Say the first n blocks on the block chain were mined by the creator of the currency. What's to stop everyone unanimously deciding to ignore those first n blocks at a later date and therefore "bankrupting" the creator. Obviously agreement between a large number of parties to do this is unlikely in practice, but is there anything theoretical that prevents this?


No, nothing stops it. The rules of the currency are whatever people decide they are. If there is unanimous agreement on a change - that is, if all users adopt a patch implementing different rules - then the change happens.

Obviously this would be a bit strange if some of those coins had already been spent - they might have changed hands many times and now be held by many different people, who would be punished by such a rule. But still, if everyone adopts the patch, that's what happens.

Such a change might also shake the market's confidence in the currency. An investor might think "The vengeful community turned on this one guy and wiped out his funds. What if they turn on me next? I better dump all my holdings right now, before that happens." If enough people think that way, the value of the currency crashes.

If there is only partial agreement - some adopt the patch and others don't - then the currency forks. Some people would accept coins that originated with those first n blocks, and others wouldn't. This situation can be very confusing if you are trying to buy something from a merchant, but they follow different rules than you do; your money might or might not be accepted. Previous forks (e.g. Bitcoin Cash) have been relatively orderly because both sides were willing to go their separate and independent ways, and make it clear that they were two separate currencies. (I did say "relatively orderly"; if you browse this site, you'll see lots of "halp I sent BTC to a BCH address" posts showing it hasn't been trouble-free for everyone.) If both sides insisted that they were "the one true Bitcoin", it would be much more chaotic.

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