BIP: XXXX
Title: Proof-of-Activity Reclamation (PoAR)
Author: Donald Dienst [email protected]
Comments-Summary: A proposal to recycle provably inactive UTXOs after 20 years of inactivity
Status: Draft
Type: Standards Track
Created: 2025-07-09
License: BSD-2-Clause
This proposal introduces a mechanism to ensure the long-term activity of Bitcoin wallets by requiring periodic re-authentication. Specifically, wallet owners must perform an activation event—such as signing a transaction—at least once every 20 years. If no activation event occurs within this period, the funds in the inactive wallet will be removed from the UTXO set and returned to the pool of undistributed coins. These coins are not burned or seized, but instead reintroduced gradually into the mining reward schedule to extend tail emissions without exceeding the 21 million BTC cap. This approach helps mitigate the deflationary effects of lost coins and maintains an economically active supply, while preserving decentralization, security, and user sovereignty through fully automated, rule-based enforcement.
Over Bitcoin’s history, millions of coins have become inaccessible due to lost private keys, deceased users, or abandoned wallets. These coins remain forever locked in the blockchain’s history, yet they are effectively removed from circulation. This phenomenon creates artificial scarcity, distorts long-term economic modeling, and threatens Bitcoin’s usability as a global monetary system.
Because Bitcoin has a hard cap of 21 million coins and no built-in inflation beyond block rewards, the loss of coins is not just inconvenient—it is permanent. This undermines the full utilization of the network’s fixed monetary supply and diminishes the incentives available to future miners.
By introducing a transparent, rule-based mechanism to reclaim coins that have provably remained inactive for over 20 years, this proposal aims to preserve the monetary integrity of the 21 million cap in practice, not just in theory. Reclaimed coins are not redistributed arbitrarily—they are slowly reintroduced into block rewards, maintaining decentralized issuance and miner incentives even into the post-subsidy future.
This proposal introduces a periodic cleanup of inactive UTXOs, tied to Bitcoin’s halving schedule. It defines how wallets are considered inactive, how UTXOs are removed from the active set, and how their value is returned to the undistributed coin pool.
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Activation Event Definition
An activation event is any cryptographically signed transaction or message that demonstrates control of a wallet's private key. Examples include sending Bitcoin, signing a message, or any verifiable blockchain action. -
Re-authentication Period
Wallets must perform at least one activation event within a rolling window of 1,100,000 blocks (~20.9 years) to remain eligible. The countdown begins from block heightIMPLEMENTATION_HEIGHT, which is aligned with a future halving event. -
Epoch Trigger
The proposal becomes effective at a defined implementation block height (e.g., block 1,050,000). Starting with that block, all UTXOs are evaluated during each subsequent halving event (every 210,000 blocks). A UTXO is eligible for reclamation if:- It remains unspent, and
- It has had no signed transaction or activation event in the past 1,100,000 blocks, and
- The current block height is greater than or equal to
IMPLEMENTATION_HEIGHT + INACTIVITY_BLOCKS.
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Redistribution
At the 5th halving after the epoch (~20 years later), any UTXO that has not seen an activation event within that time is considered provably abandoned. These funds are removed from the UTXO set and returned to the undistributed pool. -
Reallocation Method
When a UTXO qualifies as inactive the reclaimed value is added to the undistributed coin pool. It is removed from the UTXO set. This removal is final. Any future transaction referencing the UTXO will fail validation. These coins are not immediately granted to miners but are gradually disbursed as part of future block mining rewards. This extends the tail emission of Bitcoin without exceeding the 21 million cap, allowing the network to maintain incentive structures even after the standard subsidy ends.
The transaction that originally created a UTXO remains permanently embedded in the blockchain for historical integrity. However, once a UTXO is deemed inactive and reallocated, it is permanently removed from the active UTXO set. This means that the output is no longer spendable.
Any future transaction attempting to spend this UTXO will be rejected by full nodes and miners as invalid, due to referencing an input that no longer exists in the UTXO set. This ensures that no double-spend or replay scenario is possible. The system preserves Bitcoin's immutability while maintaining a dynamic, accurate representation of spendable balances.
Users who are unaware of the re-authentication requirement or who lose access to their keys may have their funds removed from the UTXO set. However, a 20-year window offers ample time and can be extended if needed. Education and wallet software alerts can further mitigate this risk.
Some users deliberately avoid movement for privacy or ideological reasons. This proposal requires at least one signed action every 20 years—a minimal demand that maintains sovereign control without infringing on rights.
