Why is Bitcoin Not Democratic

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With Bitcoin not only a digital means of payment was invented, also a new mechanism for the guidance of the society manifests itself in the protocol: the consensus. What is the difference between consensus and democracy? What are the effects on government and society?

The ideal of democracy has moved into the center of society for the past 200 years — democracy as the apotheosis of society. Accordingly, decisions must be taken democratically to claim legitimacy. In other words, the majority subjects the minority to a democratic decision. Democracy is a form of government.

Bitcoin turns the system upside down

At crypto conferences one hears again and again “democratization of X”, as the goal of the digital revolution 2.0. But let us remember: this revolution was launched by Bitcoin — the decentralized peer-to-peer electronic cash system. The fundamental feature of Bitcoin lies in leadership.

At this point, the difference between government and governance becomes clear: the government is the authority that determines the course; In return, leadership is the process by which something is decided.

We already know that there is no central authority in Bitcoin, no government that makes decisions. That’s not a bug — it’s a feature. The lack of a governing body leads to a unique leadership mechanism: the consensus.

While in a democracy the majority determines the minority, in a consensus everyone decides about themselves. Participants have exclusive power of decision over themselves and their property. That is, in Bitcoin, not the majority decides — but everyone, everyone over themselves. Who participates in the network implicitly agrees to the rules. Everyone agrees on these rules. Any interaction is based on a voluntary basis.

Decisions in the consensus model

The example of block scaling demonstrates the consensus principle:

In 2016 and 2017, one question dominated the Bitcoin world: how should Bitcoin scale to a global currency? The answers were as varied as they were contradictory. Two camps moving in opposite directions — “Larger blocks!” — “No, SegWit!”. A hopeless dilemma? After all, there is no instance that says where to go. The status quo is retained. But that was not the end of the story.

After several years of debate, the Bitcoin Protocol showed its true strength. Instead of forcing one or the other camp something, there is a third option in Bitcoin country. In the words of Dora the Explorer: “Por que no los dos?” (Eng. “Why not just both?”). In fact, this was the solution to the conflict. The Bitcoin Unlimited team forged the Bitcoin network. Bitcoin Cash realizes the proposed larger blocks. Bitcoin, on the other hand, enabled SegWit and implemented a different approach to solving the scaling issue.

All users could and can decide for themselves. If you want larger blocks, you can sell Bitcoin for Bitcoin Cash; if you want SegWit, you sell your Bitcoin Cash for Bitcoin; Undecided do not have to do anything. Whether you want to use Bitcoin or Bitcoin Cash (or neither) is up to you. Essential: All decisions happen voluntarily.

Hard Forks instead of majority vote

In a democracy, the majority must agree to make a legitimate decision. By consensus, this condition is drastically tightened: everyone must agree. If there are disagreements, the paths fork. This is called a hard fork. Then there are two incompatible networks. Within the systems, however, there is still consensus.

Here is the power of consensus. He tolerates a plurality of opinions and everyone can live them out. Where in a democracy only one variant can win and be implemented (Trump or Clinton? German Mark or Euro?), the consensus model allows everyone their ideal world. Whether larger blocks or Lightning are the right way to scale or not, shows us the time. We’ll see because both approaches exist.

Bitcoin is not a democracy. Although there is no government, there is still leadership. By participating, they all implicitly agree to the consensus rules. Decisions are made by all participants. Everyone decides for themselves. Suggestions for improvement are discussed in the community. Ultimately, everyone can take the helm in their own hands and “forks” the computer code — that is, realize their own ideals. How many people jump on the Hard Fork, however, is another matter.

Author: Marko Vidrih

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Most writers waste tremendous words to say nothing. I’m not one of them.

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