Except the "small group controlling 90%" of mining power that introduced that change (in the hypothetical example) would use it. And their chain would grow longer and be the canonical one (though that, of course, is also just a convention encoded in the code). And they could still spend some 20% or so of their hash power to entirely mess up the one true chain, if they so desired.
The history of the bitcoin blockchain can't be changed unless a miner can contribute the same amount of work it took to generate the section of blockchain they'd wish to change (so from a historical start block to the latest block). Even then, the most they can do is undo payments and double spend coins. This would probably not be economically viable since Bitcoin clients would probably start to blacklist expenditures from the miners addresses if suspicions of a double spend attack arose. Because wallets and nodes can tell when there's forks, people would also pick up on double spends which would disqualify any and all money attempted for the double spend. Overall it would probably be cheaper to just spend coins fairly.
Also, as an aside, the protocol-valid bitcoin blockchain with the most work gets chosen, not the longest* blockchain
You would need to control the majority (of the important) nodes to be able to pull this off. If the nodes are incentivised to keep the limit, they will.
Not quite. The only people bitten by inflation in the long run are those who stockpile cash and intend to perpetually live off capital gains without contributing anything to society. Meanwhile, the vast majority, which are either salaried employees or own businesses, see both their income and expenditures adjusted to inflation.
This is in fact one of the often ignored aspects of inflation, as well as taxes: a way to mitigate or avoid concentrations of wealth detrimental to society.
This is completely missing the point. People with big amounts of cash never keep it, they invest in something to avoid inflation. The only people who suffer are poor people who happen to have a small amount of USD saved for a rainy day.
As somebody living in Argentina, a country with usual double digit inflation, your argument is complete bullshit.
Here the wealthy are not affected by inflation: they can save in real state, strong currencies, shares... And the same rich families stay rich for generations. We also have very high taxes.
Inflation harms the poor more than the rich. Try living in Argentina for some years and you will learn.
The only bullshit I spot is this idea to use Argentina, or Zimbabwe or Venezuela, as the posterchild of responsible monetary and economic policies, when they are actually the result of gross and perpetual mismanagement.
https://www.wsj.com/articles/why-argentina-faces-an-economic...
Meanwhile most of the world reaps the benefits of sane and responsible monetary policies, and thus is free from hyperinflation, and somehow that's supposed to mean nothing? Only your cherry-picked appeals to emotion matter?
Even the European Union, which has been subjected to quantitative easing policies from around a whole decade and thus has been seeing their central banks print money like crazy, at most only complains about low inflation and mild economic stagnation.
The part with print money like crazy is absolutely true. The claim that there's low inflation in Europe, is absolutely false. Official inflation numbers are relatively low only because real estate and other things are arbitrarily excluded from cpi. It's always astounding to me how people can pretend as if rising real estate prices did somehow not trickle down to rents and thus effectively all everyday purchases, people make.
The world is full of zero-sum games whose existence people often deny ... just because many of them are long and complex and interconnected chains of interactions which means they are lots of work to describe accurately doesn't mean they're not there.
What about your idea regarding inflation as a way to avoid concentrations of wealth? (the idea I quoted and I replied to). That one is unsustainable.
When inflation is present, but less than 3%, there isn't an incentive to hoard it, because simply sticking it in a bank account means it will be slightly less valuable a year from now than it is today. For poor people, who are spending most of their money on necessities, it won't mean much (unless their employers don't match incomes with inflation, which IS a problem). But for rich people, it offers a powerful incentive to spend today, or to invest their money with hopes that the returns will offset the inflation. A rich person's money flowing through the economy, be it through exchange for goods, or through investment, is far more valuable to society than it is sitting under their mattress.
Debts are also easier to pay off. With inflation, your debt of $X is easier to pay off in the future than it is today. Poor people struggle to pay off debt more than rich people, and governments are more likely to rack up debts to pay for public works and infrastructure, knowing the bill will be easier to pay down the line with inflation.
Compare that to deflation. With deflation, your money gets more valuable over time, not because you invested it in something useful, but simply because it exists. Now if you are rich, why do anything at all with your money other than stick it under a mattress? Why spend it, or take the risks that come with investment, when you are guaranteed it will be worth more than you have now in the future? Poor people don't have this luxury. They have to spend money on their needs today, which means they are missing out on even more value tomorrow.
Deflation is just as toxic to the economy, and especially poor people, as hyperinflation.
The way I see this, there's a fallacy there.
The claim, that inflation won't matter much for poor people is wrong. Even if their employers compensate for inflation with accordingly increased salary (which they don't always do) then there's still the fact that poor people are treading their treadmill, unable to advance one bit. In the best case they stay right where they are (relative to others).
Rich people on the other hand have the "burden" of sitting on assets that do not suffer inflation. And any excess money they earn which they don't need to spend on everyday items, they can put into investments that again do not lose value like cash does (under inflationary circumstances).
Quite simple: rich people have opportunities to invest and earn profits, letting them improve their position relative to poor people even further. Poor people don't have these opportunities and they even have to constantly fight for compensation of inflation while having shorter levers to push everywhere in society.
If rich people weren't urged to invest money they have sitting around (by threat of inflation), they'd maybe just hoard bigger proportions of it and sometimes spend some, instead of using it to acquire ever increasing proportions of assets from poorer people who have to sell. I'd say inflation almost directly causes wealth concentration.
In this way, inflation does indeed mean much for poor people. No, it's not totally obvious, kind of counterintuitive even. But it's true.
The current development is like a continuously happending race along a path of steadily increasing availability of pleasant goods and opportunities ... where the rich are moving significantly faster along the path than the poor. Yes, the poor do advance, but the lead of the rich continually grows larger. Since wealth is psychologically very much a relative thing, this is bad, even if the absolute wealth of the poor is indeed increasing over time.
mainly the referenced links
You're free to discuss the facts I've pointed out, instead of going off on a tangent with a non-sequitur regarding Argentina's hyperinflation. It's undeniable that stockpiling cash out of the economy has a deeply negative social, economic, and even fiscal impact on a nation. Inflation provides an incentive to actually put the money to use, and interest rates for the most conservative investments, like risk-free bonds, are then used to provide incentives to couple investments with economic cycles.
As a counterargument I said that rich people don't save in cash and that inflation damages the poor more than the rich, the world bank has evidence for that: https://openknowledge.worldbank.org/bitstream/handle/10986/1...
> Inflation provides an incentive to actually put the money to use,
Inflation provides an incentive to get rid of the money that loses its value over time and instead change it for something else. This not only affects the rich, but also the poor. An effect is that it becomes more difficult for the poor to save and invest. The rich can handle inflation much better than the poor.
I found another article that arguments about this https://mises.org/library/whats-so-scary-about-deflation
The US, unlike Argentina, hasn't spent over a decade experiencing with a >10% inflation rate, and half a decade at >25%.
Most of the world hasn't.
Until it does, any comparison with Argentina, or any country experiencing years of hyperinflation as a result of gross mismanagement, is overwhelmingly positive.
I appreciate a good appeal to pity, but unfortunately you got it completely wrong. Even though pension funds use investments to complement their investment pool, they are primarily funded through contributions from the employer and existing members as an income redistribution scheme[1].
No, you trust the 50 miners that control the majority of the hash power not to mess with the code that embodies your math (or doesn't, as the case may be).