<p>Who's going to continue to value Bitcoin if the supply inflates forever? Any miner that does this is shooting himself in the foot. Feel free though. </p>

CC BY-SA 3.0
2012-01-23T19:00:41.473Z
2012-01-23T19:00:41.473Z
Holliday
<p>I don't think it would happen. If the market didn't go along with the miners, the Bitcoins they mine would be worthless. Meanwhile, the difficulty on the original chain would drop, increasing its profitability.</p>

<p>This might be a more realistic fear when the reward starts to drop more catastrophically in the future. But it's hard to predict what would happen then because we really don't know what the usage of Bitcoin will be like then.</p>

CC BY-SA 3.0
2011-09-28T09:24:52.047Z
How is a 50% drop in the reward less catastrophic now than a 50% drop later?
Andrew Vit
CC BY-SA 3.0
2011-09-28T15:32:07.260Z
Two reasons: First, the reward will eventually drop to zero. Second, the reward will become a lower and lower fraction compared to the total number of existing Bitcoins.
David Schwartz
CC BY-SA 3.0
2011-09-28T18:27:25.860Z
@David, it's worth noting that even if the block reward were never reduced, the reward would still "be a lower fraction compared to the total number of existing bitcoins" with each block compared to the previous one.
eldentyrell
CC BY-SA 3.0
2011-09-28T18:29:34.353Z
Of course. You could make an argument that even if the block reward was constant, there would be a gradually increasing incentive for miners to push to raise it. (Assuming the value of the currency wasn't increasing.)
David Schwartz
CC BY-SA 3.0
2011-09-27T23:01:35.727Z
2011-09-27T23:01:35.727Z
David Schwartz
<p>It's not just about the miners, it is also about people using bitcoin. If miners decide to fork the chain and keep block bounty at 50btc, they cannot use those bitcoins in any place where people have not also modified their non-mining bitcoin client. Protocol changes are not just about >50% of miners, but about >50% of user clients. </p>

<p>In this case, since users do not have any incentive to modify their clients to treat the new fork as legitimate, rather than the original rules fork, any miner that decides to spend his resources mining the new "50 btc forever" fork is just going to be wasting time, since he will not be able to spend his coins anywhere; they'll be rejected as illegitimate by users, merchants, exchanges, etc.</p>

CC BY-SA 3.0
2011-09-28T04:47:32.717Z
I beleive not just their 50 btc will be rejected, but their entire fork of the blockchain those miners are using would be rejected...exposing those miners to potential losses of usable blocks they could have been mining at 25 btc.
osmosis
CC BY-SA 3.0
2011-09-28T18:30:24.517Z
Good answer nanotube.  There's still the problem of users jumping ship when the hashrate plunges -- if enough miners switched the difficulty on the unmodified side of the fork would take a *long* time to come down to a reasonable level, and the network would become unusable in the meantime (days to get even 1 confirmation and months until the first difficulty drop).  This **actually happened to NameCoin** so it's not just a theoretical problem.
eldentyrell
CC BY-SA 3.0
2012-01-15T08:55:56.757Z
A similar question was asked over here, and it seems a completely different answer was arrived at, http://bitcoin.stackexchange.com/questions/1207/what-happens-if-the-developers-make-a-controversial-change-to-the-standard-cli
osmosis
CC BY-SA 3.0
2011-09-27T20:53:30.537Z
2011-09-27T20:53:30.537Z
nanotube
<p>There has been some concern about the fact that transaction fees (in their current form) are not an adequate replacement for the current 50BTC block reward.  Gavin <a href="https://bitcointalk.org/index.php?topic=41345.msg507159#msg507159" rel="nofollow noreferrer">has said</a> as much, as have others.  The issues of incentive misalignment are described in <a href="https://bitcoin.stackexchange.com/questions/876/how-much-will-transaction-fees-eventually-be/895#895">other threads</a>.</p>

