This isn’t a matter of ‘a majority of bitcoin miners refusing to increase the limit’. This isn’t something the miners could pull off themselves even with perfect cooperation among them. Producing additional coins above those specified by the bitcoin protocol is visible. Everyone can see whether the number that happens to be hashed represents a bitcoin or some other thing the miner decided to make (a NotBitcoin). The task of the miner then is to find someone who is willing to buy his newly minted alternate currency for the same amount that a bitcoin sells for. That is difficult. Very difficult. Especially since the change is from something stable to something that is already known can be changed on a whim.
I should have been clearer about what I meant by increasing the number of bitcoins. I meant altering the bitcoin protocol so that either the per-block reward is increased or the number of blocks between the reward-halving is increased, or that the fraction by which the reward decreases is decreased. Changing the current per-block reward would be much more difficult because it wouldn’t be accepted by the majority of clients. Changing the reward-halving rate or fraction would be easier because it could be implemented in the current clients to occur far enough in the future that the vast majority of clients would accept blocks with the altered protocol. If a sufficient number of miners began using the new protocol it would be difficult for exchanges and normal users to stay on the old protocol after the fork; the delay between blocks in the original-protocol chain would increase significantly until the difficulty adjusted and having a split networkd would make it very difficult for the minority supporters to do business with bitcoins. Perhaps the old original chain would continue and be revalued according to its new utility, kind of like gold and silver coins were kept around for quite a while after the Federal Reserve started issuing notes. Neither chain would have precisely the same value it did before, but they could diverge fairly smoothly and slowly if it was a small change in the protocol.
In other words; if enough people think a permanent finite supply of bitcoins is a bug, it will be treated like previous bugs in the block chain. It will be fixed in advance, with users and miners given enough time to update to the new clients. So long as at least one exchange and the majority of miners agree on a protocol change I think it’s inevitable that it will happen.
This is true but an innaplicable and entirely misleading analogy. To try to express what it would mean in those terms it would be if there were federal reserve notes called “dollars” that can be redeemed for silver and an entirely different kind of note that someone tries to call “dollar” that cannot be redeemed for silver. Expecting people to assign just as much value to the latter as the former is difficult. Especially if there is no government there decreeing that it is law that everyone must accept NotDollars as legal tender.
But that’s precisely what happened. A US Dollar(1792) is worth “three hundred and seventy-one grains and four sixteenth parts of a grain of pure, or four hundred and sixteen grains of standard silver”. A US Dollar(2013) (Federal Reserve Note) is worth less. If you actually possess a US Dollar(1792) it is still worth 371.25 grains of silver by definition, but probably quite a bit more to a collector. I don’t know the complete history of the Dollar, and its change in value didn’t happen overnight, but it’s probably mostly because of the length of time it took for that change to occur. I don’t think a large change to the bitcoin protocol would be accepted today. But a planned change that would occur in 5 years and was expected to incur a minimal change of value at that point? Definitely.
If a sufficient number of miners began using the new protocol
So say that these miners, who are incidentally nearly always owners of significant numbers of bitcoins decide that they want to inflate the currency and voluntarily devalue their assets (because people totally do that kind of thing).
They announce their intention to do so far in advance.
They fork changes to both their mining software and at least one bitcoin client. (They can’t change the reference implementations. They have no chance in hell of persuading Gavin Anderson to change the official bitcoin software in violation of the prohibited changes list.)
They try to convince all uses to download their modified clients. They have to overcome all (rather rational) fears that this new currency is unstable in as much as even the fundamental aspects are changed at whim. They have to overcome the (entirely rational) fear of each individual that if they accept NotBitcoins then others may not, whereas if they accept bitcoins then NotBitcoin users must accept them. The users have to not care (or be kept ignorant) of the fact that their client is incapable of distinguishing between two inherently different currencies.
They have to somehow prevent any of the other people in the world with a vested interest in maintaining the value of bitcoins from doing mining. Even if the current miners ignore their own rational incentive to maintain the value of the coins they just mined, everyone else has years in which to set up hardware to do mining. And wouldn’t need years. They need days, even assuming not a single existing miner defected against the inflation alliance.
The “51% of computing power” metric which is relevant to different histories of the bitchain is irrelevant. If the inflation alliance manages to have 20 times the computing power of those who have created miners for the original currency all that serves to do is create massive incentives for inflation alliance members to defect back to the original currency. Their hardware and electricity costs become suddenly far more productive at creating bitcoins in the conventional bitchain.
In other words; if enough people think a permanent finite supply of bitcoins is a bug, it will be treated like previous bugs in the block chain.
You are treating the bitcoin economy as if it has the same rules, incentives and capabilities as a country with a government enforced currency and a central bank which implements monetary policy in pursuit of political objectives. However, these similarities are superficial. The actual microeconomic incentives, available tools, problems, goals and powers are not the same. Your proposal requires many actors to do things that go against their personal self interest voluntarily. That isn’t how the world works.
