One thing always came on my mind when I entered the world of Bitcoin.
Fiat are issued with registered numbers and recycles in the name of new currency, making the old obsolete.
i.e. They never get destroyed even if the physical notes gets burned and decayed.
But bitcoin are totally different, they can be lost
- sending to unsupported address
- loosing private keys
- people dying with private keys, etc.
Which will keep on decreasing the total available supply of the coin. making it more scarce.
Won't that bring a problem the the economics, no coins left to trade situations?
Sending btc to unsupported or invalid address due to typo is very unlikely because your wallet will detect an error so there will be no transaction created. And nowadays people are very careful not to lose their private keys. If you have thousands of dollars worth of btc in your wallets I don't think you're not gonna make multiple backups for your keys. You're stupid if you didn't.
"People dying with private keys." This statement is quite confusing but I assume you're saying that people who have btc wallets, with btc in it, unfortunately dies and no one even in his family knows his private keys. I think this situation is possible to happen but I don't think it's big of an issue. And that in my opinion it won't be a problem.
No it will never happened reality even not in the dreams because millions of people are investing in bitcoins and they are 110% sure that the will have profit and the prices are not getting down they are always going up so there is no possibility of loss.