[bitcoindev] [BIP Proposal] Proof-of-Activity Reclamation (PoAR)

[bitcoindev] [BIP Proposal] Proof-of-Activity Reclamation (PoAR)

['Donald Dienst' via Bitcoin Development Mailing List]

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Dear Bitcoin developers,

I would like to propose a new BIP titled "Proof-of-Activity Reclamation 
(PoAR)," which aims to address the long-term economic effects of lost and 
abandoned UTXOs.

This proposal introduces a fully automated and rule-based mechanism to 
gradually recycle coins that have been provably inactive for over 20 years. 
These coins are returned to the undistributed pool and slowly reintroduced 
via future block rewards—extending miner incentives while respecting the 21 
million BTC cap.

You can view the full proposal here:
https://gist.github.com/Brandchatz/56c39d289db9e56190c13922850815b8

I welcome your thoughts, suggestions, and critiques.

Best regards,  
Donald Dienst  
dddienst@protonmail.com

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Re: [bitcoindev] [BIP Proposal] Proof-of-Activity Reclamation (PoAR)

[Christian Riley]

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Re: [bitcoindev] [BIP Proposal] Proof-of-Activity Reclamation (PoAR)

[Lucas Barbosa]

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This type of proposal, is fundamentally incompatible with Bitcoin's ethos
for several reasons.

1. Sovereignty and Immutability of Property
In Bitcoin, ownership of a coin is guaranteed exclusively by possession of
the corresponding private key. The idea that funds can be "reclaimed" or
"recycled" after a period of inactivity amounts to automated confiscation,
albeit disguised as economic efficiency. This undermines trust in the
inviolability of property—something sacred to long-term users.

2. The 21 Million Rule is Inviolable, but the Supply is also Deterministic
Although the proposal claims to respect the 21 million cap, it alters the
nature of supply distribution. The fact that UTXOs are lost is part of the
economic reality of BTC—the actual circulating supply is lower than the
theoretical one, and this is priced in. Attempting to "correct" this is a
form of monetary intervention without legitimate authority in the system.

3. Perverse Precedent and Attack on Finality
Allowing a UTXO to be reused after N years sets a very dangerous precedent:
ownership of BTC is no longer absolute and becomes conditional on activity.
This directly attacks the finality of transactions and the ledger—one of
the pillars of the system.

4. Negative Impact on Long-Term Trust
People who store BTC for the future—whether for decades, for reasons of
inheritance, security, or trust in the network—would lose the guarantee
that their BTC will remain untouched. This reduces Bitcoin's perceived
value as a solid and reliable store of value.

5. This Has Already Been Considered and Rejected
Similar proposals (such as coin expiry or reclaimable outputs) have been
discussed in the past, and the Bitcoin community has consistently rejected
them based on the above principles.

Em ter., 15 de jul. de 2025, 15:26, 'Donald Dienst' via Bitcoin Development
Mailing List <bitcoindev@googlegroups.com> escreveu:

> Dear Bitcoin developers,
>
> I would like to propose a new BIP titled "Proof-of-Activity Reclamation
> (PoAR)," which aims to address the long-term economic effects of lost and
> abandoned UTXOs.
>
> This proposal introduces a fully automated and rule-based mechanism to
> gradually recycle coins that have been provably inactive for over 20 years.
> These coins are returned to the undistributed pool and slowly reintroduced
> via future block rewards—extending miner incentives while respecting the 21
> million BTC cap.
>
> You can view the full proposal here:
> https://gist.github.com/Brandchatz/56c39d289db9e56190c13922850815b8
>
> I welcome your thoughts, suggestions, and critiques.
>
> Best regards,
> Donald Dienst
> dddienst@protonmail.com
>
> --
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> <https://groups.google.com/d/msgid/bitcoindev/a186c724-eef7-4964-9aba-85ae9cce2249n%40googlegroups.com?utm_medium=email&utm_source=footer>
> .
>

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[bitcoindev] Re: [BIP Proposal] Proof-of-Activity Reclamation (PoAR)

[Boris Nagaev]

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Hi Donald,

Thanks for sharing your proposal!

