Currently the creation of new coins is fixed at a certain rate which halves every few years and will at some point in the future drop to zero. As I understand it, this is by consensus, i.e. all the nodes in the network agree on this protocol.

Suppose at some point in the future the Bitcoin community were to decide that the currency's deflationary bias wasn't such a good thing for the economy and that it would be better to start expanding the monetary base at a higher rate. What would it take for such a policy to take effect? Specifically, what percentage of the nodes in the network would have to vote in favor of the new expansionary policy?

And if indeed the network could vote itself into an expansionary policy, is it then also conceivable that it might vote itself into a hyperinflation, where the rate of expansion gets out of hand?

In short, what does it take to change the rate of expansion of the Bitcoin monetary base, and how easy or difficult is it to achieve as compared with the stroke of a central banker's pen?

PS: I can see a future where the top miners who own most of the computing power decide amongst themselves that they deserve more than their share of bitcoins after all and so they decide to institute the change, and I'm curious to know how the network would handle such an event.

  • You are misusing the word "hyperinflation". It doesn't mean what you think it means. Bitcoin is experiencing hyperinflation right now. It has halved in value in the last 3 weeks. If it continues to halve in value every 3 weeks for the next year, it will become worthless. – Robin Green Dec 18 '13 at 18:21

Not everybody needs to agree (that would probably never happen!) for there to be a change in the protocol (which would be needed to cause inflation), but it's not based on just a majority of hashpower either.

It's really a vast majority of users that need to agree; if just 51% of users decided to change the protocol, it's entirely possible that it would cause a massive loss in confidence in both resulting chains. Retailers and every other service would need to choose which to accept (or accept both), and try to understand the difference, and communicate that on to users.

I think most of us know its a bad idea to go down that path with Bitcoin while it's not yet been fully accepted as mainstream. A smoother option would probably be to create an alternative cryptocurrency with a new name, rather than trying to split the Bitcoin user base into two parts.

  • It can very likely happen. See my answer. The big corporations are being expected to provide free mining in the future. This has been the expectation, and that is why market-based transaction fees don't have to scale well. No one has refuted that transaction fees can't scale and Gavin admits it. The fanboys can continue in their myopia like good little slaves that think they understand logic. – Shelby Moore III Mar 28 '13 at 0:54
  • Do I understand correctly that hash power doesn't matter here, nor does strictly speaking the number of nodes (one participant could run multiple nodes); and that in fact what really matters here is the number of participants (i.e. individuals and corporations) who agree to such a change in the protocol? – Manish Mar 28 '13 at 1:02
  • @Manish, that's the way I see it. – Highly Irregular Mar 28 '13 at 1:06
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    @Manish, if we're talking about forking the blockchain, it could even split 4 ways with 30%, 27%, 25% and 18%... anyone can run their own blockchain, but it's only valuable to do so when others find it useful. – Highly Irregular Mar 28 '13 at 1:09
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    @KarelBílek, if miners that didn't change were in the minority, their blocks may start to be rejected (depending on how the change was implemented), or there may be some other consequence such as miners receiving a lower block reward. – Highly Irregular Apr 4 '13 at 17:55


No. The network doesn't vote to change itself. Read this: What can an attacker with 51% of hash power do?
Arguably, you could try to get a change to the bitcoin client implemented through astroturfing.

Here's how you'd increase monetary inflation.

  1. Find this code:

    int64 static GetBlockValue(int nHeight, int64 nFees)
        int64 nSubsidy = 50 * COIN;
        nSubsidy >>= (nHeight / 210000);
        return nSubsidy + nFees;
  2. Change 50 to, I dunno, 100.

  3. Convince everybody else to do the same thing. Not just a majority - everybody.
  • And what if I do 1 and 2 and part of 3, i.e. say I get a majority, then does that mean we end up with two chains, and if so then which is the "real Bitcoin?" Since it's peer-to-peer I'm assuming it's just Bitcoin 1 (devalued) and Bitcoin 2 (original) from that point on. – Manish Mar 28 '13 at 1:16
  • @Manish Which one is the real Bitcoin? Good question - I'm sure that it's a question that would generate many flamewars should this situation come to pass. – Nick ODell Mar 28 '13 at 1:26
  • I downvoted because this is factually incorrect. Not everybody is required. Attacker only needs to change 51% of the mining clients' software (actually those that comprise 51% share of hash power) which you the attacker are running on your peers. Are you confused? – Shelby Moore III Mar 28 '13 at 3:10
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    @ShelbyMooreIII Old clients will just reject the new chain. That might cause them to enter safemode, but that can be turned off with a simple -disablesafemode. – Nick ODell Mar 28 '13 at 4:11
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    @Manish Clients will go into 'safe mode' if they see an invalid chain that is longer than a valid chain - the logic being that there's probably a problem that should be fixed before you try to make transactions. That's where the -disablesafemode switch comes in. Once disabled, their transactions would be relayed and mined by both chains, but over time, the two chains would disagree on more and more. – Nick ODell Mar 28 '13 at 21:13

despite the fact that there are some possible kind of 51% attack for miners and despite the fact that miners really love increase bitcoin creation rate and make profit; you should know they cannot change the basic rules of blockchain like changing block generation protocol and rules.

anything related to block protocol must be accepted by full nodes (~20 thousands of live full nodes) who are mostly influenced by bitcoin core school of though (a group of independent wise developers). they wont accept such a change because they are more like bitcoin owners rather than miners; so they would be against inflation by proof of game theory.

what miners can do for that? nothing, as we saw in SegWit2x activation debate, although most mining cartels was in favor of SegWit2x they couldnt run it because Bitcoin Core Developer team rejected the proposal. that was a simple example of changing block protocol (its size); which could not take the ride by just miners supports.

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