<p>I'm curious: as the 50BTC->25BTC block reward reduction approaches, there is a strong incentive for the miners to modify their clients to simply ignore this rule, continue producing 50BTC-reward-blocks, and ignore any blocks which try to reduce the reward.  It requires changing only a single line of code!</p>

<p><strong>It is in the best interest of every miner to do this, and the miners decide what winds up in the block chain.  Therefore, I suspect that it might actually happen.  Is there reason to believe otherwise?</strong></p>

<p>Obviously if more than half the miners agree, they can change any aspect of the bitcoin protocol.  But this is a bit different: <em>it's easier to get a bunch of people to agree to <strong>not</strong> make a scheduled change in the protocol than to make a new change</em>.  It's also easier to do this if omitting the scheduled change is in all the miners' best interest.  So I think that eliminating the reward reduction is a lot more likely than any other protocol modification.  <strong>"Oops, I forgot to reduce the reward I pay myself!"</strong>  It's also less likely to produce panicked "OMG they changed the rules of the game" and a crash in the BTC exchange rate, since <em>what's really happening here is less change, not more</em>.</p>

<p><em>Additional note: although pooled mining makes it easier for this to happen, no "agreement between pools" or collusion is actually needed.  Think of it this way: the block that is supposed to reduce the reward to 25BTC is very likely to be a forking point in the blockchain.  Every miner will decide for him/herself which side of the fork to work on.  The fact that there is more reward on the non-reduced side of the fork means that a rational miner will choose that side.  The fact that more miners work on that fork means it will ultimately become the "real" blockchain.</em></p>

CC BY-SA 3.0
2011-09-27T19:55:11.973Z
They can create as big a fork as they want--it won't become the "real" blockchain unless it's valued higher in the markets.  Greater numerical bitcoins doesn't mean much if they're worth pennies on the dollar.  They'd need to convince users to switch en masse as well.
eMansipater
CC BY-SA 3.0
2011-09-27T20:52:35.257Z
This question needs to be reworked.  As it stands, it's just an invitation for discussion, which doesn't belong on Stack Exchange.  Generally questions of the form "BIG PROBLEM amirite?" aren't very useful.
xyz
CC BY-SA 3.0
2011-09-28T15:42:39.303Z
Agreed.  Voting to close.  If the question is improved we can simply re-open.
eMansipater
<mining-reward><majority-attack><reward-schedule><mining-theory>
Do miners have both the incentive and ability to keep the reward at 50BTC?
eldentyrell
# Do miners have both the incentive and ability to keep the reward at 50BTC?

(Asked by: username_0 on 2011-09-27)

There has been some concern about the fact that transaction fees (in their current form) are not an adequate replacement for the current 50BTC block reward. Gavin [has said](https://bitcointalk.org/index.php?topic=41345.msg507159#msg507159) as much, as have others. The issues of incentive misalignment are described in [other threads](https://bitcoin.stackexchange.com/questions/876/how-much-will-transaction-fees-eventually-be/895#895).

I'm curious: as the 50BTC->25BTC block reward reduction approaches, there is a strong incentive for the miners to modify their clients to simply ignore this rule, continue producing 50BTC-reward-blocks, and ignore any blocks which try to reduce the reward. It requires changing only a single line of code!

**It is in the best interest of every miner to do this, and the miners decide what winds up in the block chain. Therefore, I suspect that it might actually happen. Is there reason to believe otherwise?**

Obviously if more than half the miners agree, they can change any aspect of the bitcoin protocol. But this is a bit different: *it's easier to get a bunch of people to agree to **not** make a scheduled change in the protocol than to make a new change*. It's also easier to do this if omitting the scheduled change is in all the miners' best interest. So I think that eliminating the reward reduction is a lot more likely than any other protocol modification. **"Oops, I forgot to reduce the reward I pay myself!"** It's also less likely to produce panicked "OMG they changed the rules of the game" and a crash in the BTC exchange rate, since *what's really happening here is less change, not more*.

