What prevents them from abusing it?
· Originally published on Reddit
During the paranoid saturday thread I posted this scenario and the more I think about it, the more I believe it's inevitable to happen sometime in the future.
Suppose bitcoin achieves the most optimist scenario where its an essential part of the modern world economy, used for trade worldwide and seen as something that's not going away ever. In this scenario, each bitcoin is worth a lot and mining equipment is very expensive, mostly owned by people who are in for the money — maybe they're banks, corporations or just individuals but what matters is that the pure idealists are the minority.
Now there's a schedule block reward halving coming up. Then someone finds some flaw with that: maybe its technical, maybe it's an economic argument, what matters is that, like the Y2K or bank bailouts, its very hard to actually know how big a problem it will be until it actually happens. There's a chance it's a non issue, but there's also a chance that it will be a problem and then the whole system will be crumbling down and we can't afford that risk now can we? Bitcoin will be too big to fail.
Many heated arguments are held but you know that saying: "it's hard to make someone understand something when their paycheck depends on him not understanding it".. In the end most miners have an economic incentive to believe the issue is real: after all this hipotethical issue is not completely made up, there's some nugget of true.. More than half then agree on postponing the block reward halving until the issue is addressed. They're not creating more money, just buying some time.
But then that temporary thing becomes permanent because no one wants to halve their paycheck voluntarily. And sudennly bitcoins are expected to go over the 21 million limit. People complain but since most of the complainers holds bitcoins they don't want for everything to crash..
Once the cat is out, no one can tell what happens next. Maybe the block reward goes up. Maybe the block rewards gets permanent. Who gets to decide it? The same people who profit from it.
TLDR: At some point miners will have the power to rule over their own rewards. What prevents them from abusing it?