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Big if true.

If not though, nearly a million out of 17.6 million bitcoins seems like a huge number to be out of circulation, and that's a lower bound (other bitcoin owners have almost certainly died without being able to pass them on). I know that the rate at which bitcoins are awarded slows over time, so it seems like eventually the rate at which bitcoins are lost due to owner death should exceed the rate at which they are created.

How is the long-term state of bitcoin not just a bunch of unrecoverable keys held by dead people?

If it ever became the major world currency and those coins were assumed to just be lost, their reappearance could cause single-day 6% inflation.
I cannot imagine Bitcoin becoming the major world currency without a wealth tax in place.
If you hold Bitcoins it's great. Every lost coin makes all the others more valuable. A true constant/deflationary resource, much more so than even gold.
A 10% increase of 0 is still 0.
Where do you get 0 though? They're currently worth $5,500. So 10% of $5,500 is actually $550.
I happen to just so have a limited supply of cryptographically signed numbers. I'll let you be the first one in on 'em. I'm selling them for $10,000 a piece.
I'll trade you it for some paper money I made up and this super cool sea shell that I found... what's your point?
There does not appear to be an infinite amount of hand created paper money or cool sea shells. So yeah, let's trade.
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Full of shit as usual but I guess we'll see.
There is nothing to see, McAfee is a well known charlatan and it's sad to see Bloomberg covering such a story.
Consistent with the reputation they've carefully built with the Supermicro story.
"My entire life I’ve been tracking people who are the best in the world, and hiding their identity,” he said in the interview.

Such as?

Mcafee is not of sound mind, and definitely not to be taken seriously if anyone has even followed his antics in the absolute loosest sense of the word.

I don't know why the article says it's "hard to know". Mcafee is an attention seeker.

Sloppy journalism from Bloomberg to even cover this.

Also sloppy to assume he must be dead. Someone who is going to invent something like Bitcoin may very well have strong libertarian and perhaps anarchistic political views, it's entirely likely he doesn't care too much about making money himself.

This is how to tank your reputation as a journalistic outlet.

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People like Kim Dotcom and McAfee just seek to be constantly in the news by creating controversies.
McAfee: "I'm about to unmask Satoshi"

Press: "Where is he?"

McAfee: "You are looking at him."

Awh dear this made my morning, nothing like reading quotes such as "I'm one of the best" from self-aggrandizing hasbeens :D.
John McAfee: "I am the Batman."