user63: The idea of putting back lost Bitcoins back onto block rewards seems like a great idea. 
I acknowledge that there were quite a handful of early adopters who were generating blocks daily, but had no idea what they were doing. Time passes, they forget about Bitcoin and they format their hard drive or whatever. Their coins enter the nether, never to be seen again.
I wouldn't be surprised if >5% of the current coins in circulation were lost due to mishandling. My question is, why isn't there something implemented for this? I can't find any disadvantage for this feature, it would simple as invalidating coins that haven't been transferred in x amount of time, which is probable for only sorting lost coins.

user1076: I have myself worried about this, but:
As the volume of traded bitcoins increases so will the transfer chain.
While the size of the chain is not a big problem, validating that there are no double transfers would take increasingly more GPU time.
As such it is possible that many miners will start to cull the chain on their own to be faster and in many doing so it becomes the de facto standard to cull the chain.
If growing computer power makes chain handling a non issue a similar thing could still happen; if bitcoin markets are weighed down by too many missing coins, fewer miners will exist and as such security diminishes - once enough coins have been stolen the system will reboot, so to speak, and hacking/mining will become hard once more.
Even if it DOES become an issue, a new crypto-currency backed by the few bitcoins left would be divisible once again.
If a lost key is recovered and bitcoin supply is very small there will be a massive upset and people will likely just switch entirely to the new cryptocurrency with little hassle as when the dollar went off gold entirely and no one noticed.
This means that your bitcoin savings are probably limited at around maximum 200 years and minimum 10-20 with no self-sending.

user149: I think that this would be an improvement because it would reduce the unpredictability of the (M0) money supply, which is a good thing. There are two other effects it might have which are also potentially good: 1. it would provide more ongoing reward for miners after ab initio mining runs out, and 2. it would limit the amount of transaction history that you need to remember in order to check the correctness of a transaction.

user85: I agree with the other answers pointing out the issues with this approach. And no matter how good an idea it was, it would be a very bad idea to change the rules Bitcoin follows at this time. But I think the benefits outweigh the disadvantages overall and that this would be a sensible approach for future crypto-currencies.
The best coin recovery proposals look more or less like this: If a transaction output is unclaimed for 20 years or so (you have to specify the time in blocks, but the equivalent of around 20 years) then it can be 'reaped' by a miner. The miner pulls that output into his coinbase transaction and is permitted to claim up to 50 coins (or some low number) from that pool for himself. Any coins remaining in the pool are passed along to the miner of the next block to claim. (No jackpot blocks.)
The advantages of this approach are that the supply of coins remains predictable and stable and that there is likely to be a mining reward even without unlimited inflation. The disadvantage is that you cannot store your coins forever without 'refreshing' them. Obviously, a client for such a scheme would have to have a simple 'refresh' option, likely automatic, and would display the 'expiration date' of all coins.

user153: To do so would force those with coins to spend them -- even if just sending to themselves.  
Spending coins lessens privacy.  That is a property of bitcoin that should not be diminished through this forceful measure.
Incidentally, why this fear of lost coins?
So there are lost coins.  It happens.  And we have fewer as a result.  It is not a problem -- except for those who lost them :-)  

user4774: As Stephen points out it would force people to spend coins. Age is not a proper measure of lostness. A common recommendation for savings accounts is to put them on physical backups such as printed QR codes that you add to while the account itself remains offline. People may even will their Bitcoin savings to their children. To force people to shuffle these coins around from time to time to keep them from being taken undoes one of the major safety features of Bitcoin. Namely that transactions can not be reversed, and your accounts can not be frozen or taken from you by any mechanism.
Also there is no reason. The entire Bitcoin economy could be run on a single bitcoin because of its divisibility. There simply is no reason to break other important Bitcoin features to regain those coins. It wouldn't even actually increase the miners' rewards because for every extra coin brought back the wealth is distributed over more coins reducing the value of each coin with inflation. A million dollars of value spread over 1000 bitcoins if there are 1000 bitcoins in circulation, is the same one million dollars of value spread over 1 bitcoin if there is only 1 bitcoin in circulation. 

