What is causing it to rise so quickly
That's like listening to MSNBC where they say the stock market rose because Netflix did blah, or Apple blah blah, when really it might have been because of a completely different reason -- more cash floating around chasing the same number of stocks. Ask ten people and you'll learn of ten different reasons why Bitcoin is today valued the way it is. None have the exact answer but everyone is right.
and can we expect either a crash, flat line or keep increasing?
Anyone who says they can predict the future is lying. There are patterns that have happened historically. Sometimes history repeats itself. There aren't many times in history a decentralized digital currency has gone from being an experiment to becoming functional as a substitute for fiat currency. In fact, that's never happened before. Therefore, nobody knows if all bitcoins combined should today be valued $20 million USD, $350 million USD or $18 billion USD. The market says about $350 million USD based on what information is known today.
Also, what happens to coins that are lost or just frozen?
Lost coins are lost. To spend bitcoin funds the private key for the Bitcoin address with the funds is needed. Without that private key those funds can no longer be moved.
Someone loses a wallet. Loses their key. Someone dies. These coins aren't circulated back into the system, right?
Right.
How does the system get more coins introduced
It doesn't. Well, it does, thanks to the block reward subsidy which currently is inflating the bitcoin currency supply at the rate of 12.5% per year, but that will slow gradually, day by day (as a percent of all currency that exists), until all 21 million bitcoiins have been issued and then there are no more issued at all.
who controls that?
The market does. The value of the remaining coins would likely increase somewhat proportionately as a result. Lose a hundred dollars worth of bitcoins? You'll probably start working on buying $100 worth to replace it as a result. That's the mechanism that corrects for lost coins.
Then allow me to cut in front of you to ask and what is likely your next question.
But won't the increasing exchange rate as the result of lost coins cause people to hoard? And the currency will fail then, because nobody is spending their coins?
The answer is ... no.
Bitcoin is both a currency (used as a store of value) but it is also payment system. It is an efficient payment system which has properties that will cause it to be preferred over other payment systems. One of these is non-reversible transactions (no chargebacks). Another property is low fees (about a penny's worth to send thousands of dollars worth, in many instances). Another property is that it is universal and it knows no borders. And that it can be used anonymosly.
Because of these advantages people will prefer to send bitcoins or receive bitcoins (or both) over other payment methods. So there will always be value to bitcoins because you cannot use the bitcoin payment network without first having bitcoins in your wallet.
Is hoarding good for Bitcoin? Hoarding is fine. It is when those hoarding stop hoarding that a problem presents itself. That causes volatility.
