Wouldn't it be better if lost coins were reintroduced into the network after a fixed span of inactivity?
I suppose the first thing one would say no for, would be by virtue of bitcoin's acclaimed deflationary property. This said, I believe it is much more important, especially in the longest term, that bitcoin keeps its property of conservation of energy, that is, having a fixed quantity of money ever available. By losing coins, instead, and by having them unrecoverable, we have not a fixed quantity of money, rather a decreasing one, which is why we call bitcoin deflationary.
What would happen if we would make so that coins with 109 years of inactivity would be reintroduced into the network?
I see this having some positive effects:
- decreased impact of hereditary monopoly
- incentive to let the currency flow
- canceled the future necessity to increase the number of decimals for 1 BTC (very-long term perspective: too many coins have been lost, thus the necessity to further subdivide a coin)
What if you clean up the basement of your great grandpa and you find a big fat chest full to the brim with gold and you sell it for say 100 million and you are obliged to register that sale with financial authorities and then, yes then, they tell you that the gold was acquired by your great grandpa 110 years ago and there is a law stating that when something is lying around dormant for >109 years, it automatically belongs to the public and must be returned to public treasury, what then? Honest question, what would you think?