*Additional note: although pooled mining makes it easier for this to happen, no "agreement between pools" or collusion is actually needed. Think of it this way: the block that is supposed to reduce the reward to 25BTC is very likely to be a forking point in the blockchain. Every miner will decide for him/herself which side of the fork to work on. The fact that there is more reward on the non-reduced side of the fork means that a rational miner will choose that side. The fact that more miners work on that fork means it will ultimately become the "real" blockchain.*

**Tags:** mining-reward, majority-attack, reward-schedule, mining-theory

> **Comments:**
> **username_1**: They can create as big a fork as they want--it won't become the "real" blockchain unless it's valued higher in the markets.  Greater numerical bitcoins doesn't mean much if they're worth pennies on the dollar.  They'd need to convince users to switch en masse as well.  
> **username_2**: This question needs to be reworked.  As it stands, it's just an invitation for discussion, which doesn't belong on Stack Exchange.  Generally questions of the form "BIG PROBLEM amirite?" aren't very useful.  
> **username_1**: Agreed.  Voting to close.  If the question is improved we can simply re-open.  

---

## 3 answers

### Answer by username_6 on 2011-09-27. Score: 16 | Accepted answer

It's not just about the miners, it is also about people using bitcoin. If miners decide to fork the chain and keep block bounty at 50btc, they cannot use those bitcoins in any place where people have not also modified their non-mining bitcoin client. Protocol changes are not just about >50% of miners, but about >50% of user clients.

In this case, since users do not have any incentive to modify their clients to treat the new fork as legitimate, rather than the original rules fork, any miner that decides to spend his resources mining the new "50 btc forever" fork is just going to be wasting time, since he will not be able to spend his coins anywhere; they'll be rejected as illegitimate by users, merchants, exchanges, etc.

> **Comments:**
> **username_7**: I beleive not just their 50 btc will be rejected, but their entire fork of the blockchain those miners are using would be rejected...exposing those miners to potential losses of usable blocks they could have been mining at 25 btc.  
> **username_0**: Good answer username_6.  There's still the problem of users jumping ship when the hashrate plunges -- if enough miners switched the difficulty on the unmodified side of the fork would take a *long* time to come down to a reasonable level, and the network would become unusable in the meantime (days to get even 1 confirmation and months until the first difficulty drop).  This **actually happened to NameCoin** so it's not just a theoretical problem.  
> **username_7**: A similar question was asked over here, and it seems a completely different answer was arrived at, http://bitcoin.stackexchange.com/questions/1207/what-happens-if-the-developers-make-a-controversial-change-to-the-standard-cli  

---

### Answer by username_3 on 2012-01-23. Score: 1

Who's going to continue to value Bitcoin if the supply inflates forever? Any miner that does this is shooting himself in the foot. Feel free though.


---

### Answer by username_4 on 2011-09-27. Score: 1

I don't think it would happen. If the market didn't go along with the miners, the Bitcoins they mine would be worthless. Meanwhile, the difficulty on the original chain would drop, increasing its profitability.

This might be a more realistic fear when the reward starts to drop more catastrophically in the future. But it's hard to predict what would happen then because we really don't know what the usage of Bitcoin will be like then.

> **Comments:**
> **username_5**: How is a 50% drop in the reward less catastrophic now than a 50% drop later?  
> **username_4**: Two reasons: First, the reward will eventually drop to zero. Second, the reward will become a lower and lower fraction compared to the total number of existing Bitcoins.  
> **username_0**: @username_4, it's worth noting that even if the block reward were never reduced, the reward would still "be a lower fraction compared to the total number of existing bitcoins" with each block compared to the previous one.  
> **username_4**: Of course. You could make an argument that even if the block reward was constant, there would be a gradually increasing incentive for miners to push to raise it. (Assuming the value of the currency wasn't increasing.)  

---

