Firstly, this is not a suggestion to change the 21Million limit, the generation reward rate/fees or to 'invalidate' old coins that haven't moved in years!
Perhaps this idea sort of belongs in 'Development and Technical Discussion' - but It's light on tech stuff and is also somewhat economics/political/general discussion related.
Mods - file it where ye will.
In various discussions people express concern at large losses of BTC from the system, as well as the difficulty of determining whether in fact the BTC are truly lost and might actually reappear suddenly - thus providing a sudden money-supply shock.
It seems there's a certain asymmetry in concern, in that people aren't quite so worried if their bitcoins suddenly become more valuable due to reduced supply, but are quite fearful of the idea that old huge wallets could suddenly come online, devaluing holdings and discouraging further investment flow into bitcoin.
I'm dead set against 'invalidating' coins that haven't moved in years - as in future
a) we don't know what the average lifespan of a human may be
b) People sometimes get locked up for decades for political reasons - this shouldn't result in automatic loss of their bitcoin assets.
My proposal is that the system simply place a rate limit on how quickly old unmoved coins can be spent. This would be proportional to whatever is the recent value of transactions occurring per block. (or proportional to the total reward/fees per block)
The idea is not to cause any particular slow down for spending some small stash that comes online after 50+yrs because some grandson finally worked out a byzantine puzzle in a will.. but if the stash is both old and *large relative to the current size of the bitcoin economy*, then it will only be valid for the miners to include spends from this stash at some sensible rate relative to recent transaction history.
I'm assuming here that it's not technically too difficult to track the larger chunk of change while allowing only small chunks to be spent off it.
This wouldn't perhaps be easy to do if the old 'lost' wallet was made up of a vast number of tiny amounts rather than one consolidated amount - but hopefully even then it may be possible to automatically apply some rate limiting.
Combined with tools that watch for activity on long-inactive coins - this would mean that even if some previously-assumed-lost multi-million BTC address suddenly showed as an input to a transaction - there need be no fear that the whole amount would be entering the economy in one hit.
For the purposes of estimating the total money supply at any particular time - a lot of old unmoved amounts could be in many cases chopped out of consideration because they would be known to only be capable of coming into the economy at a certain maximum rate.
I'd be interested in people's thoughts on the feasibility and desirability of this.
(and I'm hoping that this will also help kill the oft resurfacing idea of 'invalidating' old unmoved coins)
Apologies if this particular idea has been suggested - please point me to discussion if you know of it.