Bitcoin Inflation or a way to increase number of Bitcoins

[Aureum_Coffee]

We all know the number of bitcoins are hard coded into the software at around 21 million.  Miners often wonder if mining is a long term viable activity because eventually all the bitcoins will be mined.  Only transaction fees are left.  Transaction fees may or may not even cover the power cost to keep the miners running.  And miners are important to bitcoin's network integrity.

As an incentive to keep the miners online, the community can increase the number of Bitcoins to be mined.  So how do we increase the number of Bitcoins?

I think the solution is to a fixed exchange rate for old Bitcoin from version 1 to version 2.  Where the exchange rate is voted on by the community. 

The analogy in the real world would be a stock split.  Microsoft had split its stock several times in the past.  We can copy the methodology.  For example, if we want to increase the number of coins from 21 million to 42 million, then we can do a 1 to 2 split, where as each version 1 of the coin and exchange for 2 version 2 of the coin.

If Bitcoins is truly useful and is widely adopted in the future, then there would be no problem for version 2 Bitcoins to retain its fiat exchange rate.  Usually following a stock split, the underlying stock price increases.

There will be philosophical and technical challenges. 
1. Should we increase the number of coins to start with? 
2.  How to modify the software?

[syn999]

if somehow you can increase the limit of bitcoin. i would go to invest in gold and silver

[TippingPoint]

The cure sounds worse than the disease.

[cheesylard]

This is one of the dumbest ideas I have ever heard.

[w00dy]

This is one of the dumbest ideas I have ever heard.

+1

[Gabi]

Should we increase the number of coins to start with? 

NO

[nosurrender]

We all know the number of bitcoins are hard coded into the software at around 21 million.  Miners often wonder if mining is a long term viable activity because eventually all the bitcoins will be mined.  Only transaction fees are left.  Transaction fees may or may not even cover the power cost to keep the miners running.  And miners are important to bitcoin's network integrity.

As an incentive to keep the miners online, the community can increase the number of Bitcoins to be mined.  So how do we increase the number of Bitcoins?

I think the solution is to a fixed exchange rate for old Bitcoin from version 1 to version 2.  Where the exchange rate is voted on by the community. 

The analogy in the real world would be a stock split.  Microsoft had split its stock several times in the past.  We can copy the methodology.  For example, if we want to increase the number of coins from 21 million to 42 million, then we can do a 1 to 2 split, where as each version 1 of the coin and exchange for 2 version 2 of the coin.

If Bitcoins is truly useful and is widely adopted in the future, then there would be no problem for version 2 Bitcoins to retain its fiat exchange rate.  Usually following a stock split, the underlying stock price increases.

There will be philosophical and technical challenges. 
1. Should we increase the number of coins to start with? 
2.  How to modify the software?

If Bitcoin is widely used for trade by the time the last coins are mined, transaction fees should be incentive enough to keep the network stable. If not, Bitcoin is probably dead anyway.

[BitAddict]

If you can increase number of bitcoins their final value is going to be 0....

[countryfree]

I'm joining the majority of people who don't want the number of bitcoins to be increased over its built-in limit.

[bluemeanie1]

 The number of BTC is being INFLATED right now.  The supply currently increases by roughly 7200 BTC per day (value at the time of writing: $734,400).

 The layman sees Bitcoin as 'money from nowhere', but really every time a miner solves a block he/she is reducing the total worth of all BTC in existence.  Thus is APPEARS as though there are no transaction fees, when in reality the fees come from anyone who holds bitcoin.

 Very soon it will be possible to take short positions on BTC, making it possible to easily profit from BTC depreciation.  Thus people could easily take positions on technological disruptions, etc.

[BitAddict]

 The number of BTC is being INFLATED right now.  The supply currently increases by roughly 7200 BTC per day (value at the time of writing: $734,400).

 The layman sees Bitcoin as 'money from nowhere', but really every time a miner solves a block he/she is reducing the total worth of all BTC in existence.  Thus is APPEARS as though there are no transaction fees, when in reality the fees come from anyone who holds bitcoin.

 Very soon it will be possible to take short positions on BTC, making it possible to easily profit from BTC depreciation.  Thus people could easily take positions on technological disruptions, etc.

This rules come from the beginning, and it's completely clear.

But if you can change it now, because people wants... that is going to happen again, and again... and we're back in the same problem fiat has.

[tkone]

why in the world would u want to increase amount of bitcoin? the whole good thing about bitcoin is there is a limited amount lol,

also its divisible infinitely so you dont really need to increase the amount, even if there is 1 bitcoin everyone can still use .00000001 of one ect...

and transaction fees should go up slowly this way mining will be more profitable from transaction fees then the actuall block rewards,

aslong as we dont touch the block limit or mess with anything, the way it is now should slowly rise transaction fees, because since a bloc takes atleast 10 minutes well i noticed blocks today being much longer maybe even 40-1hr each

there would be ppl that want there transaction to go in the first available block for speed,
and will pay a higher transaction fee,

so transaction fee is very vital for the system to survive in the longterm

[Mike Christ]

[Elwar]

We all know the number of bitcoins are hard coded into the software at around 21 million.  Miners often wonder if mining is a long term viable activity because eventually all the bitcoins will be mined.  Only transaction fees are left.  Transaction fees may or may not even cover the power cost to keep the miners running.  And miners are important to bitcoin's network integrity.

