Author: Dr Adam Back 2015-10-07 09:45:24
Published on: 2015-10-07T09:45:24+00:00
The discussion revolves around the possibility of extension blocks or sidechains allowing a soft-fork increase in the total number of Bitcoins. It is believed that the main chain still enforces the 21 million coin cap, hence any given extension block could go fractional, but if there was a run to get out, the last users out will lose, or they'll all take a haircut. Therefore, it is presumed that users would decline to use an extension block with fractional bitcoin. It is also noted that sidechains can be implemented with advertised demurrage, with an entrance fee or exit fee to discourage holding outside of the chain to avoid demurrage. It has been clarified that a soft fork won't cause a non-upgraded full node to start accepting blocks that create more subsidy than is valid, and Adam Back's extension blocks proposal would allow for a soft forking change that creates more subsidy than is valid by hiding one block inside another. However, this would turn into a hard fork the moment you try to spend an output created in one of these extension blocks because unupgraded validators will not update the UTXO set accordingly, meaning that those new TXOs can't be spent because, according to their rules, they don't exist.
Updated on: 2023-06-10T23:58:57.225831+00:00