There are several additional objections worth considering:

   1. It would require a hard fork. Older nodes would reject blocks with a 
   higher-than-expected miner reward. By contrast, SegWit and Taproot were 
   implemented as soft forks.
   2. It breaks long-term inheritance schemes. Imagine a newborn inheriting 
   1000 BTC from a wealthy relative. The relative sets a 30-year timelock to 
   ensure the funds are not misused during childhood. This proposal would 
   interfere with that intention and potentially strip the heir of their 
   rightful inheritance.
   3. It penalizes long-term planning and low time preference. Users who 
   intentionally lock up funds for decades (whether for inheritance, security, 
   or economic reasons) would be disproportionately impacted.
   4. It changes who pays for network security. Miners are expected to be 
   compensated in the long term by transaction fees paid by active transaction 
   senders. This proposal would instead take value from long-term holders who 
   aren't participating in the transaction flow, effectively taxing them 
   without consent.


Best regards,
Boris

On Tuesday, July 15, 2025 at 3:26:35 PM UTC-3 Donald Dienst wrote:

Dear Bitcoin developers,

I would like to propose a new BIP titled "Proof-of-Activity Reclamation 
(PoAR)," which aims to address the long-term economic effects of lost and 
abandoned UTXOs.

This proposal introduces a fully automated and rule-based mechanism to 
gradually recycle coins that have been provably inactive for over 20 years. 
These coins are returned to the undistributed pool and slowly reintroduced 
via future block rewards—extending miner incentives while respecting the 21 
million BTC cap.

You can view the full proposal here:
https://gist.github.com/Brandchatz/56c39d289db9e56190c13922850815b8

I welcome your thoughts, suggestions, and critiques.

Best regards,  
Donald Dienst  
dddi...@protonmail.com

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[bitcoindev] Re: [BIP Proposal] Proof-of-Activity Reclamation (PoAR)

['Donald Dienst' via Bitcoin Development Mailing List]

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Boris,

Thank you for taking the time to raise these thoughtful objections. They 
highlight important edge cases, particularly around long-term inheritance 
planning and time-locked contracts, that deserve further discussion.

The intent of this proposal is not to seize anyone’s Bitcoin but to create 
a rules-based mechanism for reintroducing truly abandoned coins—those 
locked away forever due to lost keys—back into the economy. If a private 
key is irrecoverably lost, the associated Bitcoin is effectively removed 
from circulation and, arguably, no longer owned. In such cases, the 
so-called "security tax" affects no active participant.

That said, your concerns are valid. One potential refinement would be to 
extend the inactivity window significantly—perhaps even to 100 years—to 
better accommodate multi-generational ownership and time-locked smart 
contracts. The core idea is that a sufficiently long timeframe, paired with 
clear expectations and wallet alerts, can strike a balance between 
preserving ownership rights and sustaining economic viability.

It's also possible that this proposal—or one like it—may only be 
realistically implemented as part of a broader hard fork in the distant 
future, potentially bundled with other critical changes such as 
post-quantum security upgrades. I hope that when that moment comes, a 
mechanism for reclaiming permanently lost coins is part of that discussion.

To those who object on purely ideological grounds, I would offer this 
reflection: if something can happen, it will happen—and it will continue to 
happen. People will keep losing keys. And one day, someone will lose the 
private key to the very last satoshi. Long before that point, Bitcoin may 
become functionally unusable—not because of inflation like fiat currencies, 
but due to irreversible deflation and economic ossification.

In that light, maintaining the myth that permanently lost coins should 
remain sacrosanct is not ideological purity—it’s advocating for a slow 
march toward irrelevance. To preserve Bitcoin’s utility as both a store of 
value and a medium of exchange, we must confront this eventuality with 
reasoned, transparent, and opt-in solutions.

Sincerely,
*Donald D. Dienst*


On Tuesday, July 15, 2025 at 3:42:15 PM UTC-4 Boris Nagaev wrote:

