Quote from: HandcraftedBreads on March 04, 2023, 05:19:01 PM

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)

That's right, some BTC are already lost forever, some BTC are going to be lost in some time. This will lead to deflation. However, the other thing that affects the possibility of deflation is adoption level. If the adoption level is high, and BTC is used everywhere, then continuous money loss will bring true deflation. And if adoption level is not so high, then the overall amount of coins probably won't affect the value of BTC.