First a technicality: It does not matter what 51% of the nodes do. Despite common opinion, , bitcoin nodes have very little say in rule enforcement and changes. You know this must be true since you can currently set up a node for less than $25 and run it for less than $1 per month. Additionally, it is not hard to make one physical node look like a huge number of logical nodes to the bitcoin network.
Practically speaking, the rules are set by an interplay between the miners and a few influential participants. If a segment of miners that controlled a significant part of the total hash power on the network implemented a rule change, and a few influential participants (like, say, Coinbase.com) followed along, then the change would effectively become a new bitcoin consensus rule. In fact, according to the current rules about how the rules change, all changes are based solely on votes cast by miners.
So instead I will answer the more general version of your question: "What prevents the bitcoin consensus rules from being updated to allow more than 21 million total coins?"
This is a very interesting question, and it is rarely discussed seriously.
Today, the thing that prevents the coin limit from being modified is: incentives. Miners control the rules, and large miners (actors who control large parts of the hash power) are currently very profitable due to the current combination of (1) the current price of bitcoin, (2) the current cost of mining a bitcoin, and (3) the current block reward. As long as large miners can make excess profits while mining with the current consensus rules (including the 21 million coin limit rule), they will continue to do so.
But miners will only mine when it is profitable to do so, and this fact will eventually create incentives to increase the bitcoin money supply.
Bitcoin users want both low transaction fees and high network security (aka hash power). Today they can have both because block reward massively subidizes mining operations. For example, in the most recent block mined when I wrote this answer, the miner earned $305,000 from the block reward and $155 from transaction fees.
Today we get both low fees and high security because almost all of the costs of mining blocks are paid for by block rewards.
But this will not always be true. The 21 million coin cap - by definition - limits the total number amount of block rewards payable. Each block reward is effectively a one time sale of a limited resource, and the proceeds from each sale are used to pay for hash power.
As we run out of block rewards to pay to miners, either (1) fees will need to rise, or (2) network security will need to go down (or some combination of those). A lot. Really, really a lot.
Realistically this will not happen. A bitcoin network with massively higher fees or massively lower security is not viable. So as fees start to rise and/or security starts to fall, we will eventually reach a point where something has to be fixed. But of course the only possible fix is to increase (or at least mitigate further reductions in) the block reward.
Remember the 21 million coin limit is not a rule itself, it is a result of the of the ever-decreasing block reward. If you increase (or even stop decreasing) the block reward, then you inherently increase the total number of bitcoins that can mined, and you debase the currency.
So that is how it will happen that the 21 million coin absolute limit myth will dissolve. It will make total sense then. There will be a few loud people screaming "but if we raise the limit then we completely destroy the original basis of value of the system!" And they will be right. But no one will care because the only other options will be to massively raise the transaction fees or massively lower the network security, and either one of those options would destroy the value of the system.
Does all this sound familiar? Remember that the number of possible dollars was once limited by a rule (the number of gold atoms available). When that rule was changed, pretty much everyone went along with it for the same reasons as they will when the bitcoin rules are changed. Bitcoin is subject to the same inflationary politics as (almost1) every other currency.
- There is exactly one unit of money that truly has a fixed supply. I'm going to write an article about it soon, so sign up for updates at josh.com.
