undefined | Better HN

0 pointsketzu4y ago0 comments

> Bitcoin's monetary policy is fixed. It is in nobody's hand, but everybody who decides to run a validating node.

My understanding is that bitcoins monetary policy can be changed through code, something a very small group is allowed to do in practice, even though theoretically it could be forked easily. Previous attempts at democratication of decisions have been prevented by various questionable tactics and by measures of share of computer power, something also held by very few people. Maybe this changed since I stopped paying attention to it, though.

> which are privately owned

Again, my understanding is that the reserve banks are some form of private entities but essentially owned by their governments (e.g., profits are transfered to them). Sites like the faq of the fed (https://www.federalreserve.gov/faqs/about_14986.htm) and information about the german central bank seem to confirm that view so far.

0 comments

sparkie4y ago

> My understanding is that bitcoins monetary policy can be changed through code, something a very small group is allowed to do in practice, even though theoretically it could be forked easily. Previous attempts at democratication of decisions have been prevented by various questionable tactics and by measures of share of computer power, something also held by very few people. Maybe this changed since I stopped paying attention to it, though.

The monetary policy cannot be changed by modifying the code. If you modify the code of your own node, you simply create a different set of rules to the network, which might lead you to eventually end up on a forked chain which has no economic use.

The monetary policy is not only in the code, but it is in the network. Every user who validates blocks enforces the monetary policy. No miners are able to dive into another user's machine and update the code which their nodes are running. Bitcoin is not a democracy. It isn't most-votes-wins. If somebody were to propose adjusting the monetary policy, they need overwhelming consensus of all bitcoin users. Something which will get increasingly more difficult with passing time and adoption growth.

Changing the code to adjust the bitcoin issuance rate is effectively creating a shitcoin which integrates bitcoin's historical ledger into it. That's simple to do. Now you have the insurmountable task of convincing all bitcoin users to switch away from using the bitcoin they know and love to using your new shitcoin. This has been attempted and failed (Bitcoin Cash).

ketzuOP4y ago

We seem to misunderstand each other, I am not talking about a miner making changes to their own mining code. There are, to my out-of-date knowledge, two fairly small groups with a lot of power within bitoin:

* The maintainers of the bitcoin core code

* The miners proving a large portion of the hashing power

These two groups have a large amount of centralised power. Last time I was involved with bitcoin the maintainers were essentially five people for example.

The network majorly runs the core client in various forms [1] by far the largest portion even runs the newest, or at least last two major releases. If those two groups decide to change the monetary policy via the source code of bitcoin core your options are basically to take your losses and fork the official chain or go with it.

But as I mentioned, I am out-of-date on my bitcoin knowledge, so these things might have changed.

> If somebody were to propose adjusting the monetary policy, they need overwhelming consensus of all bitcoin users.

I don't believe that is true, you just need consensus by hashing power and maybe harassing/ddosing power [2], otherwise you risk them sabotaging and damaging your new network too much to recover.

edit: I just read your other response to better understand your point instead of just trying to make mine clearer. It seems you are of the opinion that the consent of most economic participants, especially end users, is required to make that change. Which, obviously, is in contrast to my hypothesis that most people will follow whatever the current core version of bitcoin does as long as the primary hashing power of the system agrees.

I wonder if that's a dispute that could be settled with data/arguments at all, or if that's just something we have to disagree on.

[1] https://bitnodes.io/nodes/

[2] https://www.reddit.com/r/Bitcoin/comments/3jj2hf/bitcoin_xt_...

j / k navigate · click thread line to collapse