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Sun, 20 Jul 2025 16:14:37 -0700 (PDT) X-Received: by 2002:a05:6808:16a0:b0:403:50e7:83db with SMTP id 5614622812f47-41cefe0a659mr11792856b6e.25.1753053277167; Sun, 20 Jul 2025 16:14:37 -0700 (PDT) Received: by 2002:a05:690c:9989:b0:711:63b1:720 with SMTP id 00721157ae682-7194e2f0e64ms7b3; Sun, 20 Jul 2025 16:13:04 -0700 (PDT) X-Received: by 2002:a05:690c:ed2:b0:718:481a:4872 with SMTP id 00721157ae682-718481a48d8mr181066627b3.42.1753053183707; Sun, 20 Jul 2025 16:13:03 -0700 (PDT) Date: Sun, 20 Jul 2025 16:13:03 -0700 (PDT) From: Javier Mateos To: Bitcoin Development Mailing List Message-Id: <0ea9abf6-abe7-4287-aa6a-90d204147bedn@googlegroups.com> In-Reply-To: References: <634ea7a6-1695-46e8-a337-1fef1ac17a66@murch.one> Subject: Re: [bitcoindev] [BIP Proposal] Proof-of-Activity Reclamation (PoAR) MIME-Version: 1.0 Content-Type: multipart/mixed; boundary="----=_Part_455806_1056542070.1753053183384" X-Original-Sender: javierpmateos@gmail.com Precedence: list Mailing-list: list bitcoindev@googlegroups.com; contact bitcoindev+owners@googlegroups.com List-ID: X-Google-Group-Id: 786775582512 List-Post: , List-Help: , List-Archive: , List-Unsubscribe: , X-Spam-Score: -0.5 (/) ------=_Part_455806_1056542070.1753053183384 Content-Type: multipart/alternative; boundary="----=_Part_455807_1959550345.1753053183384" ------=_Part_455807_1959550345.1753053183384 Content-Type: text/plain; charset="UTF-8" Content-Transfer-Encoding: quoted-printable Hi Donald and everyone! First of all, I want to thank you for the effort and work put into this=20 proposal, wich addressses a complex and important topic. Howewer, to my=20 understanding, the proposal clearly lacks solid foundations, and although= =20 it tries to anticipate some objections, the responses offered are either=20 insufficient or even counterproductive. 1) The issue of miner incentives is overstated The last bitcoin won=E2=80=99t be mined until the year 2140, which means we= =E2=80=99re=20 still more than 100 years away. Justifying such a structural change today= =20 based on a concern that lies completely outside our current technical,=20 social, and economic horizon is an exaggeration. As rewards decrease,=20 Bitcoin has already shown a natural tendency to substitute them with=20 transaction fees, without this causing any systemic collapse. 2) Artificial scarcity is not a problem (it=E2=80=99s part of the design) Bitcoin is divisible into 100 million satoshis per unit, which provides=20 more than enough granularity to operate even if BTC reaches astronomical=20 values. If 1 BTC were worth more than 1 million u$s, each satoshi would be= =20 worth over a cent. If necessary, an extension of decimals could be=20 considered in the future (as is already done in Lightning with=20 millisatoshis), without altering the fundamental rules. The idea that =E2=80=9Clost value must be recovered=E2=80=9D to maintain li= quidity=20 completely ignores the fact that in a deflationary economy, the loss of=20 units doesn=E2=80=99t necessarily reduce system functionality=E2=80=94it in= creases the=20 value of the remaining units. In the words of Satoshi Nakamoto himself: =E2=80=9CLost coins only make everyone else=E2=80=99s coins worth slightly = more. Think of=20 it as a donation to everyone.