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 well-known 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 available, rather a decreasing one, which is why we call bitcoin deflationary.
What would happen if we would make so that coins with 131 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)
But how would you know if the coins are lost or not. Even if you consider 131 years of inactivity it's still not 100% provable that the coins are lost.
Suppose that I have hold on to my coins for 50 years and then I put it in my will as inheritance and it keeps going on like that without anyone utilizing those coins.
How would we know that its lost.
Also, suppose that I lost my keys to my coins but I have it written somewhere in a metal plate but couldn't find it now.
Somehow magically 150 years later one of my family members find it then he should be able to access those coins.
But they would have been gone because of your 131 years inactivity.
Bitcoin is perfect in the way it is currently. Any modification will disrupt its true value.