Here is the truth about Bitcoin.
The amount of Bitcoin is not limited at 21 million. It is not limited by an algorithm.
Bitcoin is limited by consensus.
Bitcoin can only grow, never contract.
Once there is a consensus amongst 51% of the miners to raise the Bitcoin cap, nothing stops them from raising the cap. Bitcoin mining is relatively centerlized. Reaching a consensus is easier then it seems.
Miners can decide to increase the cap, bit they can't decrease it. A central bank can decrease the amount of money and credit available, but with Bitcoin it's just impossible.
This is not saying that Bitcoin is not a good investment. My crystal ball is on vacation and I can't reach him to ask. All that I am saying that Bitcoin is not the freedom money it's touted as. Or at least that it has flaws that need fixing and fast.
#bitcoin
Replies (7)
It's not that simple actually. The miners work for the nodes. Miners can't change consensus, full nodes are the guardians of consensus. 51% attacks can double spend, reorg, or censor transactions but inside consensus rules. So the 21 million cap is actually secured by the full node runners. This is why the OP_RETURN debate is so high stake, if spam makes having a full node too costly, full node counts drop and the consensus rules become fragile. Once again, the miners work for the nodes. As for bitcoin cap decreasing, it actually happens quite often when people lose their coins.
#RunKnots
Thanks for the clarification.
Correct me if I am wrong, those who have a lot of mining power can use some of that power to create a lot of full nodes.
They can also corporate to create long chains quicker then non cooperating full nodes.
In other words, they can still force raising the cap. Other miners/node runners will have a choice to either accept the change or do a hard fork.
Institutions will back the change. A hard fork will mean osing the institutions. The Original Bitcoins value will drop as if it fell from a cliff...
Well there are millions of people.
Many have conflicting views of what Bitcoin is and how it works.
They can't all be right.
You don't understand fractional reserves.
Let BlackRock and Saylor gain a little more coins and they will play this card. FR is a bankers wet dream.
There can easily be 210M IOU Bitcoin and you and even Satoshi can do nothing about it.
Bitcoiners fear the "infinite supply" of Monero while there is almost zero custody of Mobero that could lead to a prolonged fractional reserves game. Meanwhile Bitcoin is just in the first innings.
If a group of miners choose to change consensus (e.g. raise the cap), they de facto hard fork and create a new coin.
The new coin could replace Bitcoin. But why would anyone leave the original chain/consensus ?
Miners could threaten to make the original chain unusable, multiplying reorgs and nuisance. The cost would be astronomical and only coordinated pools could, in theory, do this.
But if they do, the individual miners would instantly redirect their hashrate to unaffected pools. The attack would fail within minutes.
Institutions could choose to leave the original chain, but is it that much of a sell pressure ? Maxis would be thrilled by the redistribution. And institutions will have lost everything.
The miners work for the nodes, which are the bitcoin end users.
Run a node.
What I am describing is chain reorts + changes in cap limits.
You ar correct that this is a de facto hard fork. Yes, those who use knots won't be affected. But the media will continue to call the core Bitcoin, Bitcoin. KYC institutions will only accept core Bitcoin. The knots Bitcoin value will drop.
It won't help to use knots. If the demand for knots Bitcoin will drop, the value will drop.
That's a political discussion. No idea what Bitcoin users will agree on consensus in the future. But what is for sure is that there is no technical obligation however the pressure from big players. People may leave the chain on political pressure yes, but will there always be a cluster of maxis to defend bitcoin as money til the end ? Will they be enough ? I sure hope so.