=E2=80=9D (I clarify that i do not necessarily= =20 intended to be canonical) 3) The confiscation risk doesn't disappear just because it's framed as=20 "reauthentication." The argument that =E2=80=9Cif you can=E2=80=99t move your coins for 20 year= s, it=E2=80=99s=20 indistinguishable from abandonment=E2=80=9D is not only weak, but profoundl= y=20 dangerous. What happens if coins are immobilized as part of an inheritance,= =20 a trust, or simply due to personal choice? Peter Todd summed it up perfectly: =E2=80=9CIf you want to argue for actually redistributing coins rather than= just=20 creating new ones out of thin air - for whatever reason - you need to=20 justify why you want to risk confiscating coins that were not in fact lost.= =E2=80=9D The fact that the current system can=E2=80=99t distinguish between lost and= =20 non-lost coins doesn=E2=80=99t justify defaulting to confiscation. In fact,= that=20 limitation is deliberate: Bitcoin is based on the presumption of individual= =20 sovereignty, not on a registry of =E2=80=9Clegitimate activity.=E2=80=9D Wh= y should I be=20 required to spend or move my BTC if I don=E2=80=99t want to? The very idea = of=20 Bitcoin is that *I have full freedom to decide what to do with my funds. * 4) Bitcoin does not need to "reactivate" value to sustain its economy. The assumption that a prolonged decrease in supply would destabilize the=20 system has not been empirically demonstrated. Growing demand, combined with= =20 coin loss, creates deflationary pressure, yes=E2=80=94but that doesn=E2=80= =99t prevent=20 circulation or absolutely disincentivize spending. Bitcoin=E2=80=99s econom= y has=20 already adapted to this over time without artificial intervention. Sincerely, Javier Mateos El mi=C3=A9rcoles, 16 de julio de 2025 a las 18:05:40 UTC-3, Peter Todd esc= ribi=C3=B3: > On Tue, Jul 15, 2025 at 03:02:04PM -0700, Murch wrote: > > Hi Donald and all, > >=20 > > The idea of recycling dormant coins is one that has made the rounds=20 > several > > times before, including in the form of the "Bitcoin Dormant Recovery > > Proposal" just a couple months ago: > > https://github.com/bitcoin/bips/pull/1852 > >=20 > > I don=E2=80=99t have the impression that the idea has been particularly= popular,=20 > and > > as BIPs go, this one is missing crucial parts, e.g.: > >=20 > > =E2=80=A2 A more comprehensive motivation based on thorough analysis ho= w > > redistributing dormant coins improves the system as this constitutes a > > departure of the status quo for the supply schedule > > Worth noting that from an economic point of view redistributing genuinely= =20 > lost > coins, and creating coins out of thin air, is essentially the same thing: > either way you are introducing coins into the active economy that were > previously not in economic circulation. In both cases you are diluting th= e > value of non-lost coins by increasing the total active supply, decreasing= =20 > their > purchasing power proportionally. > > If you want to argue for actually redistributing coins rather than just > creating new ones out of thin air - for whatever reason - you need to=20 > justify > why you want to risk confiscating coins that were not in fact lost. > > --=20 > https://petertodd.org 'peter'[:-1]@petertodd.org > --=20 You received this message because you are subscribed to the Google Groups "= Bitcoin Development Mailing List" group. To unsubscribe from this group and stop receiving emails from it, send an e= mail to bitcoindev+unsubscribe@googlegroups.com. To view this discussion visit https://groups.google.com/d/msgid/bitcoindev/= 0ea9abf6-abe7-4287-aa6a-90d204147bedn%40googlegroups.com. ------=_Part_455807_1959550345.1753053183384 Content-Type: text/html; charset="UTF-8" Content-Transfer-Encoding: quoted-printable

