Quote from: theymos on February 25, 2011, 01:24:06 AM

The transactions that generate coins illegally will always be considered invalid by you, even if you are the only node in the network that believes this. If a change to generation rules becomes overwhelmingly popular, then it might reduce the value of your coins to nothing. The system will still work for you, but your coins won't have any conversion value.

This isn't going to happen overnight. If a new Bitcoin-like system continues to generate 50 BTC for every block after 210,000, then half or more of the market will be "old BTC", and half will be "new BTC". There will be an exchange rate between them. Probably "old BTC" will not die easily.

There is no technical way for a full network node to be tricked into accepting an illegal generation. It's clearly invalid.

theymos is right on the money. But since I don't know your level of technical familiarity, feel free to let me know if this still confuses you. Basically, your bitcoin client won't accept any deviation from the "hardwired" rules even if every other person out there switches--you will be the only person still using Bitcoin Original but it will still work perfectly. And importantly, if Bitcoin 2.0 ended up in the toilet because of the injudicious expansion, people would still be able to rejoin Bitcoin Original and spend their coins from before the switch as if nothing happened. This is the biggest reason that a network-wide change would be pretty much all or nothing: the situation of competing protocols is pretty unstable.

More broadly, since currencies are a medium of exchange between parties the concept of being subject to the will of everyone else is unavoidable: if everybody else on the planet starts treating the USD like toilet paper, your millions under your mattress won't mean what they used to. The main difference between bitcoin and USD is that the federal reserve can print official USD whenever they want to, and banks can 'create' USD through fractional reserve systems. Bitcoin Original, by contrast, will never change even if there is only one person left in the world using it.

It's also informative to look at this from the perspective of the person starting up Bitcoin 2.0 because they are basically starting a new currency and giving people starting credit based on how many Bitcoins they (continue to) hold. Why would they do that? Unless there is reasonable assurance that everyone will switch to the new software (like in the case of adding decimal places) it is going to be one huge debacle. Most businesses/investors are never going to switch to Bitcoin 2.0 just because it hands out free money. And anyone who accepts Bitcoin 2.0 would be a fool. If you don't believe this, you could start a Bitcoin 2.0 version and see what happens (I'm sure you're too smart for that, but it's a helpful thought experiment). A much more realistic idea for a Bitcoin 2.0 would be that the person would make you hand over your Bitcoins to get the new Bitcoins, and base them on their own blockchain instead of just trying to update Bitcoin itself. Then, like theymos pointed out, the two will exist side by side and could be traded between.

Bringing it back to basics, just think of it like currencies. You could get everyone to stop using the currency they use and start using a new one, like Brazil did with the Real, but you would have to have a very good reason and the endorsement of some major authority figures for the whole economy to switch over.

We do have a historical precedent of how the community tends to respond: in block 74638, or alternatively on August 15, 2010, someone exploited a loophole in the then-current client to give themselves 184 billion bitcoins. An update to the Bitcoin software was immediately created that deleted that block and corrected the blockchain while including all other legitimate transactions (the cryptographic security of bitcoin makes it easy to keep valid transactions in these scenarios), and that new version of software was released to the public. The majority of the nodes switched immediately for obvious reasons, and the fixed blockchain overtook the compromised one at block 74691 (very quickly). This is also an excellent demonstration of why simply trusting the most computationally intensive blockchain is a safe move--once a clear majority of computing power has switched that blockchain will always win out to become the most secure record. And even in the midst of this commotion an attacker with more computational power than the whole network couldn't have spent other people's coins or altered their transactions. It also demonstrates how Bitcoin's nature allows anyone connected to the network to hold it accountable. Go jgarzik!

Sincerely,
eMansipater