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

From: "'Donald Dienst' via Bitcoin Development Mailing List" <[email-masked]>
Date: Tue, 15 Jul 2025 14:58:40 -0700 (PDT)

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  
> [email-masked]
>
>

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