Could there be hyperinflation in Bitcoin?
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?
Answers:
As per the current rules there will only ever be 21 million coins at most (explained in other answers here). However, I'd like to add that this is by general agreement, which means that it can be changed.
See this question: Could there be hyperinflation in Bitcoin?
Looking at the history of money, I am skeptical that there will only ever be 21 million coins. I don't know of too many instances in history when money could be created out of thin air and wasn't. It would be foolish to ignore history. Whether or not there will be more than 21 million coins depends on whether or not "the people" demand it, and once again history is our guide.
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.
All they have to do is secure the mining power, fork the chain while altering the protocol to allow more bitcoins, tell the masses that any other chain is illegal and disastrous to society and there you go - job complete.
trader joe nor any of his zionist banker buddies should be allowed within an astronomical unit of a bitcoin mining operation under any circumstance.
The problem with idiots is that no matter how much time you spend trying to explain things to them, they will never understand -- if they simply lack the intellectual capacity to comprehend the explanation. Makes it a huge waste of time to bother.
Especially those who think they understand it when they do not.
