or others on the thread Are saying.

It’s superseded problem if we implement such algorithm. Half of the Bitcoin will be sucked into mining all the time if this happens. Crazy.


Reference for the Quote Here.  (https://decrypt.co/126006/more-bitcoin-than-ever-is-now-dormant-heres-what-that-means?amp=1)

Initially, I also thought about all these cases (especially about political prisoners, since I'm from Russia, and my wife is from Belarus). But then I noticed that the 10-year timeframe is not the OP's fundamental stance but rather an illustrative example. So, let’s think about following questions:
1. What if miners start sabotaging block creation after 2140? Would introducing some coins that haven't moved since January 2009 help? (Similarly, in four years, in 2144, coins untouched since February 2009 could be put into circulation, and so on.)
2. Some say quantum computers could crack private keys of UTXOs created in Satoshi's time. By the time such computers exist, nobody will be using the old algorithms (the community will be forced to transition to something else). But would it be fair that the UTXOs from 2009 go to the quantum computer developer? Wouldn't it be better to change the consensus regarding UTXOs made with old algorithms when transitioning to new ones?

In general, I can imagine situations where the questions raised in this thread will become relevant. So, this topic doesn't necessarily revolve around theft.

2. Some say quantum computers could crack private keys of UTXOs created in Satoshi's time. By the time such computers exist, nobody will be using the old algorithms (the community will be forced to transition to something else). But would it be fair that the UTXOs from 2009 go to the quantum computer developer? Wouldn't it be better to change the consensus regarding UTXOs made with old algorithms when transitioning to new ones?


answer:
First of all, these mythical quantum computers. They are not and will not be useful for such tasks. All those fancy scientific studies are tainted with elaborate theories. Notice that so far, they can only confirm algorithms that have already been devised. The states of the so-called qubits as 0, 1, or unknown, don't really matter. If it were otherwise, why would people keep creating new supercomputers when they could have a super quantum computer for half the cost? Please stop scaring people with these quantum computers and what they cannot do. If you had experience with such computers (and I do), you would know that it's a fairy tale, like something from moss and ferns.

What would be the incentive for miners to start sabotaging block creation? Mining honestly would still net them transaction fees. Mining dishonestly just for the sake of it earns them nothing unless they control 51% of the network, which is incredibly unlikely.

Further, if you start unlocking unmoved coins, you create a huge incentive to mine dishonestly. If the total block reward is (for example) 0.5 BTC from fees, and you release 50 BTC, then there is a massive incentive for every individual miner to try to reorganize dozens of blocks to try to claim the 100x reward for themselves. This problem compounds the more additional coins you release.

No. I think it is far preferable for some old coins to be stolen and reenter circulation by people who have sufficiently powerful quantum computers, than it would be for developers to overturn one of the key pillars of bitcoin and start deciding what happens to coins they don't control.

I'm not judging OP, and what I'm going to say is nothing against him nor am I trying to offend him. BUT, I'm starting to believe that laughable topics such this are mere 4D Chess moves made to start a debate and see if it catches many people's attention. Perhaps "some people" hope to see some gaslighting in the discussions to happen? Haha. 8)

What recycling of "dormant coins" actually does is KILL Bitcoin's immutability. Moderators should probably lock the topic and stop the naivety of the proposal.

Could you provide example of sabotage? Invalid block or transaction would be rejected by other node (whether it's owned by pool, exchange or somebody else), so sabotage option would be very limited and probably lead to economical losses.


Consensus for such thing probably never achieved (as in majority agree to specific action) due to opinion difference.


Quantum computer isn't myth. The reason people create supercomputer rather than "super" quantum computer is nobody have ability to build large scale quantum computer (have many qubits) and i expect it won't happen anytime soon. And i'll reiterate that ECDSA is vulnerable to quantum computer.

In summary, it is estimated that achieving a quantum computer with a million qubits is a task that would require decades of research, technological development, and investment. Whether this will happen in 2500 or later is difficult to predict.

