There will be a fixed number if Bitcoins, and people, because of human error, will accidentally lose Bitcoins every now and then.
This must mean that Bitcoin will eventually seize to exist? Or at least shrink to minimal amounts, when it shrinks to a certain level, it will no longer be useful.
Is this correct?
Even if some people lose bitcoin that doesn't mean that it would disappear. Even if, it disappears in 20 or 30 years time it would leave a lot of people bitcoin millionaire, so the potential is huge.
I guess you don't get the point, when people totally forget how to access their bitcoin, that is considered loss in circulation, and that is a big mistake for them especially if bitcoin will moon in the future. However, good for the market since the supply will reduce with that kind of mistake.