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Who controls bitcoin?

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Avatar for Edzuxx
Written by   54
6 months ago

Who is the leader of bitcoin? The answer is one word: no one! Bitcoin does not belong to anyone. It is not an organization. It is neither a business nor a product. There is no hierarchy, no bureaucracy, no supervisory body. This is the "magic" of bitcoin. It has managed to create digital rarity, without requiring any central authority to oversee its maintenance.

All of these structures have been replaced by a network. It is a standard or protocol such as TCP / IP or the Internet. It does not operate under any human law except by mathematical rules, which everyone who participates in the network must obey.

No group of people or management has the power to control, stop or restrict anyone from entering the system. Either as a producer or as a trader. Bitcoin is voluntary, so no one is required to use it, but those who want to join the network must play by its rules.

At any time, anyone who wishes can join, without getting permission from anyone. As freely as anyone wants to leave. It does not force anyone to become a user, nor does it prevent anyone from producing bitcoin themselves. It is enough to follow the rules pre-determined by his birth.

The only option available is to use it as is or not to use it. The parameters of bitcoin are similar to the rotation of the earth, the properties of the sun, gravity. Forces beyond our control, that if we want to live, we must accept them and reconcile with their rules.

But how is that possible? After we have learned that behind every currency there is a state, the Central Bank. Some beginning! How are decisions made?

From all participants. If some people disagree with the way it works and want to change some of its basic principles, that is no reason to disagree or disagree. Nor should the so-called golden section be found. You don't have to force someone to choose between A or B or an intermediate one. You can also have A, B or whatever you want. It sounds crazy (and it's not the only thing that sounds like it), but that's what bitcoin does. It is upgrading the democratic process to the highest level.

One way to understand its function is to imagine it as an automated social contract. Anyone can persuade the rest of the network to adopt the changes they want in the protocol. If some people want to come up with something out of the ordinary, then they have to re-think their position. How; To build their own network. A fork. Fork is divided into soft fork and hard fork. Soft fork is a "simple" upgrade, such as repairing a bug. Hundreds of computer developers from around the world have volunteered their time to upgrade node software and in the process improve the capabilities of individual nodes.

Hard fork is something that changes fundamental elements in the structure and causes the chain to break down. In each hard fork a new chain is created, while at the same time the old one continues to exist. In the old network no one has the right to change the rules. So you can be sure that they will continue to apply. However, anyone who wants to follow the news is free.

For example, the basic rule of bitcoin is to have a monetary limit of 21 million. If I don't like this rule and want to make it 210 million, I'll make Vasilis Coin. It's my right. Why does the name change? Because now we are talking about a different currency. If such a fundamental change takes place, it will no longer be bitcoin but something else. Here is the difficulty. I need to be convinced of the benefits that my proposal will bring. Without users, the best financial system in the world is useless. It won't be worth it if I convince them that Vasilis Coin is better and they will follow me.

So there is a possibility that monetary policy will change. Why was it mentioned at the beginning that it is impossible? Because no one is stupid enough to want bitcoin to be inflated. If they followed my idea, it would automatically mean that the currencies in their possession would be worth 1/10 of their value. Even if some insane people go against their own interests or are malicious who seek to devalue bitcoin, it is impossible for them to gain the necessary critical size to impose their point of view. The "members" are now hundreds of thousands, scattered all over the world. It is practically impossible for there to be a simultaneous, coordinated shift of people. They speak different languages, have different interests, different cultures.

The main problem with following a Fork is that the only way to help it succeed is to put your coins in the old chain. However, who would want to take the risk of losing their currencies to move to the new network? This is only beneficial if the vast majority are willing to move there. The fate of Bitcoin Cash is a vivid illustration of the problems when a Fork does not enjoy consensual support. Because the majority chose to stay in the original chain, the value of bitcoin is much higher than that of Bitcoin Cash.

Those who vote are the nodes. Imagine them as the parliamentary power and the miners as the executive. It is the nodes that ensure the decentralization of the network. It's not the code that makes bitcoin so special. Ideas may be better in other digital currencies. The code allows but not the property. Without the tens of thousands of scattered nodes, it would be another centralized system, while without the computing power of the miners, it would be sensitive and vulnerable to attack. These are the comparative advantage of bitcoin.

It would be tempting to say here that node operators control bitcoin and this applies collectively in an abstract way. More realistically, node operators can only control their own nodes and decide for themselves which network rules should be included and which transactions they consider valid or invalid. Each individual node is unable to force other nodes to change their code. Only because of this steady balance can bitcoin be considered hard money. If Bitcoin deviates from these rules of consensus, its value proposition as hard money would be seriously jeopardized.

That is why it is extremely difficult to have another bitcoin. For the same reason that we only have one Internet, only one e-mail. Any device that sends emails must use the IMAP / POP3 protocol to receive emails and the SMTP protocol to send it. Many other protocols (perhaps better) were invented and could be used, but almost no one uses them. Why; Because this would preclude users from interacting with almost everyone who uses e-mail today, because they are on IMAP / POP3 and SMTP.

The only changes that have taken place so far are functional changes that allow the network to operate more efficiently, but not changes that change the essence of its operation.

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Written by   54
6 months ago
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