So there is no scary:-)

Did you mean rather 2050 than 2500? There's some hype around quantum computing and computers and as I've read somewhere too, as @ETFbitcoin says, ECDSA could be attacked with a sufficient quantum computer. OK, I'm no expert on this field. All I know, you would already need a lot of stable qubits or even way more less stable qubits to have error correction in place. You'd need numbers of qubits that are far from current possibilities even for multi-billion $$$ companies.

Current qubits seem the have an error corrected lifespan of only a few milliseconds[1]. That's not much and their total numbers in current quantum computers are still rather low. Yes, technology and research will prosper but it will take time and I assume still a whole lot of time to be scary for Bitcoin's security or attacks on RSA (efficient factorization of huge prime number products).

I don't expect major breakthroughs happening in short time periods. It likely will happen gradually so that there should be enough time to adapt. I hope that's not too off-topic now.

---

[1] https://www.sciencealert.com/physicists-extend-qubit-lifespan-in-pivotal-validation-of-quantum-computing

Let's imagine a situation. The year is 2140. No one is using the first layer for transactions anymore. All transactions are conducted on something like Ark protocol. There are 100 Ark service providers collectively generating 100 transactions in each block. They set a fee of 1.20 satoshis per vByte in their transactions. Miners go out of business and stop producing blocks. Network difficulty drops dramatically, and Bitcoin ceases to be a reliable store of value. Wouldn't it be better to take unused coins and use them to incentivize miners to continue their business?

We can not even begin to imagine what the situation is going to be like 100 years from now. :P

And what would we do when we run out of such coins to "steal" and pay miners? It is a finite number after all.

Meaningful quantum computers are a long way away, and we do not need to start building quantum proof bitcoin just yet, but I don't think they are 500 years away.

Even if everyone was using second or third layer solutions rather than the base chain, you still need to use the base chain to enter those layers. With Lightning as it stands now, even just to get everyone in the world to open a single channel would provide decades of on chain transactions and fees for miners. But with things like taproot and channel factories, that becomes more efficient. What other layer 2 or 3 solutions will we have in 100 years? And then there are things like merged mining, which already happens. We simply have no idea what the ecosystem will look like in 100 years.

As pooya87 points out, taking coins which haven't moved in x number of years gives rapidly diminishing returns. You'll potentially get millions in the first year which will cause absolute havoc for miners trying to reorg the chain to claim the rewards themselves, and then that will rapidly fall off and you'll be left in the situation you were in before.

So, this is a thread describing a proposal, without the actual proposal text inside. Is this topic written by ChatGPT?  ::)


It'll fall flat just like the 2140 block reward exhaustion.

I don't really see a point to giving miners a temporary incentive to continue mining when it's literally no better than a block reward (at best - if implemented poorly, it can be used by the first miners to defraud the other miners).

In the year 2140 we start stealing the coins which have been not moved since January 2009.
In the year 2144 we start stealing the coins which have been not moved since February 2009.
...
In the year 8428 we start stealing the coins which have been not moved since January 2140.
...

This means Bitcoin is already dead. No point in discussing about coin recycling.

Would it be better to take someone else coins to incentivize the miners? Obviously not. Would it be better to take lost coins? Maybe. Is there any way to determine if a coin is still owned by someone? No. So you can't take unused coins without confiscating some coins in the process.

Besides that, if we have to rely on "unused" coins to incentivize the mining process, then the Bitcoin network would be dead sooner or later.

Let us reach year 2140 without sustainability issues, and our great-grandchildren can continue this discussion, because I'm afraid there are a lot of obstacles until that year.

The same problems apply here.
We can't decide what people should do in a hundred years from now when we aren't even around.
You also significantly decreased the incentive and also re-introduced a decreasing reward since the amount of coins "lost" or amount that hasn't moved in a long time is decreasing per year as price goes up and more people get in. That means after a couple of "periods" we could theoretically end up with a fraction of bitcoin as the total amount "lost", which is like halving all over again.

At some point as you keep increasing the complexity of this idea, it raises the question of why not just increase the supply in the year 2140?

