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Date: Sun, 20 Jul 2025 16:13:03 -0700 (PDT)
From: Javier Mateos <javierpmateos@gmail.com>
To: Bitcoin Development Mailing List <bitcoindev@googlegroups.com>
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 <634ea7a6-1695-46e8-a337-1fef1ac17a66@murch.one>
 <aHgQaJOEe0x0b0HY@petertodd.org>
Subject: Re: [bitcoindev] [BIP Proposal] Proof-of-Activity Reclamation (PoAR)
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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/=
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<p>Hi Donald and everyone!<br />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.</p>
<p>1) The issue of miner incentives is overstated<br />
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.</p>
<p>2) Artificial scarcity is not a problem (it=E2=80=99s part of the design=
)<br />
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.</p>
<p>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:<br />
=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)</p>
<p>3) The confiscation risk doesn't disappear just because it's framed as "=
reauthentication."<br />
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?</p>
<p>Peter Todd summed it up perfectly:<br />
=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</p>
<p>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 <strong>I have full freedom =
to decide what to do with my funds.=C2=A0</strong></p><p>4) Bitcoin does no=
t need to "reactivate" value to sustain its economy.<br />
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.</p>
<p><br />Sincerely,<br />Javier Mateos</p><br /><div class=3D"gmail_quote">=
<div dir=3D"auto" class=3D"gmail_attr">El mi=C3=A9rcoles, 16 de julio de 20=
25 a las 18:05:40 UTC-3, Peter Todd escribi=C3=B3:<br/></div><blockquote cl=
ass=3D"gmail_quote" style=3D"margin: 0 0 0 0.8ex; border-left: 1px solid rg=
b(204, 204, 204); padding-left: 1ex;">On Tue, Jul 15, 2025 at 03:02:04PM -0=
700, Murch wrote:
<br>&gt; Hi Donald and all,
<br>&gt;=20
<br>&gt; The idea of recycling dormant coins is one that has made the round=
s several
<br>&gt; times before, including in the form of the &quot;Bitcoin Dormant R=
ecovery
<br>&gt; Proposal&quot; just a couple months ago:
<br>&gt; <a href=3D"https://github.com/bitcoin/bips/pull/1852" target=3D"_b=
lank" rel=3D"nofollow" data-saferedirecturl=3D"https://www.google.com/url?h=
l=3Des&amp;q=3Dhttps://github.com/bitcoin/bips/pull/1852&amp;source=3Dgmail=
&amp;ust=3D1753137124690000&amp;usg=3DAOvVaw1c8HKJfPz8-UImLQL2cRJx">https:/=
/github.com/bitcoin/bips/pull/1852</a>
<br>&gt;=20
<br>&gt; I don=E2=80=99t have the impression that the idea has been particu=
larly popular, and
<br>&gt; as BIPs go, this one is missing crucial parts, e.g.:
<br>&gt;=20
<br>&gt; =E2=80=A2 A more comprehensive motivation based on thorough analys=
is how
<br>&gt; redistributing dormant coins improves the system as this constitut=
es a
<br>&gt; departure of the status quo for the supply schedule
<br>
<br>Worth noting that from an economic point of view redistributing genuine=
ly lost
<br>coins, and creating coins out of thin air, is essentially the same thin=
g:
<br>either way you are introducing coins into the active economy that were
<br>previously not in economic circulation. In both cases you are diluting =
the
<br>value of non-lost coins by increasing the total active supply, decreasi=
ng their
<br>purchasing power proportionally.
<br>
<br>If you want to argue for actually redistributing coins rather than just
<br>creating new ones out of thin air - for whatever reason - you need to j=
ustify
<br>why you want to risk confiscating coins that were not in fact lost.
<br>
<br>--=20
<br><a href=3D"https://petertodd.org" target=3D"_blank" rel=3D"nofollow" da=
ta-saferedirecturl=3D"https://www.google.com/url?hl=3Des&amp;q=3Dhttps://pe=
tertodd.org&amp;source=3Dgmail&amp;ust=3D1753137124690000&amp;usg=3DAOvVaw3=
ayDQjR3WXPKNrZ1NAgbAc">https://petertodd.org</a> &#39;peter&#39;[:-1]@<a hr=
ef=3D"http://petertodd.org" target=3D"_blank" rel=3D"nofollow" data-safered=
irecturl=3D"https://www.google.com/url?hl=3Des&amp;q=3Dhttp://petertodd.org=
&amp;source=3Dgmail&amp;ust=3D1753137124690000&amp;usg=3DAOvVaw2gtXy9MrLZ52=
7g8O0U-_V2">petertodd.org</a>
<br></blockquote></div>

<p></p>

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