[BIP Proposal] Proof-of-Activity Reclamation (PoAR)

Javier Mateos raises significant concerns regarding a proposal discussed within the Bitcoin community, critiquing its foundational arguments and offering insights into the broader implications of proposed changes. He begins by addressing the perceived issue of miner incentives diminishing as Bitcoin approaches its final coin mined, projected in the year 2140. Mateos argues that it's premature to propose structural changes based on future uncertainties, especially when Bitcoin has historically compensated for decreasing block rewards through transaction fees, preventing any systemic failure. This suggests an inherent resilience in Bitcoin's economic model against the backdrop of reducing miner incentives.

He further critiques the notion of artificial scarcity within Bitcoin as problematic, defending it as an intentional design feature. The divisibility of Bitcoin into 100 million satoshis per unit is highlighted as a counter to concerns about liquidity or value loss at high valuations. Mateos underscores the potential to extend divisibility if necessary, referencing existing practices in the Lightning Network. He invokes Satoshi Nakamoto’s perspective that the loss of coins does not harm the network's functionality but rather enhances the value of remaining units, opposing the idea that lost value needs to be actively recovered to maintain liquidity.

The discussion around the risk of coin confiscation, particularly through measures labeled as "reauthentication," is critically examined. Mateos challenges the logic that non-movement of coins equates to abandonment, pointing out the flaws in penalizing users for choosing not to move their assets, whether for personal reasons or as part of inheritance and trusts. He echoes Peter Todd’s sentiment that advocating for coin redistribution—or worse, confiscation—overlooks the fundamental principle of individual sovereignty central to Bitcoin. This principle opposes the notion of enforced activity as a criterion for legitimate ownership.

Lastly, Mateos disputes the assumption that reactivating lost or unspent Bitcoin is necessary for the sustainability of Bitcoin's economy. He argues that the system has not only managed to adapt to deflationary pressures induced by a fixed supply and coin loss but also thrives without needing artificial mechanisms to stimulate spending or circulation. This stance reinforces the belief in Bitcoin's robustness and its ability to naturally adjust to economic variations without external intervention.