So at an average rate of 4,320 blocks per month, this means you would release coins at a rate of 3 blocks per day every 4 year period. So that first day will see (we assume) 150 BTC released. Now, let's say the total block reward from fees alone is 0.5 BTC, which is probably a high estimate. This means 72 BTC a day from fees, and 150 BTC a day from releasing old coins. Every large miner is therefore incentivized to ignore blocks from other miners claiming the old coins, and instead continue to mine blocks on their own chain claiming the old coins for themselves.

Also, the very fact you use the word "stealing" explains it all, really. At no point should the protocol ever steal coins from other people. There is a huge difference between a random malicious actor with a quantum computer stealing coins, and baking stealing coins in to the bitcoin protocol.

What happens when bitcoin has become so valuable that the total amount of coins not moved since January 2140 is a few hundred sats at most? The whole system collapses and you are back to only relying on the fees.

This is not a solution - only a delaying tactic - and one which would fundamentally alter the entire concept of bitcoin.

1. There is nothing to suggest that miners will sabotage the network after a certain date nor do I understand what you mean by sabotage.
Forcefully accessing coins that are stored securely in wallets is not a long term solution to any issue Bitcoin has or might have in the future, but it is a short term way to break trust people have in the network.

2. If there is a network transition, it affects all bitcoins stored on it.
except in cases where vulnerabilities are discovered on individual wallets used to access the private keys.

If the network has survived a hundred years without those coins moving, it is not necessary for the future of bitcoin. There is no upside to a decision like this and it not a problem we will have to face in our lifetime.

- Jay -

Guys question, there are an couple of addresses from 2010 that holds more than 100,000BTC

What would happen if the owners recovered it's private key now or in the next years and suddenly woke up and moved some of its coins?  ??? ??? ??? Perhaps it would be Satoshi?

I guess they would spend them. What's the problem?

What would happen if you buy BTC now, and decide to hold and spend it after 13 years, it is either you lose the keys and the coins, or you provide the private keys after all the years and spend or move the funds. That is what is going to happen to the funds in the addresses you noticed.

Perhaps you're asking if it will have an effect on the price.
100,000BTC is a huge chunk of the total 24hour trading volume. If a previously dormant wallet became active and sent them to an exchange address, it could influence the market slightly. If it was traded on an exchange and not done OTC it will also have an effect on the market.

But the influence will be short-lived and likely have a less than 1% impact on the price

Exactly right. There is no way to tell apart who is just hodling and not touching their coins and who has lost their coins. And even if someone did lose their wallet access, that does not give anyone the right to take their coins. So OP's suggestion of recycling coins is basically just simple thievery. And if Bitcoin would ever be manipulated in such a way, I would not feel safe to hold Bitcoin anymore.

But lost coins are good for the Bitcoin economy. I do not understand why we need to worry about them in the first place. Less coins available means that the rest of the coins are worth much more, or am I wrong?

No, it's not that laughable at all. If we keep in mind that people don't take care of their wallets and use service like Ledger Recover, then we can say that number of lost bitcoins will grow in near future. At the same time, if demand on bitcoin tremendously rises, that will also mean that a lot of new people won't be able to keep wallet/coins safe and they'll lose them too. Imagine, Binance loses its reserves, which is about half a million bitcoins or hackers steal thousands of bitcoins multiple times but burn every proof, including wallet key/seed before their arrest? Everything can happen.

100,000 BTC owner won't be stupid enough to send all of them to exchange address. Oh my god, it's even riskier to send 10 BTC because what are you going to do if exchange blocks your funds for some unreasonable reason?

I noticed many posters are trying to go around the hypothetical situation and question. Let's make internetional happy and give it a hypothetical answer.

 8)

For me the answer is definitely NO because it breaks blockchain immutability, one of Bitcoin's important social contracts. I believe once given a hard choice of "change or die", the community could come behind the consensus of removing the supply limit and choose to see the currency become inflationary to keep incentivizing the miners than break the concept of not your keys not your coins.