> Hi Donald,
>
> Thanks for sharing your proposal!
>
> There are several additional objections worth considering:
>
>    1. It would require a hard fork. Older nodes would reject blocks with 
>    a higher-than-expected miner reward. By contrast, SegWit and Taproot were 
>    implemented as soft forks.
>    2. It breaks long-term inheritance schemes. Imagine a newborn 
>    inheriting 1000 BTC from a wealthy relative. The relative sets a 30-year 
>    timelock to ensure the funds are not misused during childhood. This 
>    proposal would interfere with that intention and potentially strip the heir 
>    of their rightful inheritance.
>    3. It penalizes long-term planning and low time preference. Users who 
>    intentionally lock up funds for decades (whether for inheritance, security, 
>    or economic reasons) would be disproportionately impacted.
>    4. It changes who pays for network security. Miners are expected to be 
>    compensated in the long term by transaction fees paid by active transaction 
>    senders. This proposal would instead take value from long-term holders who 
>    aren't participating in the transaction flow, effectively taxing them 
>    without consent.
>
>
> Best regards,
> Boris
>
> On Tuesday, July 15, 2025 at 3:26:35 PM UTC-3 Donald Dienst wrote:
>
> Dear Bitcoin developers,
>
> I would like to propose a new BIP titled "Proof-of-Activity Reclamation 
> (PoAR)," which aims to address the long-term economic effects of lost and 
> abandoned UTXOs.
>
> This proposal introduces a fully automated and rule-based mechanism to 
> gradually recycle coins that have been provably inactive for over 20 years. 
> These coins are returned to the undistributed pool and slowly reintroduced 
> via future block rewards—extending miner incentives while respecting the 21 
> million BTC cap.
>
> You can view the full proposal here:
> https://gist.github.com/Brandchatz/56c39d289db9e56190c13922850815b8
>
> I welcome your thoughts, suggestions, and critiques.
>
> Best regards,  
> Donald Dienst  
> dddi...@protonmail.com
>
>

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Re: [bitcoindev] [BIP Proposal] Proof-of-Activity Reclamation (PoAR)

[Murch]

Hi Donald and all,

The idea of recycling dormant coins is one that has made the rounds 
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

I don’t have the impression that the idea has been particularly popular, 
and as BIPs go, this one is missing crucial parts, e.g.:

• A more comprehensive motivation based on thorough analysis how 
redistributing dormant coins improves the system as this constitutes a 
departure of the status quo for the supply schedule
• Specification of the redistribution rate and mechanism
• Specification of the out-of-band activity proof mechanism and how this 
out-of-band information would be introduced into the Bitcoin system as 
consensus critical information, and discussion of alternative approaches 
and why this is the correct approach
• Rationale for reclaiming dormant coins at halvings rather than UTXOs 
expiring after a fixed number of blocks
• An analysis of the backward compatibility, including especially the 
discussion of how to conduct this hard fork

In its current state, I would consider this document premature for a 
pull request and would encourage further development. Generally, the 
arguments and reasoning used in the motivation and rationale will need a 
lot more work to make a hard fork and a change in the economic paradigm 
palatable.

Cheers,
Murch

On 2025-07-10 15:55, 'Donald Dienst' via Bitcoin Development Mailing 
List wrote:
> Dear Bitcoin developers,
>
> I would like to propose a new BIP titled "Proof-of-Activity 
> Reclamation (PoAR)," which aims to address the long-term economic 
> effects of lost and abandoned UTXOs.
>
> This proposal introduces a fully automated and rule-based mechanism to 
> gradually recycle coins that have been provably inactive for over 20 
> years. These coins are returned to the undistributed pool and slowly 
> reintroduced via future block rewards—extending miner incentives while 
> respecting the 21 million BTC cap.
>
> You can view the full proposal here:
> https://gist.github.com/Brandchatz/56c39d289db9e56190c13922850815b8
>
> I welcome your thoughts, suggestions, and critiques.
>
> Best regards,
> Donald Dienst
> dddienst@protonmail.com --
> 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 email to bitcoindev+unsubscribe@googlegroups.com.
> To view this discussion visit 
> https://groups.google.com/d/msgid/bitcoindev/a186c724-eef7-4964-9aba-85ae9cce2249n%40googlegroups.com 
> <https://groups.google.com/d/msgid/bitcoindev/a186c724-eef7-4964-9aba-85ae9cce2249n%40googlegroups.com?utm_medium=email&utm_source=footer>.

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Re: [bitcoindev] [BIP Proposal] Proof-of-Activity Reclamation (PoAR)

[Peter Todd]

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On Tue, Jul 15, 2025 at 03:02:04PM -0700, Murch wrote:
> Hi Donald and all,
> 
> The idea of recycling dormant coins is one that has made the rounds 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
> 
> I don’t have the impression that the idea has been particularly popular, and
> as BIPs go, this one is missing crucial parts, e.g.:
> 
> • A more comprehensive motivation based on thorough analysis how
> 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 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 the
value of non-lost coins by increasing the total active supply, decreasing 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 justify
why you want to risk confiscating coins that were not in fact lost.

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

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