Who controls Bitcoin?

  1. Users- Users use Bitcoin to transfer/store value. Users are most concerned with storing their money securely. Users can also be viewed as customers of Bitcoin businesses such as exchanges
  2. Miners- Miners invest in ASIC/GPU chips and direct this hashpower to validate transactions by incorporating them into blocks. They secure the network through adding PoW to the chain
  3. Businesses and Investors- Businesses such as Exchanges and wallets are built over bitcoin and enable customers to use Bitcoin and build other features over it. Investors such as Union Square Ventures invest in these businesses.
  4. Developers- Developers can work on improving the underlying Bitcoin protocol such as Gavin Andresen. Developers can work for Businesses that are built over Bitcoin such as OpenBazaar, and developers can also create their own protocol such as Monero.

Hard forks are the consensus mechanism for Bitcoin

Why is it that miners have such power over the network?

The reason is simple, Bitcoin’s protocol is built over Proof of Work where miners vote with CPU power. If someone wants to use a protocol where 1 user = 1 vote, they should move to other projects such as Tezos which use Delegated proof of stake for governance where each user votes on the future of the protocol. But in Bitcoin, users will never get a vote.

Peter Rizun from Bitcoin Unlimited on r/btc

Miners profits come from Bitcoin’s usage

Miners are investing this money not from the goodwill of their heart but to profit from the network. Miners are profit seeking capitalists and that is good. Miners compete with each other to include more transactions in a block and the ones who can do it most profitably gain the most. The fees is set by the market without any artificial limits by competition. Miners profit by increasing usage of Bitcoin. By increasing the total pie of Bitcoin transactions. More the people who use Bitcoin, more the miners profit. More the use cases such as gambling, colored coins, payments, remittance, more the volume of transactions.

Users shouldn’t care about the protocol

Exchanges/Businesses/Investors/Users should not care about the underlying protocol. They should assume that it all works and continue to build over it. Miners know what’s best for their business. Because it’s their money that goes down the drain if Bitcoin doesn’t get users. Substantially more than mine and yours.



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