If the amount of the Bitcoin that people holds begins to be lost because they have no control over it in the Blockchain forever, due to the lose of their private keys, the effect will be deflation. Although the amount of Bitcoin lost through this means might be insignificant compared to the amount that is in circulation now, but if the loses keeps occuring in the future, it will certainly lead to deflation
Here is the quote from the man himself:
Lost coins only make everyone else's coins worth slightly more. Think of it as a donation to everyone.
I wonder though, is there a point where the difficulty of generating a new coinbase is so high that it would make more sense to try to recover keys for lost coins or steal other people's coins instead? The difficulty of that is really high so for now it makes a lot more sense to generate but I just wonder what the real figures are.. would that ever become more productive? Maybe Satoshi can address this..
Computers have to get about 2^200 times faster before that starts to be a problem. Someone with lots of compute power could make more money by generating than by trying to steal.
The effect of deflation is abnormal increase in price which can cause Bitcoin to be overpriced in the future. My question is what do you think will be the adoption and usage rate of Bitcoin then, whether it will increase or decrease?
It's not abnormal, it is how Satoshi design it. It will not have any effect on the adoption and usage it. And that's what really separate Bitcoin is, only 21 million supply and so you really have to hold and it will really become scarce in the future.