What is long-term consequence of "lost" coins?

Question

I wonder what is the long term consequences for a digital currency with an obfuscated blockchain. Suppose some billionaire buys a huge amount of Monero coins, then dies and nobody can recover his keys. Doesn't this mean those coins are effectively lost for eternity?

It's a different situation than say, somebody that accidentally loses or destroys millions/billions of dollars in fiat cash, since the issuing government can just reprint it. It's also somewhat different than somebody who owns a huge amount of a digital currency like Bitcoin, that has an open ledger. In that case, it's possible that private keys can be lost and the coins become forever unrecoverable, but you would at least know that the lost currency exists and which address it exists in. With Monero, the lost currency would simply be lost for eternity and the amount would be unknowable.

Over thousands of years, wouldn't this eventually start to significantly drain the supply?

I realize that thinking about "thousands of years" is silly - nobody even knows if any particular digital currency will survive in a decade, or if breakthroughs in quantum cryptography will render many digital currencies defective. But I wonder if anyone has thought about the problem with "lost" coins that seem inherent to any obfuscated blockchain. Is there any known solution to this?

Answer 1

The question is not really suited for this StackExchange as it incites debate, however...

Suppose some billionaire buys a huge amount of Monero coins, then dies and nobody can recover his keys. Doesn't this mean those coins are effectively lost for eternity?

The lost coins are effectively removed from circulation if "nobody can recover his keys", yes.

It's a different situation than say, somebody that accidentally loses or destroys millions/billions of dollars in fiat cash, since the issuing government can just reprint it.

Centrals banks have a habit of creating money out of thin air, yes.

Bitcoin... the coins become forever unrecoverable, but you would at least know...

Exactly how would you know if someone lost their private keys? You simply cannot, transparent ledger or not.

Over thousands of years, wouldn't this eventually start to significantly drain the supply?

So supply goes down, value goes up, people start using smaller denominations.

But I wonder if anyone has thought about the problem with "lost" coins that seem inherent to any obfuscated blockchain.

Per above, obfuscated or not, you have no way of knowing if anyone has lost their private keys.

Is there any known solution to this?

If there is no problem, no solution is needed.

Answer 2

There's no concerns theoretically, since Monero's tail emission continues to bring more Monero into the world, but there's a few you can think of in practice:

• XMR denominations could become too cumbersome to pay for small things (this was already apparent during the run of 2017)
• A future era of quantum computers could allow the coins to be stolen
• Press around wills, Monero and cryptocurrency in general could become a point of critique

Realistically though, these are all minor things.