To buwaytress, when someone unlocks the real private key with the private key stored in their new wallet(aka transfer coins to traditional bitcoin wallets) that coin effectively becomes a wallet and would be removed from the new wallet, thus preventing people from trading coins(wallets) they actually have the private keys to. The system would make things simple so that people wouldn't even see the keys to the keys of their coins. It would only tell them how much they have because simplicity is what the world needs to adopt something as abstract as bitcoin. There would be an option to transfer coins to wallets but is irreversible unless they sent the bitcoin back into a coin which would be a process people can also do on their own.
Yes it would require transactions into the coins firsthand but I see multiple benefits to this solution. I would argue that a bitcoin that could be securely traded off of the blockchain nearly instantly for free would be worth much more than a traditional bitcoin that costs money and requires the internet and time to transfer. Almost to the point where it would be worth the price to make these coins. This would also leave the blockchain as its own entity which lets the exchanges, miners, and holders continue to do what they do which I see as a huge benefit to the ecosystem.
And yes wallet addresses prove identity but nothing is stopping anyone from making as many wallets as they want so can that be considered a valid measure of identity? whereas a new type of wallet added on top of the old wallet could use multiple wallets to add value to the entire system.
What is the number? Something like 30-40% of bitcoins are effectively lost? When that number grows it could spread to everyone losing their bitcoin, and then what? Those bitcoins are just sitting there. I'd propose you create the system as I've written, spread the news on major news sites that you have to put your regular wallet ID on the bitcoin website. After some 2-5 years take all non marked bitcoin wallets and throw it in the fund to create the liquid system to give people an option to traditionally barter with bitcoin. All the lost bitcoin would effectively return to the miners and flood back into the system. This is needed because at most there can only be 21 million bitcoin. 210 trillion satoshi. That amount pales in comparison to the worlds actual money in circulation. If bitcoin was serious about being a real currency something must be done to hold onto as much as possible because regular systems can just print more, bitcoin can't without changing the whole system. And while it can be seen as a positive aspect of the currency, it could ultimately lead to bitcoin's downfall.
And who would own the new coins that are created to start the system? Well, nobody. The coins made(less than what would have to be given to the miners to make the coins) could be used to create a Change system. Let's say someone has .23BTC in the form of .2BTC and .03BTC. The transaction will cost them .18BTC. They can't make the exact transaction. But if their current keys could be changed so they hold .18 and .05, they could make the transaction. This would require atleast 1 party to be connected to the internet but it is possible as the change system could exchange wallets for wallets of the same value as the keys would just change but the user would have no knowledge of this as they don't care what's really going on. As long as it's accurate and secure. To make this process easier coins would have to be divided into actual segments and not just crazy .1263957294. And you could argue that that would ruin buying things with an exact whatever currency to bitcoin price but the system should be designed for purchases in bitcoin, not in what came before it. this plan would take years to make, and then years to implement but I think it could be worth it
Thanks for the feedback!! There is a lot of little details that I haven't explained. It will probably take awhile to get it all out here. more thoughts!!