Explaining Bitcoin governance is one of the hardest things to do.
While Bitcoin has no traditional governance model, it certainly has a lot of checks and balances to ensure that it functions.
I’ve already touched on this in an earlier article, so in this article, I am going to do a little thought experiment with you to shed some light on the position of miners and you yourself in the Bitcoin network.
Are Miners in charge of Bitcoin?
The answer to that question must be a resounding “NO”, I am afraid.
While it is true that miners are tasked with creating blocks for the blockchain (competing for that privilege!), it is not true that they are the end arbiters of what features the Bitcoin blockchain has.
There’s a simple way to show why this is not the case.
The Bitcoin network’s primary function is to ensure the history of transactions remains intact and is trustworthy.
It does this by ensuring that “honest” nodes are in control of the network. Honest nodes are not explicitly defined, but are mirrored with “attacking” nodes, which can lead us to define them as “non-attacking” nodes.
Nodes are also computers. They are not defined as the human actors we also call “Miners”. We need to keep these two entities separate as massive confusion stems from casual mixing these two in everyday speech.
Nodes will always consider the “chain with the most cumulative Proof-of-Work” to be the valid chain to follow.
Does this therefore mean that Miners who create the longest chain with the most cumulative PoW define what Bitcoin is?
Again, no.
Consider the following scenario:
A group of Miners (or one Miner, doesn’t matter) has control over more than 51% of the hash power.
It decides to implement a version of Bitcoin in which history is altered in a way that benefits them. This chain eventually becomes the “longest chain with the most cumulative PoW”. All nodes will recognise this chain as the valid chain.
Question: is the this version Bitcoin or not?
The answer is that if we strictly go by what the node software tells us, it is.
However, instinctively most of us (I am guessing and assuming here) will feel this is not the case.
The chain that gained a majority has actually just violates exactly that what made Bitcoin what it is, so how could it be Bitcoin?
One likely scenario that would follow is that most users would start to ignore the “attacking” chain, regardless of whether it was the “chain with the most cumulative PoW”. And for good reason: they would have no benefit to using that chain, at all.
The minority chain would be adopted at the “true” Bitcoin and go on from there.
The above scenario is one where it was clear cut who was an attacker. However, the same logic can be followed for forks, too. Miners are free to back whichever fork they like. However, they are not and cannot be the only arbiters here. Miners that are clearly going against user incentives will not be able to force them to use it and thus will also not be able to claim to mine the “true Bitcoin”.
So who is in charge?
This is the wrong question. It’s based on the traditional model where one person or a group decides for the majority.
The question makes sense in that context, but not in the context of a network where ALL actors have shared influence.
That doesn’t mean that at stages a person or group couldn’t be making a lot of decisions that are accepted by the majority. But that’s something completely different from a person or group making decisions on behalf of the majority.
Truth is, everyone involved in the Bitcoin network is responsible for its integrity.
That is often misunderstood as everyone being active in sharing this responsibility. Of course, that is not true.
Everything in Bitcoin is opt-in: you can get involved, even as a “normal” user. You can also opt to outsource your influence, but that comes at a cost: others may make decisions on your behalf that won’t benefit you.