I’m confused; surely there could exist a client that can parse both Bitcoin and NotBitcoin, even if it uses an identical protocol to talk about them.
The entire proposal still seems more absurd than a 8-1 or 10-1 split (with the instant inflation that is efficient for such a split) which would be the actual result of adding a byte or decimal point to the maximum precision.
I’m confused; surely there could exist a client that can parse both Bitcoin and NotBitcoin, even if it uses an identical protocol to talk about them.
Yes. the creation of such a client does not seem to be a technical difficulty. Convincing people to use it and treat the two currencies as equivalent is what isn’t trivial.
I should have been clearer about what I meant by increasing the number of bitcoins. I meant altering the bitcoin protocol so that either the per-block reward is increased or the number of blocks between the reward-halving is increased, or that the fraction by which the reward decreases is decreased. Changing the current per-block reward would be much more difficult because it wouldn’t be accepted by the majority of clients. Changing the reward-halving rate or fraction would be easier because it could be implemented in the current clients to occur far enough in the future that the vast majority of clients would accept blocks with the altered protocol. If a sufficient number of miners began using the new protocol it would be difficult for exchanges and normal users to stay on the old protocol after the fork; the delay between blocks in the original-protocol chain would increase significantly until the difficulty adjusted and having a split networkd would make it very difficult for the minority supporters to do business with bitcoins. Perhaps the old original chain would continue and be revalued according to its new utility, kind of like gold and silver coins were kept around for quite a while after the Federal Reserve started issuing notes. Neither chain would have precisely the same value it did before, but they could diverge fairly smoothly and slowly if it was a small change in the protocol.
In other words; if enough people think a permanent finite supply of bitcoins is a bug, it will be treated like previous bugs in the block chain. It will be fixed in advance, with users and miners given enough time to update to the new clients. So long as at least one exchange and the majority of miners agree on a protocol change I think it’s inevitable that it will happen.
But that’s precisely what happened. A US Dollar(1792) is worth “three hundred and seventy-one grains and four sixteenth parts of a grain of pure, or four hundred and sixteen grains of standard silver”. A US Dollar(2013) (Federal Reserve Note) is worth less. If you actually possess a US Dollar(1792) it is still worth 371.25 grains of silver by definition, but probably quite a bit more to a collector. I don’t know the complete history of the Dollar, and its change in value didn’t happen overnight, but it’s probably mostly because of the length of time it took for that change to occur. I don’t think a large change to the bitcoin protocol would be accepted today. But a planned change that would occur in 5 years and was expected to incur a minimal change of value at that point? Definitely.
So say that these miners, who are incidentally nearly always owners of significant numbers of bitcoins decide that they want to inflate the currency and voluntarily devalue their assets (because people totally do that kind of thing).
They announce their intention to do so far in advance.
They fork changes to both their mining software and at least one bitcoin client. (They can’t change the reference implementations. They have no chance in hell of persuading Gavin Anderson to change the official bitcoin software in violation of the prohibited changes list.)
They try to convince all uses to download their modified clients. They have to overcome all (rather rational) fears that this new currency is unstable in as much as even the fundamental aspects are changed at whim. They have to overcome the (entirely rational) fear of each individual that if they accept NotBitcoins then others may not, whereas if they accept bitcoins then NotBitcoin users must accept them. The users have to not care (or be kept ignorant) of the fact that their client is incapable of distinguishing between two inherently different currencies.
They have to somehow prevent any of the other people in the world with a vested interest in maintaining the value of bitcoins from doing mining. Even if the current miners ignore their own rational incentive to maintain the value of the coins they just mined, everyone else has years in which to set up hardware to do mining. And wouldn’t need years. They need days, even assuming not a single existing miner defected against the inflation alliance.
The “51% of computing power” metric which is relevant to different histories of the bitchain is irrelevant. If the inflation alliance manages to have 20 times the computing power of those who have created miners for the original currency all that serves to do is create massive incentives for inflation alliance members to defect back to the original currency. Their hardware and electricity costs become suddenly far more productive at creating bitcoins in the conventional bitchain.
Send in the clergy! They can move diagonally!
You are treating the bitcoin economy as if it has the same rules, incentives and capabilities as a country with a government enforced currency and a central bank which implements monetary policy in pursuit of political objectives. However, these similarities are superficial. The actual microeconomic incentives, available tools, problems, goals and powers are not the same. Your proposal requires many actors to do things that go against their personal self interest voluntarily. That isn’t how the world works.
I’m confused; surely there could exist a client that can parse both Bitcoin and NotBitcoin, even if it uses an identical protocol to talk about them.
The entire proposal still seems more absurd than a 8-1 or 10-1 split (with the instant inflation that is efficient for such a split) which would be the actual result of adding a byte or decimal point to the maximum precision.
Yes. the creation of such a client does not seem to be a technical difficulty. Convincing people to use it and treat the two currencies as equivalent is what isn’t trivial.