Hi Donald and everyone!
First of all, I want to thank you for the e= ffort and work put into this proposal, wich addressses a complex and import= ant topic. Howewer, to my understanding, the proposal clearly lacks solid f= oundations, and although it tries to anticipate some objections, the respon= ses offered are either insufficient or even counterproductive.

1) The issue of miner incentives is overstated
The last bitcoin won=E2=80=99t be mined until the year 2140, which means we= =E2=80=99re still more than 100 years away. Justifying such a structural ch= ange today based on a concern that lies completely outside our current tech= nical, social, and economic horizon is an exaggeration. As rewards decrease= , Bitcoin has already shown a natural tendency to substitute them with tran= saction fees, without this causing any systemic collapse.

2) Artificial scarcity is not a problem (it=E2=80=99s part of the design= )
Bitcoin is divisible into 100 million satoshis per unit, which provides mor= e than enough granularity to operate even if BTC reaches astronomical value= s. If 1 BTC were worth more than 1 million u$s, each satoshi would be worth= over a cent. If necessary, an extension of decimals could be considered in= the future (as is already done in Lightning with millisatoshis), without a= ltering the fundamental rules.

The idea that =E2=80=9Clost value must be recovered=E2=80=9D to maintain= liquidity completely ignores the fact that in a deflationary economy, the = loss of units doesn=E2=80=99t necessarily reduce system functionality=E2=80= =94it increases the value of the remaining units. In the words of Satoshi N= akamoto himself:
=E2=80=9CLost coins only make everyone else=E2=80=99s coins worth slightly = more. Think of it as a donation to everyone.=E2=80=9D (I clarify that i do = not necessarily intended to be canonical)

3) The confiscation risk doesn't disappear just because it's framed as "= reauthentication."
The argument that =E2=80=9Cif you can=E2=80=99t move your coins for 20 year= s, it=E2=80=99s indistinguishable from abandonment=E2=80=9D is not only wea= k, but profoundly dangerous. What happens if coins are immobilized as part = of an inheritance, a trust, or simply due to personal choice?

Peter Todd summed it up perfectly:
=E2=80=9CIf you want to argue for actually redistributing coins rather than= just creating new ones out of thin air - for whatever reason - you need to= justify why you want to risk confiscating coins that were not in fact lost= .=E2=80=9D

The fact that the current system can=E2=80=99t distinguish between lost = and non-lost coins doesn=E2=80=99t justify defaulting to confiscation. In f= act, that limitation is deliberate: Bitcoin is based on the presumption of = individual sovereignty, not on a registry of =E2=80=9Clegitimate activity.= =E2=80=9D Why should I be required to spend or move my BTC if I don=E2=80= =99t want to? The very idea of Bitcoin is that I have full freedom = to decide what to do with my funds.=C2=A0

4) Bitcoin does no= t need to "reactivate" value to sustain its economy.
The assumption that a prolonged decrease in supply would destabilize the sy= stem has not been empirically demonstrated. Growing demand, combined with c= oin loss, creates deflationary pressure, yes=E2=80=94but that doesn=E2=80= =99t prevent circulation or absolutely disincentivize spending. Bitcoin=E2= =80=99s economy has already adapted to this over time without artificial in= tervention.


Sincerely,
Javier Mateos


=
El mi=C3=A9rcoles, 16 de julio de 20= 25 a las 18:05:40 UTC-3, Peter Todd escribi=C3=B3:
On Tue, Jul 15, 2025 at 03:02:04PM -0= 700, Murch wrote:
> Hi Donald and all,
>=20
> The idea of recycling dormant coins is one that has made the round= s several
> times before, including in the form of the "Bitcoin Dormant R= ecovery
> Proposal" just a couple months ago:
> https:/= /github.com/bitcoin/bips/pull/1852
>=20
> I don=E2=80=99t have the impression that the idea has been particu= larly popular, and
> as BIPs go, this one is missing crucial parts, e.g.:
>=20
> =E2=80=A2 A more comprehensive motivation based on thorough analys= is how
> redistributing dormant coins improves the system as this constitut= es a
> departure of the status quo for the supply schedule

Worth noting that from an economic point of view redistributing genuine= ly lost
coins, and creating coins out of thin air, is essentially the same thin= g:
either way you are introducing coins into the active economy that were
previously not in economic circulation. In both cases you are diluting = the
value of non-lost coins by increasing the total active supply, decreasi= ng their
purchasing power proportionally.

If you want to argue for actually redistributing coins rather than just
creating new ones out of thin air - for whatever reason - you need to j= ustify
why you want to risk confiscating coins that were not in fact lost.

--=20
https://petertodd.org 'peter'[:-1]@petertodd.org

--
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