OK, and do you think breaking Bitcoin's immutability is the answer?

What would happen is that a bunch of Twitter bots would tweet "WHALE ALERT" or some other such asinine bullshit, a bunch of newbies would panic and sell, the price would go down a little, most of us here would buy more during the temporary sale, and all would be back to normal within a week. Nothing about bitcoin itself would change in the slightest.

Is that not just stealing a little from everyone rather than stealing a lot from a few? Making it inflationary makes everyone's coins worth less. I don't really see that as being a better solution.

At the moment, this is what I think (https://bitcointalk.org/index.php?topic=5459822.msg62557826#msg62557826).

This proposal won't fix the problem, it would just delay it, also, whatever issue you are describing is probably going to happen way before 2140, in 50-60 years at best the block rewards will be next to nothing, and then the incentives to mine BTC would be different.

As it stands today, all mining is done for the incentive of profit, but at that point in time, if transaction fees are too low to keep a reasonable hashrate on the network, a new incentive will be created, something like mining to "protect your assets".

It could also be something like "blockchain fee" that everyone who owns BTC and wants to secure it, must pay a small fee to protect the blockchain and thus protect their own assets/transactions.

The way that would work is unknown, it could be as simple as people mining at a loss to maintain the network or a protocol change that takes a certain % of all bitcoins in circulation and put it back to block rewards.

An example:

21,000,000 coins in circulation, let's say the target is to keep block rewards at 3 BTC per block, it means we need 157,680 BTC  a year, we could charge 0.75% "blockchain fees" per year and keep the network as secure as it will be next year when the block reward drops to  3.125 BTC.

In fact, depending on the fiat value (or whatever the representation of the electricity bill then) we could get away with 1 BTC block reward or even less, and still keep a high enough hashrate that makes the network more secure than it is today or even better, so that suggested fee could drop to below 0.25% a year or so, and it could be adjustable based on some variables.

Notice the above proposal does not increase the supply of BTC, it treats all BTC the same regardless of it's history/owners, and it does maintain a very good incentive to mining.

I am not sure if anyone has ever thought of such a proposal before, but it shouldn't be so uncommon, there could be many other proposals on how to fix that potential issue should BTC stay treated as a store of value and rarely transacted, people will find a way to solve it (we are likely not going to be there to witness it).

Economically speaking, your proposal is really no different to raising the supply and having an endless emission of bitcoin.

In your proposal you take a fee of (for example) 0.5% from every coin every year. Each year, everyone loses 0.5% of their coins and gets 0.5% poorer.

Alternatively, by raising the supply and minting an additional 0.5% of the cap each year, then everyone owns the same amount of coins, but a smaller proportion of the overall supply. And so each year everyone gets 0.5% poorer.

The end outcome is the same regardless of which method you choose.

Bitcoin will have endless emission regadless, we do not know what the value of transaction fees is going to be, it could be greater than the current block rewards and thus more hashrate could be running at a profit then.

.

If the rewards from fees are not large enough to keep enough hashrate securing the network, then everyone who owns only Bitcoin will get 100% poorer.

The outcome is far from being the same, one main point of strength of Bitcoin is its finite supply, raising the supply past 21M even if it was 1 coin a year will make the supply infinite just like all the fiat currencies,  the economical difference between that and circulating a tiny portion of BTC from hodlers to miners is entirely different.

By rasing the supply Bitcoin is guaranteed to lose value, while with extracting fees you just distribute a small portion of that values between different addresses.

Ya I personally wouldn't want to pay fees just to store my coins, but it is also naive to expect that my coins will be secured enough when nobody has any motive to point hashrate at the network,  when a few dozen double spending attacks are done cheaply without an issue, everyone will be glad to pay a small fee.

The alternative to that would be random people mining at a loss just to maintain the network, that could work but difficult to guarantee.

Now all of that is probably not going to be needed given that in 60-80 years time you would expect the transactions will be a lot higher in number as well as value, but you can never be too sure.