63: <p>The idea of putting back lost Bitcoins back onto block rewards seems like a great idea. </p>

<p>I acknowledge that there were quite a handful of early adopters who were generating blocks daily, but had no idea what they were doing. Time passes, they forget about Bitcoin and they format their hard drive or whatever. Their coins enter the nether, never to be seen again.</p>

<p>I wouldn't be surprised if >5% of the current coins in circulation were lost due to mishandling. My question is, why isn't there something implemented for this? I can't find any disadvantage for this feature, it would simple as invalidating coins that haven't been transferred in <code>x</code> amount of time, which is probable for only sorting lost coins.</p>
 1076: <p>I have myself worried about this, but:</p>

<p>As the volume of traded bitcoins increases so will the transfer chain.</p>

<p>While the size of the chain is not a big problem, validating that there are no double transfers would take increasingly more GPU time.</p>

<p>As such it is possible that many miners will start to cull the chain on their own to be faster and in many doing so it becomes the de facto standard to cull the chain.</p>

<p>If growing computer power makes chain handling a non issue a similar thing could still happen; if bitcoin markets are weighed down by too many missing coins, fewer miners will exist and as such security diminishes - once enough coins have been stolen the system will reboot, so to speak, and hacking/mining will become hard once more.</p>

<p>Even if it DOES become an issue, a new crypto-currency backed by the few bitcoins left would be divisible once again.
If a lost key is recovered and bitcoin supply is very small there will be a massive upset and people will likely just switch entirely to the new cryptocurrency with little hassle as when the dollar went off gold entirely and no one noticed.</p>

<p>This means that your bitcoin savings are probably limited at around maximum 200 years and minimum 10-20 with no self-sending.</p>
 149: <p>I think that this would be an improvement because it would reduce the unpredictability of the (M0) money supply, which is a good thing. There are two other effects it might have which are also potentially good: 1. it would provide more ongoing reward for miners after ab initio mining runs out, and 2. it would limit the amount of transaction history that you need to remember in order to check the correctness of a transaction.</p>
 85: <p>I agree with the other answers pointing out the issues with this approach. And no matter how good an idea it was, it would be a very bad idea to change the rules Bitcoin follows at this time. But I think the benefits outweigh the disadvantages overall and that this would be a sensible approach for future crypto-currencies.</p>

<p>The best coin recovery proposals look more or less like this: If a transaction output is unclaimed for 20 years or so (you have to specify the time in blocks, but the equivalent of around 20 years) then it can be 'reaped' by a miner. The miner pulls that output into his coinbase transaction and is permitted to claim up to 50 coins (or some low number) from that pool for himself. Any coins remaining in the pool are passed along to the miner of the next block to claim. (No jackpot blocks.)</p>

<p>The advantages of this approach are that the supply of coins remains predictable and stable and that there is likely to be a mining reward even without unlimited inflation. The disadvantage is that you cannot store your coins forever without 'refreshing' them. Obviously, a client for such a scheme would have to have a simple 'refresh' option, likely automatic, and would display the 'expiration date' of all coins.</p>
 153: <p>To do so would force those with coins to spend them -- even if just sending to themselves.  </p>

<p>Spending coins lessens privacy.  That is a property of bitcoin that should not be diminished through this forceful measure.</p>

<p>Incidentally, why this fear of lost coins?</p>

<p>So there are lost coins.  It happens.  And we have fewer as a result.  It is not a problem -- except for those who lost them :-)  </p>
 4774: <p>As Stephen points out it would force people to spend coins. Age is not a proper measure of lostness. A common recommendation for savings accounts is to put them on physical backups such as printed QR codes that you add to while the account itself remains offline. People may even will their Bitcoin savings to their children. To force people to shuffle these coins around from time to time to keep them from being taken undoes one of the major safety features of Bitcoin. Namely that transactions can not be reversed, and your accounts can not be frozen or taken from you by any mechanism.</p>

<p>Also there is no reason. The entire Bitcoin economy could be run on a single bitcoin because of its divisibility. There simply is no reason to break other important Bitcoin features to regain those coins. It wouldn't even actually increase the miners' rewards because for every extra coin brought back the wealth is distributed over more coins reducing the value of each coin with inflation. A million dollars of value spread over 1000 bitcoins if there are 1000 bitcoins in circulation, is the same one million dollars of value spread over 1 bitcoin if there is only 1 bitcoin in circulation. </p>
