Now something that as value is backed by mathematics.. no ressources or power involved. Just math !
It's a great revolution toward progress that Crypto-Blockchain stuff bring to humanity !Evolution!
It's a great revolution toward progress that Crypto-Blockchain stuff bring to humanity !Evolution!
Be careful with "backed by math". It is backed by the math that a miner consortium decides to put into the software they are running to make the block chain. You may think that the 21 million coins are "fixed by math", but that's not true. They are only fixed by the lines of software that are running now on the nodes of the miner pools. The only thing that withholds them from changing that, is the *psychological* barrier ; the fact that this was so hammered into the minds of the users that if ever they dare to change that, the whole belief system crumbles. But it is not "backed by math", at all.
Where does this 21 million come from ? It comes from the fact that there's a piece of software that has a counter, and every 210 000 blocks, it halves the block reward.
Here's that piece of code:
It means that during 210 000 blocks, there were 50 coins ; then there were 25 coins in the next 210 000 blocks, etc....
As 50 + 25 + 12.5 + 6.25 + .... = 100
we have that in total, *if this piece of software continues to run unchanged for the next 100 years or so*, there will be 210 000 * 100 = 21 000 000 coins in total.
If tomorrow, all the miner pools together (there are about 20 of them) decide to change those few lines of code, you can print just as many bitcoin as you want. No math, apart from the trivial math that calculates the sum when you have the lines of code, in the same way that "the math determines the emission of fiat currency", when a central bank prints, say, a million dollars a day, you can say that "the math" fixes the amount of dollars printed per year to 365 million.
Well that's an interesting perspective, but could you please elaborate more?
As far as I understand, the total number of Bitcoins is the sum of a Geometric series (S):
S = 210000 x 50 x ( 1 / (1 - 0.5) ) = 21 million.
If we already have a given geometric series, how can we change change its sum?
The total number of bitcoins is the sum of a Geometric series, because that is what is programmed in the piece of code I quoted. If you change that code (that is, if the miners change that code), then this sum becomes whatever you program there. There is no "mathematical constraint" in bitcoin that would make bitcoin cryptographically fail or something if this changed - that's what I mean by "backed by mathematics". Suppose for instance, that there was a bitcoin to be created for every block number being a prime number, and that this prime number played an essential cryptographic role without which, the system would simply not function. Then you could say that the emission rate of bitcoin was somehow "backed by mathematics".
But the "backed by mathematics" is in our case, simply the sum of the numbers that have been programmed by a few lines of code: if you change those lines of code, then the "mathematics" will simply sum to something else. Like I said, change this line :
nSubsidy >>= halvings;
into
nSubsidy <<= halvings;
and you have now a doubling instead of a halving every 4 years, and the sum of all coins is "backed by mathematics" to become infinite.
If all miners do that and agree on that, then right now, they start earning, not 12.5 coins, but rather 200 coins per block, and in a good 3 years, 400 coins per block.
BTW, that would have been a wiser emission curve (at least for a while), to emit more coins when adoption grows, rather than give all the stash to a few early adopters, but silly belief in sound money theory fucked up bitcoin - but now bitcoin is stuck in that belief system.
Many thanks for the profound explanation. I'm not that good at math and maybe that's why I still think it's impossible without totally ruining Bitcoin to make those changes. Since there's no way miners want to ruin Bitcoin they would never agree on making those changes to the code. But theoretically you are right I think. At least I can't prove otherwise.
