How can this be true if people send crypto to bad addresses all the time and they just get lost?

It was just a concept idea to implement for longevity and healthy chain growth in the long term anyway. I don't think you're right about coins being lost or getting sent to bad addresses you might wanna double check that.

Then take the same concept for the unconfirmed transactions after x amount of time instead & apply it.

Just out of curiosity where do coins go then from sending to a none existing address? Do they just stay in an unconfirmed state? If so why can't the same method be applied?

100% programmable.

I've rattled this idea for a while now & can't see why it wouldn't be useful.

The long term goal is to keep miners on board & keep the chain alive while it gets more scarce over time. Well, what if you developed a new protocol to check for lost coins that never arrived. I'm not done yet what if you could take those undelivered coins & transactions sitting in the mem pool every 5 years or so. Then recycle them back into the block reward again?...

I don't see a problem with this as it creates an incentive for miners in the long run. Keeps your total number in circulation refreshed and the mem pool clean. Making everyone happy and the chain healthy. This would also slow the process of things becoming more scarce faster. You could argue n say it slows the inflation price at the same time but it still keeps the same circulating amount in supply from refreshing every so X amount of time. Every 5 years or so seems like a good time to refresh. Over 20 years when difficulties are up you can refresh & keep block rewards up.

Think of it like a predicted Black Friday. Where things ramp up over difficulty then take a small dip as recycled coins get redistributed. I would choose this option over miners not mining the network altogether and the chain dying. As this is something we've learned from Historic Genesis Chains, Miners need an incentive for longevity. Over time the price will still increase as the difficulty gets harder.

Off the top of my head, you could make some kinda accumulation collector for the mem pool for undelivered coins. Make it an automatic protocol to repeat every so x amount of time = to projected difficulty increase. I honestly don't see a problem for this kinda idea or standard to be added to create a longevity for chains.

The same method can be applied for unconfirmed transactions.

I call it: Recycling or Purging

Thanks for reading

Cool a couple of the links are not working in the OP though needs updating.