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What is the exact procedure for creating more Ripple currency units (XRP) in excess of the default 100 billion that already exist?

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There is no such procedure. While OpenCoin could accomplish it today by changing the code to create such a thing, in the future, the procedure would be as follows:

  1. Propose some kind of change that would create more XRP.

  2. Assign it a 256-bit ID. (It can be arbitrary.)

  3. Release patches that support this change, and announce their support for this ID.

  4. Get 80% of validators to run your patches.

  5. Wait out the two week waiting period for new feature enablement (to give a chance for review and vetoing).

  6. If 80% of validators (weighted by trust) still run your patch, the feature will enable itself and then you can create more XRP. Alternatively, you could try to convince about 50% of validators (weighted by trust) that your patch is so urgently needed that the normal supermajority delay process can be bypassed.

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  • "Propose some kind of change that would create more XRP." This is a kind of transaction, right? A special kind of transaction. – Manish Apr 27 '13 at 22:01
  • No, step 1 would to be to suggest it to the community to build a human consensus. Otherwise, step 4 will never happen. – David Schwartz Apr 27 '13 at 23:28
  • Bringing out the tin foil hat now, my favorite part. So a government that controls 50% of the validators could start expanding the money supply. Would this be easy to detect by the other nodes? Could they do anything to stop it? For example, in Bitcoin terms, if there's a new "coinbase," maybe they could reject transactions originating from that coinbase, considering them as fake coins. I don't know ... this is my main concern with the cryptocurrencies. – Manish Apr 27 '13 at 23:47
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    It would be trivial to detect. If they announced it as a proper change, everyone would know when it was properly enabled. If they did it secretly, the other 49% of the network would be unable to ever agree with them because the XRP levels would disagree. Plus, there's the total amount of XRP field in the ledger. You can trivially count the XRP in the ledger and compare (I do that regularly). And if any XRP "moved" there'd be a signed ledger with the before, a signed ledger with the after, and no transaction to justify it. – David Schwartz Apr 27 '13 at 23:52
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    Right, just like a 51% attack on Bitcoin. Except people could just stop using the compromised validators. So the manual recovery process would be simple. (It may even be possible to automate this process when it's clear which side is objectively wrong. The more insidious threat, if the aim is to disrupt the network, is to try to disrupt consensus without being so blatant.) – David Schwartz Apr 28 '13 at 0:05

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