[gregburd]

I think it's this facet of Bitcoin that's going to end up causing problems in the not too distant future. There will be an ever increasing number of "trapped" coins, BTC that belongs to someone who has abandoned it leaving it unused and thereby lowering the liquidity of the currency.

A potential solution would be to incorporate demurrage, which gradually reduces the value of currency the longer it's held, into the BTC algorithms. Essentially by encouraging the holders of a currency to use that currency you'd a) create a more fluid market and b) remove trapped value in some fixed amount of time. If you wanted to maintain a pool of BTC for a long time you'd simply cycle it between two addresses faster than the decay rate so that it's value wouldn't decay.

[wmf]

There are trillions of satoshis total, so even if most of them are lost there should still be billions left for people to use. By analogy, a certain amount of the world's gold has been lost but people still use it as a store of value.