Scanning for inactive UTXOs during each halving introduces a processing burden. However, this occurs only once every 210,000 blocks (approx. 4 years), and full nodes can be optimized to index lastTouchedBlock data, allowing efficient pruning of candidates.
The system must ensure that fake inactivity cannot be forged to reclaim legitimate wallets. By requiring cryptographic silence (no signature) over decades, this risk is minimal.
The UTXO set is not transmitted between nodes. Instead, every full node independently constructs the UTXO set by validating the entire blockchain from the genesis block forward. During each halving, all nodes running the updated consensus logic will deterministically remove inactive UTXOs and update their local state accordingly. This ensures all honest nodes remain in consensus without requiring explicit UTXO synchronization over the network. Failure to implement the cleanup logic would cause the node to reject consensus blocks and become orphaned.
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"This violates property rights."
Bitcoin enforces ownership through cryptographic proof, not legal theory. If a wallet owner cannot sign a message or move funds over a 20-year span, it’s indistinguishable from abandonment in the context of decentralized consensus. This proposal does not target active owners or seize coins arbitrarily; it enforces a re-authentication window. -
"Bitcoin is immutable; this violates its principles."
The blockchain’s history remains immutable—no past transaction is changed or erased. The removal of inactive UTXOs simply reflects the evolution of consensus rules. Similar transitions have occurred in past soft and hard forks (e.g., SegWit, Taproot). The proposal introduces a forward-looking consensus change while preserving all historical data. -
"This could be abused in the future."
The rules are hard-coded and fully transparent. Redistribution happens only after strict criteria: 20+ years of inactivity after a public implementation block height. All reclaimed coins go into an undistributed pool, not to any government, company, or foundation. This limits potential abuse and aligns with Bitcoin’s decentralized ethos. -
"Some people will lose funds unfairly."
Like private key loss today, failure to act for over two decades is already a form of practical forfeiture. Wallet software can be updated to include re-authentication reminders, and community education can help minimize risk. The long window and predictable schedule offer substantial protection against accidental loss. -
"Why not just let the supply shrink?"
A shrinking supply increases the value of hoarded or lost coins, reduces long-term miner incentives, and may destabilize transaction fees. Over time, this deflationary pressure can discourage spending and liquidity, undermining Bitcoin's use as a currency.
Furthermore, if a substantial portion of the total supply becomes permanently inaccessible, Bitcoin could reach a tipping point where it no longer functions as a sustainable, decentralized economy. This proposal prevents such an outcome by gradually reactivating lost value in a transparent, rule-bound way—preserving both scarcity and economic vitality within the original 21 million coin limit.
This proposal preserves the 21 million Bitcoin cap while restoring economic access to coins that have otherwise been permanently lost. The 20-year window offers more than ample time for users or heirs to act. By aligning with Bitcoin's halving cycle, the process is both predictable and computationally efficient. There is no seizure or discretionary authority—only a rules-based system that encourages activity without punishment.
const int IMPLEMENTATION_HEIGHT = 1050000;
const int INACTIVITY_BLOCKS = 1100000;
const int HALVING_INTERVAL = 210000;
// Run at every halving after the rule has matured
if (currentBlockHeight % HALVING_INTERVAL == 0 && currentBlockHeight >= IMPLEMENTATION_HEIGHT + INACTIVITY_BLOCKS) {
for (UTXO utxo : UTXOSet) {
// UTXO is unspent and has had no signed transaction for over INACTIVITY_BLOCKS
if (
utxo.isUnspent() &&
(currentBlockHeight - utxo.lastTouchedBlock) >= INACTIVITY_BLOCKS
) {
RemoveFromUTXOSet(utxo);
AddToUndistributedPool(utxo.amount);
}
}
}This BIP proposes a minimal, predictable mechanism to recycle coins lost to time. It aligns with Bitcoin's principles: no central authority, fixed supply, and user responsibility. It establishes a fair and transparent process to reclaim value that would otherwise remain inaccessible forever.
The reintroduced funds support long-term miner incentives and network security, especially in the post-subsidy era. The proposal preserves user sovereignty, as any form of cryptographic activity—no matter how minimal—is sufficient to maintain ownership. It also respects Bitcoin’s immutability, as no history is rewritten, and the updated consensus rules are transparent, verifiable by any full node, and only take effect when voluntarily adopted by the network.
Ultimately, this mechanism ensures that Bitcoin remains economically sustainable and functionally sound for future generations, reinforcing its position not only as a store of value, but as a usable and decentralized digital currency.
https://gist.github.com/Welbert5753/2ca2bcd6ed01716f3aff248022dc9f7d.js