It depends on how you interpret it. The key thing about the value of a currency is the amount of currency in circulation, not the entire possible supply of the currency. For a currency that has a recirculating supply, there would be a fixed inflation rate of its equivalent in the fees. As compared to an endless emission, think a currency with its equivalent inflation, that would be the same. Though it can be argued that the real inflation of the former is constant, because they are always recovered and the effects of the burned coins are cushioned. If I had to choose between the two, having a stable inflation rate rather than a fixed tax is far less complex and less riddled with politics. It is very much a slippery slope to go into; miners would always want to earn more and users would always want to pay less. Tail emission might be a place to start in that regard.

The economics of mining by and large follows the value of the coin, which is regulated partly by the difficulty. Our optimal outcome would be to have a network that has a high difficulty and thereby a high opportunity costs that comes with any attack. If we were to consider the deflationary nature of Bitcoin, it is more likely for the price to increase in tandem with the deflation rate. Whilst for one with an inflationary nature, we would have the price decreasing with the inflation rate.

Case in point, if we do not see high adoption rates by the time mining rewards dwindle even further, it would just be an indication that Bitcoin hasn't been a successful experiment. More likely than not, a replacement of Bitcoin would be readily available by then and it would provide more utility than what we have.

Paying transactions fees is vastly different to an endless emission.

I don't disagree, but that doesn't change any of the points I made above.

It is no different for the users. The whole point of a fixed supply is to stop your holdings being diluted by inflation and losing value. If you start taking x% from everyone, the same thing happens.

If I have $100 and you take 1% of it, my money is now only worth 99% of what it was worth.
If I have $100 and you inflate the supply by 1%, my money is now only worth 99% of what it was worth.

There are other options beyond taxing everyone one way or another, though, such as sufficient on chain fees or merged mining.

I have to disagree, the main marketing point for BTC economy is it's capped 21M, nobody knows what is the current supply unless they google it, and nobody even cares about it, the same concept of the 21M max supply has been in play since bitcoin's inception, I have yet to see anyone who invests into bitcoin because it's current supply is 19.x M.


I don't think that would make BTC unsuccessful, in fact, I do think that the number of transactions is going to enter a downtrend at some point, despite BTC gaining more popularity and users, BTC seems to work better as a store of value than a medium of exchange for daily usage, the more value it gains (vs other goods) the less it will be spent, I think in 5-10 years transactions will be close to flat, everyone will be buying it to store, so the average user who makes 1 transaction a day will likely only have 1 transaction a year or so.



Ya pretty much as what ranochigo said, it depends on how you want to interpret it, you guys are looking at it from a personal perspective and the effect on the user individually, I look at it as a global effect on the whole currency, while the numbers are the same, the effect is likely to be a lot of different, especially if the fee is very low, say it's 0.1% a year on all coins, by doing this you maintain one of the most valuable aspects of BTC economics which is the finite supply, going beyond 21M even with 0.1% coins a year will take away the concept, so the difference between circulation 0.1% and injecting new 0.1% supply is pretty large, its the difference between finite and infinite.

When miners take 0.1% of your coins it doesn't make Bitcoin less scarce, the scarcity of bitcoin remains the same regardless of the fact that you now own a little less of it, when you create 0.1% out of thin air and give it to the miners, every block that passes affects the scarcity of the coin, the effect this could have on it's value is probably going to be more than fee which you could otherwise pay to the miners just to keep that 21M cap.

That is because people have the perception that Bitcoin is capped at 21Million, and there is no tax. Your 1BTC today is 1BTC in 10 years, and Bitcoin is taken to be deflationary specifically because of that. A tax has an equivalent inflationary impact in that regard. The economics and the math would say otherwise, a generalization of the population would make any price movement inaccurate. I, for one wouldn't use a currency that has a tax, precious metal don't disappear when I keep them in the vault.
Then unfortunately that is not what Bitcoin is designed for. Bitcoin should be a medium for transaction, for which it was defined in the whitepaper and the progress that we've made with regards to scaling has pointed to that. Bitcoin is not a speculative asset and it would be dangerous for Bitcoin to go down that path.