Do you often worry about things that will happen in 130 years?

[Explodicle]

If transaction fees are ever too low, we can use assurance contract to pay for security.
https://en.bitcoin.it/wiki/Contracts#Example_3:_Assurance_contracts

[bb999]

We all know the number of bitcoins are hard coded into the software at around 21 million.  Miners often wonder if mining is a long term viable activity because eventually all the bitcoins will be mined.  Only transaction fees are left.  Transaction fees may or may not even cover the power cost to keep the miners running.  And miners are important to bitcoin's network integrity.

As an incentive to keep the miners online, the community can increase the number of Bitcoins to be mined.  So how do we increase the number of Bitcoins?

I think the solution is to a fixed exchange rate for old Bitcoin from version 1 to version 2.  Where the exchange rate is voted on by the community. 

The analogy in the real world would be a stock split.  Microsoft had split its stock several times in the past.  We can copy the methodology.  For example, if we want to increase the number of coins from 21 million to 42 million, then we can do a 1 to 2 split, where as each version 1 of the coin and exchange for 2 version 2 of the coin.

If Bitcoins is truly useful and is widely adopted in the future, then there would be no problem for version 2 Bitcoins to retain its fiat exchange rate.  Usually following a stock split, the underlying stock price increases.

There will be philosophical and technical challenges. 
1. Should we increase the number of coins to start with? 
2.  How to modify the software?

"the exchange rate is voted on by the community"

That is what democracy plus a fiat currency is, a majority votes for the guy/girl that promises to give them everything their heart desires for free and ultimately the currency is driven to zero value as finite resources collide with infinite desires.  Guaranteed disaster.

[bluemeanie1]

 The number of BTC is being INFLATED right now.  The supply currently increases by roughly 7200 BTC per day (value at the time of writing: $734,400).

 The layman sees Bitcoin as 'money from nowhere', but really every time a miner solves a block he/she is reducing the total worth of all BTC in existence.  Thus is APPEARS as though there are no transaction fees, when in reality the fees come from anyone who holds bitcoin.

 Very soon it will be possible to take short positions on BTC, making it possible to easily profit from BTC depreciation.  Thus people could easily take positions on technological disruptions, etc.

This rules come from the beginning, and it's completely clear.

But if you can change it now, because people wants... that is going to happen again, and again... and we're back in the same problem fiat has.

the point is that Bitcoin is said to be a 'free open money system', really it is not quite meeting these qualifications.

So if I send 20.00 of bitcoin from point X to point Y, it appears as though it is free- however the fee is embedded in this inflation function.  Eventually the price of BTC does not hold.

Consider this: Mining could be thought of as an investment vehicle. A 'rig' costs X dollars and generates 'Y' dollars.  As we generate an industry of mining hardware, and these investments become more tractable, then that means that it becomes available to larger capital pools.  The moment this happens then you also have mining monopolization which carries a host of system problems as well.

If an ASIC miner were indeed a great investment, why don't the ASIC manufacturers just start mining instead of selling the rigs themselves?

"the people who made the greatest gains in the Californian gold rush were the ones who sold the shovels."

[Phinnaeus Gage]

The OP suggested increasing the amount of coins via the stock split principle, thus in reality nothing will change.

If 1 BTC = $100, then 0.5 BTC = $50, and there would be twice the number of bitcoins as prior to the split worth the same exact amount. In case I presented it incorrectly, the Market Cap will remain the same with with twice as many bitcoins in the wild worth exactly half as much at the moment of the split.

Hell, you can do a reverse split all the down to 1 BTC = The Current Market Cap.

That said, ideally a 10:1 split would be better, with each unit seemingly easier to obtain at ~$10 each (ain't got a clue as to what the current exchange rate is, hence the ~).

[ryan1894]

I don't think this is a problem.

Miners will continue to mine until it is near non profitable to do so.

The only way bitcoin's security will be compromised is if someone immediately appears with > 51% of the systems hashing power and thus can slowly undo transactions in the blockchain (i think) - but this involves significant costs.

And if the system is compromised, people will deem their btc as worthless and cash out/accept their losses, and that person who wishes to sabotage the network will be left with a lot of worthless currency.

It is not profitable to be dishonest, and mining will always approach nash equilibrium

[calian]

To the OP: if you don't like having a hard cap on the number of coins go get into PPC or one of its clones. I actually think they have a sound model too but the 21MM of BTC is the #1 inviolable thing and why it remains king of crypto. You might be tarred and feathered for suggesting otherwise