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.