It will definitely be very different, but both of it amounts to inflation. Inflation works in a very simple manner, which is what o_e_l_e_o described, for a store of value to be worth less than before. Injection of the funds actually is better, because you have to compensate for the lost coins that can never be recovered. However, if in the long run, you are always recovering the lost coins with your schemes, and thus inflation is always >0. The scarcity of Bitcoin if it is:

40 BTC generated but 50 BTC lost is better than
50 BTC recovered but 50 BTC lost per year.

That is what economist and quants are looking at when deciding on the viability of economies.

The issue is that the recirculation is infinite, which means the wealth is always being redistributed, which increases the inequality that you're already observing.

Actually, if you compare it to the actual tax that we have in the government. People who are holding less are affected deproportionately, and you end up in a scenario whereby miners are always far, far richer and we are always getting poorer. Counterproductive for what Bitcoin set out to do, taxation is crime.

Yes, but precious metals are ever increasing in supply, the % of the precious metal you own is always going to decrease, this is why BTC is superior to gold for an example, because we assume that the max supply will be capped by 21M, and ya of course, no fees on storage so your 1 BTC is always 1 BTC and thus the % you own is always constant (unless you decide to increase it or reduce it yourself).

But that is the perfect scenario when we have enough transactions to maintain the network, if we don't, there is no perfect way out of it, you either put fees on storage or lift the cap and make bitcoin's supply infinite, assuming the other other ideas like merged mining don't work, which would be very likely anyway.


Ok this is going to be a different topic, but not sure why you think BTC was not designed to be a store of value, the P2P ecash system doesn't mean you have to spend it every day, it simply means that you can own it, use it, and send it without the approval of a centralized authority, wether you use it to buy coffee or store it for 50 years it makes no difference to the main concept of BTC.

In reality and since "good money drives bad money out of circulation", the less people spend BTC the more value they think it has, ultimately, we get to a point where nobody would want to spend dear BTC unless they are forced to, there is nothing wrong with that IMO. 



That is not very accurate, your store of value will not be worth "less", you would have "less" of it, and there is no inflation in the proposed scheme, inflation is present in the other method which is injecting new BTC into the circulation.


We have no proof that there are any "lost" coins, we don't know how much there is, and we don't even know if such a thing exists, to begin with, aside from the small incidents where people lost their PK (which they may recover at some point). The advertised "lost coins" in the media could be unrealistic, does anyone know for sure that Satoshi's coins won't be spent at some point in the future? we don't.

Besides, when you start creating more supply, it's only a matter of time before you create more coins into the system than those "lost coins".


wealth will be redistributed whether it's via fee/tax or creating a new supply, if all you have and can afford to buy is 1 BTC, your wealth will decrease with every block that is mined.

There are many forms of taxation, when you increase the supply by 1% you are simply taxing everyone who owns the currency by 1%, taxation done by the government is bad because they tax you twice when you make money they tax you a good %, and then their ever printing is also another form of taxation, but BTC taxation will be done only once, either by increasing the supply as you said you prefer or by paying fees/tax to store your coins, looking at the numbers it's exactly the same.

Regardless of the mechanism or the wording we put around it increasing the supply and extracting fee is the same in terms of simple math, my argument is that the psychological/economical effect of lifting the 21M cap is worse than charging a storage a tiny fee, but of course, I could be wrong.

With that in mind, as I said again, given my age, I will most certainly not be there to witness all the potential future arguments in regard to this subject when and if it happens, I hope that transaction fees will be good enough to maintain a good level of security so that Bitcoin community won't have to have these arguments and debates, it's an interesting discussion, to say the least.
 

Actually, most precious metals are limited. You're relating your percentage holdings to the circulation, not the total supply. Scarcity is present everywhere in the real world. Bitcoin mining is essentially mining gold, just that we are aware of the exact number. Your resources are 100% limited and there will be a day where gold cannot be found in the ground any more. That is akin to Bitcoin mining and the whole idea behind Bitcoin. That is why we call it digital gold.

