Unlike a fiat currency controlled by banks and governments, the nature of Bitcoin is decentralized, meaning that no individual, group, or government is in complete control of it.
If someone wants to change how Bitcoin works or manage transactions, then first such a decision must be approved by a large circle of people.
Control by the miners
BTC transactions are added to the blockchain by miners who personally decide which transactions will be included in the blocks. Despite this, they cannot censor transactions. The BTC network is made up of many miners, each with their own opinions and values. Even if 90% of miners tried to prevent the transaction from being included on the BTC blockchain, eventually the remaining 10% of miners would include it. Especially if the transaction is sent with a high fee, then the miners tend to act in their own interests.
However, there is a much higher risk of network control known as a 51% attack. If one group controls 51% or more of the power of the network, then they can cancel blocks (only the most recent ones). It is worth noting that China currently owns a significant portion of the hash power of the BTC network, as many miners are based there due to inexpensive electricity. Having a large percentage of mining happening in one country increases the risk that the government will use that mining power to accomplish its goals, including a 51% attack to cancel blocks containing certain transactions. Fortunately, over time Bitcoin mining becomes more geographically distributed.
Bitcoin Core is the software that most users run on their BTC nodes. The risk associated with “development control” is that developers who maintain the Bitcoin Core code repository can maliciously change the code.
The Bitcoin Core code is stored in a GitHub repository. Bitcoin Core is open-source software, which means that anyone can try to fix bugs or improve the code. Even though there are hundreds of people writing and reviewing the code, only a few can actually make changes. It may seem that the developers of Bitcoin Core control the direction of Bitcoin development, but this is not the case because:
- If they were to try to implement drastic changes to BTC or block previously approved changes, the rest of the developers could easily move the project to another location and choose a new set of maintainers to maintain the code repository.
- Most of the changes in Bitcoin Core do not affect the “consensus rules” that determine the way the first cryptocurrency works. Instead, developers are focusing on other issues, such as the Bitcoin Core wallet (which is different from the Bitcoin protocol itself) or making the network more efficient.
- The process of changing the rules of the BTC protocol will take a long time, because it is necessary to convince the majority of developers, miners and users of the need to make changes. This is not an easy task that will take many years. For this reason, code changes that affect Bitcoin consensus rules are rarely made.
Ultimately, it is the users themselves who have the greatest influence on the network. BTC users run node software that enforces consensus rules. If developers try to make changes that users do not agree with, then users can simply refuse to run the new software. Even if miners try to forcefully change the consensus rules by mining blocks with the new rules, the blocks they mine will become worthless if none of the users follows these consensus rules.
In 2017, Bitcoin users demonstrated the extent of their control during the Segwit2x/UASF move. At that time, 80% of the combined mining power, along with some of the major exchanges and developers, were trying to achieve changes that would increase the BTC block size.
Thus, the miners wanted to increase the number of transactions that could be processed by the network, but BTC users rejected this for two main reasons:
1) it will be more difficult for ordinary users to run a Bitcoin node to verify the transaction;
2) making changes carries huge security risks.
Thus, Bitcoin allowed the creation of an innovative platform for the transfer of value without the participation of any central authority, taking into account only the opinions of network participants: miners, developers and hodlers.