100 is neglijable. Also 1000. Not all the people in the world would use BTC, as not all would use gold.
Also, the lost BTC will be felt, as in not being traded, not having any value
Also, the lost BTC will be felt, as in not being traded, not having any value
That isn't what this is about, it is the uncertainly of supposedly lost coins which is the issue. Remember the 78% of all coins ever never moved paper?
Now we could say that some fraction of these coins are most likely lost, but how large is it?
We have no way of knowing. Infinitely deflating currency can only work for either:
a limited time period and/or a limited economy
or if there is a mechanism of ensuring that some previously assumed "lost" substantial value doesn't suddenly resurface.
There may be some mechanism which could be implemented like a maximum transaction amount but I doubt this would be very well received by most.
Yes!
I was saying this yesterday. Eventually too many coins will be "lost" but we will never know exactly how many. The risk will become greater and greater as there is a chance that those coins could become "unlost" and crash the bitcoin economy.
Perhaps a solution is to require that coins move wallets every set amount of time, to prove that someone still has the private key to the wallet that holds them. If they aren't moved in some amount of time (like five years or something) they get deactivated by the system. Anyone wishing to save bitcoins could simply pass them back and forth between two wallets they own every once in a while. Or maybe sign a document with the wallet keys that hold the coins. It's too late to add this feature to bitcoin but maybe some future crypto currency will have it.
This would be unpopular - especially for those who hold physical coins such as Casascius or Bitbills.
It would be much less drastic to adjust the fee mechanism to take into account coin age - and restrict the rate at which old lost coins come back into circulation by making it most cost effective to trickle them in.
It wouldn't stop someone who had a vast fortune spread across many separate private keys, flooding them back in - but it may stop sudden liquidity shocks, whilst not actually 'taking' money from people who have old coins but are patient.
This would probably be tricky to implement - and if not easily understood - may also be unpopular. You're right that this sort of thing would probably first appear on some other blockchain, and I suspect only if it's demonstrated to be a problem for the Bitcoin economy.
I do agree there is a large amount of chaos that one can only wish to unravel. But I think most large complex systems are this way.