It does. The whole point of its worth is because people think of it as something of use. Platinum are on catalytic converters because they are good catalysts, gold is expensive because it is used on chips and contacts, etc. Speculative assets are not currency or good store of value, and is not what P2P Electronic Cash is defined as. I certainly hope people are willing to spend Bitcoin, zero use of Bitcoin also means zero value. The value of Bitcoin is its potential to one day replace fiat, which is why companies are investing and building tech ontop of it.


Which is the same. If you were to compare it by the usage of purchasing power parity, you would arrive at the same conclusion. The amount of Bitcoin that you have in the future is less than what you have now. Your purchasing power in terms of Bitcoin has decreased, which has the same effect as an inflation.

That is a very bold claim. It is more than likely that there are "lost" coins, I guarantee that. People are likely to misplace their backups, destroy their PC by accident, intentionally burn those, etc. That is where tail emission can be useful, and how Ethereum manages their supply, albeit in a different manner. Burned coins are arguably lost, coins sent to OP_Return are permanently lost. Regardless, it is irrefutable that coins are being lost.

Exactly, they are the same. I would argue that a tail emission scheme would work better than a flat tax on all the UTXOs available at a certain snapshot.

Here's a post on tail emissions: https://petertodd.org/2022/surprisingly-tail-emission-is-not-inflationary.

We don't know much gold is left to be mined even on the very planet we live on, let alone other planets, limited and capped are two different things, precious metals are limited by what can be found, and cash is also limited by how much ink and papers we can produce, everything we know of is limited, nothing is created completely out of thin air, so those metals being limited don't make them equal to Bitcoin in that regards, BTC inherently is not limited by physics or code either, it's limited, finite and caped by consensus.


Only about 10% of Gold is used in industry, the rest is all just stored for its scarcity, in fact, long before people discovered how to use gold in any industry, they used it as a  medium of exchange, for daily payments, that evolved to being store of value against government currencies, if we discover something else to use instead of gold in all industries it's being used in, it wouldn't have any major impact on the value of Gold.

Yes, finding a use for something that is already a good store of value is going to increase it's value, but that doesn't mean it has to have a use to actually have value.


Which is the same. If you were to compare it by the usage of purchasing power parity, you would arrive at the same conclusion. The amount of Bitcoin that you have in the future is less than what you have now. Your purchasing power in terms of Bitcoin has decreased, which has the same effect as an inflation.


Nobody can prove that there are any lost coins, can you? if you can't prove it, you can't count it, burned coins are not lost coins, and burned coins won't be subject to fees because they are not there so not sure why you brought that up as an argument, and again, no matter how many "lost" coins are there, introducing new supply will result in more coins in circulation, even if we were to believe that there are 2M "lost" coins, and the actual supply is only 19M and not 21M, it's only a matter of time before we re-generate those 2M coins and above.



That article is B.S to be honest, it's based on a lot of assumption that you can't control or predict accurately.


Oh really, how? it's fine if you want to argue for the sake of conversation that many people lose their coins, but since you can't know how many coins are or will be lost, you can't even prove they are lost, then the whole argument is flawed.

We did go off-topic a little, but speaking of "lost coins" which OP wants to re-use, I want someone to prove that there is indeed something called lost coins, they don't have to be someone else's coins, they could be your coins, what would be solid evidence that you indeed lost said coins? it's possible to prove that you have something, but it's impossible to prove that you don't.

All coins that are technically spendable are existing coins and are NOT lost, I can't take seriously someone telling a story of how his grandmother threw away his laptop that had 100k BTC, or that Satoshi is dead and can longer access his coins, I could make the same claim that I lost access to my coins, I just can't prove it.

Its Google new politics about Gmail accounts entering in the head of some of our guys? WTF man, stop that of stole money from dormant wallets, we CANT know who its really dormant or not.

Entering to move something from time to time make you a lot more insecure against all. The risk increase a lot for only have to made a transaction to confirm you are still on charge on that wallet. No way.

