Post
Topic
Board Beginners & Help
Re: Who controls bitcoin?
by
Quick
on 08/04/2013, 04:49:59 UTC
A lot of responses about changes seem to use the logic of "the majority will do or will not do this because they are driven by motives x, y & z"

But there is a couple of issues with this argument.

1. Don't trust the majority, even if you think you understand their motivation. The majority can be wrong, and they can be manipulated. Take US politics for example: The majority vote for more and more deficit spending even though it is not good for the country in the long run. The majority have gotten the US into an unsurmountable amount of debt. Likewise, the majority of bitcoin users could be fooled into accepting a change that would hurt the currency in the long run. (Like eliminating the true scarcity by removing the 21 million cap)

2. Correct me if I am wrong, but it is not the majority of bitcoin users that need to except the changes. Rather, a majority of miners. If bitcoin grows to be a commonly used currency, the miners will make up a small fraction of the total users. So when we are talking about the majority, we really mean the majority of a small subset. The problem with this is that the miners may have a different perspective on certain proposed changes. For example, it is reasonable that many of the miners would support fixing the solution reward at some number of bitcoins instead of having it trail off to zero. This would be more profitable for the miners. Logically, the normal users would be against this, but reference point one above. The normal users could be convinced through misinformation that this is a good solution.  Those that stand to benefit could argue that the supply of bitcoins needs to increase to help the economy move along, or to make transactions easier, or any other lie they can come up with to convince the majority. This is not unprecedented in history.

Take for example the countless countries that have moved their currencies off the gold standard. In this example, the politicians are the miners and the citizens are the normal bitcoin users. A majority of the politicians get to determine the outcome. And moving off the gold standard is analogous to eliminating the 21 million cap. The politicians stand to benefit because they get to delay dealing with a problem. The politicians convince a large subset of the citizens that this is the right move to make so that the citizens don't start and uprising. See how this is the same?