On Mon, Mar 11, 2013 at 11:17 AM, Benjamin Lindner <ben@benlabs.net> wrote:
> Just activate a non-proportional
> demurrage (well, I won't complain if you just turn bitcoin into
> freicoin, just think that non-proportional would be more acceptable by
> most bitcoiners) that incentives old transactions to be moved

You could delegate the decision to the user with a rule like:

if (output<fee):
 limit lifetime of the UTXO to 10 years.
if (output>fee):
 unlimited lifetime

Then, when a user creates a transaction, he can decide whether he wants to have limited or unlimited lifetime. The rationale for limiting the lifetime for (output<fee) transactions is that they may have no inherent economic incentive to be spend.

If you think demurrage has a bad rep, wait until you see the response to escheatment (which is what's really being proposed here).

UTXO growth over time is worst-case linear, while computational resources increase exponentially. Mike nailed it on the head: all of this is a solution in search of a problem.

Mark