I was reading the thread and i saw someguy said something like in 100 years that BTC from dormant are gonna be released bla bla.....

Man in 100 years or much less BTC its gonna be dead or upgraded or whatever, the velocity of development in the world its huge, think in this way, we are not so far from when the gold patron was taken down, and the time between changes only shorten.....

Unrelated note, but Google's policy is not new at all, because they've been deleting dormant Gmail accounts for ages.

But this idea is a whole new level of silly, because Bitcoin is not an account which you can lose access to and recover, it is currency, and the consequences of "reintroducing into circulation" currency that may not be even lost can harm Bitcoin's financial stability.

Equally important to bitcoin is "be your own bank" and that you have completely sovereignty over your own wealth. This ceases to the case if a small group of developers decide to start siphoning off some of your coins against your will.

Why is that very likely? The majority of blocks which are currently being mined already take part in merged mining via the likes of RSK.

The outcome is identical - I can now purchase fewer good or services with my holdings. It doesn't matter if you take away 1% of my holdings as tax, or you devalue my holdings by 1% by printing more. Either way, the amount of goods and services I can purchase with my holdings has been decreased by 1%. Under both systems, the longer I hold my coins, the poorer I become.

Which one is more important remains the question, which feature is more valuable is also a matter of question, is it the 21M cap, or the free storage of coins, hard to tell which one to sacrifice when the time comes.

The same argument could be made when developers start injecting more coins that what you thought possible, we can reuse every argument against the two different methods, they both are "bad results" we just have to debate which is worse.    



Work as in (work to solve the problem of mining incentives) i am aware of merged mining, got a dozen of those useless coins, all fees extracted by all the different merged coins throughout history are not close enough to being worth half the block reward, they are essentially useless to bitcoin, and I don't see how that would change.

One issue with this:
3 BTC at $60k will guarantee you the safety we have now.
0.3 BTC at $600k will guarantee the same safety.

The problem is that you're guarding in both cases with the same hashrate or miner cost to be more precise an ecosystem worth 500 billion and one worth 10 trillion. So if 3 billion might sound like a lot to attack a coin with a market cap of 500 billion it doesn't sound that excessive when taking down one that rivals the GDP of the USA.


We had a glimpse of that a few weeks ago when the fee paid nearly exceeded the reward for a few blocks!
Was that sustainable the long run, obviously not!

Now there comes the problem with the rising BTC price and the fees that have to prop them up, for sure people like to talk about prices in BTC, that the fee is not in cents but in sat/b but in reality, nobody gives a damn how many satoshi that is but how much $ you have to pay.
With fixed blocksize the math is pretty simple:


So 450k tx that need to cough up 28 million, that's 62$ per tx on average!

But what if the BTC price doubles every 4 years to compensate?
As I said above, you're just having the same number of security guards while doubling the area they need to patrol and twice the merchadise!

Several Swiss banks tried just such a scam with "unclaimed" Jewish assets from the time of the Holocaust. Didn't end well for them.

What kind of attack can one perform to own 10 trillion worth of BTC? The only feasible attack would be double-spend, to perform a 3 billion $ attack you would really want to reverse a transaction/ series of transactions that is worth much more, a double spend attack is not feasible now or with a market cap of 10 trillion as long as:

1- The attack is very expensive.
2- The profit of playing fair is high.


A government carrying out different attacks just to damage bitcoin is something different, you could argue that if needs be, it won't matter much how much hashrate is securing the network, if they label mining bitcoin as a crime worldwide, 90% of miners will shutdown and then it will cost them little to nothing to attack it.

They're equally important. Arbitrarily altering the inflation schedule, and collecting a "storage tax" from every Bitcoin address will have the same effect. De-valuating the currency. Collecting "storage tax" only from "lost coins" doesn't hold water, because besides being incapable of distinguishing lost coins, they are pretty much finite, and once collected, you'll quickly run out of incentives.

What one government does, isn't necessarily in favor of the rest of the governments. Quite the opposite. Whenever some government tries to ban bitcoin mining, there appear mining paradises somewhere else.