On forkability in general, I see it as a great strength, not a weakness. It means that the economic majority is always in control even when major changes have to be made.
As a side note, I find it cumbersome during deeper analysis to think in terms of "Bitcoin." Rather, I think more fluidly in terms of
the economic majority ledger (currently known as the Bitcoin ledger). Forking the protocol is largely powerless* to affect the economic majority ledger, because - by the same logic as in my previous two posts - the new protocol fork only retains control of the economic majority ledger to the extent that the protocol change is compelling to the economic majority.**
Since every differentiated protocol fork (here I mean altcoins) has so far created an entirely new ledger, of course they aren't very compelling to the economic majority, receiving at most tepid investment interest. A
spin-off would be based on the economic majority ledger, so it would have a great advantage over an altledger/altcoin, though if it wasn't compelling it would just be sold off by bitcoin holders for more bitcoins.
If a substantially different protocol fork or spin-off is ever more compelling to the economic majority, and of course using the same ledger is the first requirement for that, it would be adopted. The economic majority retains their ledger with their wealth in all cases. Bitcoin-the-protocol may be no more, but the ledger stays so bitcoin holders have nothing to fear except a re-naming.
Suppose a substantial segment of the economic majority shows interest in some change you find repulsive. Likely many others will agree with you, so in some unlikely scenarios you will potentially have two ledgers form over time.** If this does occur, it's the most amazing form of democracy (not voice democracy, but
exit democracy) because everyone can use the system they want without compromise. However, again, there is a strong tendency to simply converge on ideal money based on the wisdom of (investing) crowds.
For instance, if we suppose a substantial segment of the economic majority shows interest FedCoin, then the legal situation may make it likely that the two coexist, with Bitcoin either on the black market in that country or competing directly with FedCoin. In that case, again, exit-democracy prevails and the Feds have no more tools to corrupt cryptocurrency than they do now (see the arguments in my two previous posts).
Here's another important implication of thinking in terms of the economic majority ledger: Bitcoin issuance is not limited to 21 million coins because of the protocol, but because of the exit-democratic consensus of the economic majority.
It is incorrect to say we have moved from an era of control by central bankers to an era of control by mathematics. We have moved to an era of control by the economic majority.
This is a great advance, but not because "no one" can change the protocol, but because no one can force any group of people to stop using it. To effectively change the coin limit, you have to either convince the economic majority to do so, which is a herculean task, or convince some subset of the economic majority - but then that doesn't affect the rest of the people. That means the coin limit could change (for example, in 50 years to deal with mining incentives), but not without a reason that is so incredibly compelling that it sways all or most of the economic majority - in which case the typical bitcoiner should probably not worry, despite how bad it sounds, because the economic majority has those same reservations to overcome. And also we know that the change wouldn't allow for any net-harmful degree of continuing inflation or other effects, because the wisdom of the economic majority would be behind it.***
This is the kind of guarantee Bitcoin provides; it's essentially a decentralized governance where voice vs. exit is fully exercised at all times. What Bitcoin provides is not a guarantee by code or math, rather code and math are what enforce the "edicts" of this decentralized governance structure subject to the continual pressures of voice and exit backed by investment flows.
If, for example, the economic majority believes that increasing max_blocksize to 20MB or shorter block times or Turing completeness will make the protocol for updating the economic majority ledger more compelling, a fork incorporating these changes would thrive and beat out the Bitcoin Classic protocol.
So to me, all that's required for Bitcoin-the-ledger to survive in perpetuity and make every investor rich is for the protocol to be upgraded if and only if the economic majority deems it truly compelling, with all the prudence about viability that that entails. Forking makes that happen, giving that critical exit option to balance voice, which in Bitcoin is already vastly superior to government democracy voice since it's backed by actual money.
*
So far around 90% powerless, considering the combined market cap of all the altledgers compared to the economic majority ledger (Bitcoin).**
Although some kind of 50/50 or 40/60 split could happen in theory, the incentives involved make it seem unlikely in practice - and even if it does happen (because both forks are highly compelling in their own right), the market can only support a few such splits because there are only so many protocol feature sets to compete on through differentiation.***
If you're skeptical of the wisdom of the economic majority, first realize this is what controls Bitcoin right now, in fact, as is the theme of this post. Secondly realize this is as good as it gets; there is no way to create a system smarter than the economic majority, at least not without centralization (and in my opinion not even then). Third, if you're convinced that prediction markets are a huge deal, this should be appealing for the same reasons. If you're not sold on prediction markets, read the five numbered documents here. Although Truthcoin may be a misguided system, Paul Sztorc's arguments on the importance of prediction markets are impressive.Excellent post, thank you.
As you stated, bitcoin is a more democratic form of money, where the economic majority have a voice and a small group cannot control the system. This is one of the most beautiful aspects of the system. Additionally any minority of users can always choose to stay on the ledger/path they choose.
I think where we differ is in how much confidence to place in the decisions of the economic majority. Your position is that you trust the economic majority will always choose the "right" thing because it is in their self-interest. I believe there is strong historical precedent where the economic majority have both willing selected and been coerced into decisions that are against their own interests, and so I place less confidence in the decisions of the economic majority. I prefer a strong rules based system that is out of the hands of man, and fear anything else will be influenced negatively over time.
Bitcoin issuance is not limited to 21 million coins because of the protocol, but because of the exit-democratic consensus of the economic majority. It is incorrect to say we have moved from an era of control by central bankers to an era of control by mathematics. We have moved to an era of control by the economic majority.
Fully agree that in the end the 21M limit exists because the majority chooses for it to exist, not solely because of the protocol.
Disagree that the limit will remain because the economic majority will protect the limit. If that was true, please explain how they broke the gold standard? The economic majority of physical gold holders were against it, they massively lost out in the default, and yet it still happened. If you look at the history, after the default they were no longer the economic majority (because they were devalued) and no longer had control. The economic majority shifted to the government which could now create wealth out of thin air and have everyone go along "because crisis".
If let's say hypothetically the government declared a fork with 210M coins, they would now control 189M coins, a clear economic majority. They could also convince the majority of people to go along because the government would offer those 189M coins as various "services" to voters.
The economic majority you described, would no longer be a majority and would now be a very small economic minority. This is not a hypothetical, it is history and has already happened. If you walk through the mechanics of the 1933 default it follows the outline above.
Point is, I don't believe a demographic majority want the principles of sound money, and if bitcoin ever takes hold there will be a multitude of attacks. The main protections against this are to have bitcoin be used directly as much as possible (i.e. own wallet, not through circle.com services) and to have forks be rare events making it harder to push regulation/etc into bitcoin. Part of the reason they were able to break the gold standard is people had already stopped using physical gold directly, and mostly only used paper gold, and thus they had no method to resist the changes. If in 1932 people still mostly used physical gold for transactions and not paper gold dollars, I think the 1933 default would have been much more difficult.