Interest in Bitcoin and other cryptocurrencies is on the rise. That means that more people are also seeking to learn more about blockchain technology and how it is applied to digital currency. One of the frequently asked questions about this subject is, “Who controls the blockchain?” It is an easy question to answer but the answer itself is confusing to some. Let’s explore who is behind the Bitcoin blockchain.
Understanding Consensus and Blockchains
Before we meander down this road of blockchain control we should remind everyone of something important. There is not one blockchain. This is a cause of common confusion because sometimes writers refer to the technology as the blockchain. There are different blockchains for different cryptocurrencies. The Bitcoin blockchain and the Ethereum blockchain are two separate entities. Some cryptocurrencies may be built upon an existing framework, but they still have their own blockchain identity.
One of the central models of a blockchain is consensus. It is consensus, or agreement, that is built in to a blockchain’s design. Consensus helps everything to work properly. The question is who participates in this agreement of blockchain maintenance? Who is responsible for consensus?
This is a question that opens a Pandora’s Box of other considerations. Some people want to know who is making the decisions for a blockchain. Is there some type of political power among the individuals that own crypto which makes some suitable for decision-making while others get excluded? Consensus implies that a group of people have agreed on something of importance. Who are these people?
Controlling the Bitcoin Blockchain Through Proof of Work
It would probably be correct to say that most people reading this to learn who controls the blockchain are specifically concerned with Bitcoin. That’s where we’ll target our answer to the question. The answer starts by stating that Bitcoin is a platform based on a concept called Proof of Work.
In a Proof of Work system of blockchain management there are people who choose to help keep the blockchain updated by verifying transactions. These people are called miners. They can connect a computer to the Bitcoin network to create a node. Nodes all work together to confirm transactions and add blocks to the blockchain.
Those who solve complex mathematical problems that are a part of the Proof of Work process are rewarded with new Bitcoin. Mining among individuals and even from your home was fairly common at one point. Today it is much more likely to see mining done by mining farms that can afford the resources needed to mine.
A Proof of Work concept puts power in the hands of the miners who operate nodes. They are the ones ultimately responsible for adding new blocks to Bitcoin’s blockchain where they become a permanent part of the record. For those blocks to be added there has to be consensus among the miners.
The thing one must understand here is that power in this sense only relates to confirming blocks. Miners in a Proof of Work system don’t have any type of political power over decisions regarding Bitcoin. No one really has that ultimate power because Bitcoin is a decentralized cryptocurrency. It was designed specifically to eliminate the need for third-party oversight.
What About Other Blockchains?
The Proof of Work concept is not the only one that is used in cryptocurrency. There is also a model called Proof of Stake. In this type of model the power is in the hands of those who have invested in the cryptocurrency. These investors can be a single individual like you or they can be venture capital firms with large crypto holdings. All investors have the same ultimate goal. They want to profit when the cryptocurrency goes up in value.
When it comes to making political decisions for a blockchain the Proof of Stake concept gives greater power to those who control the most tokens. It is assumed that those with a large interest in a cryptocurrency will act in a manner that helps the token and its blockchain thrive.
Those who own very little crypto in a Proof of Work blockchain system are often unconcerned with protocol decisions. For example, if you own 5 Ether you probably don’t spend the day thinking about how to improve the Ethereum platform. If you own 100,000 Ether then blockchain decisions are probably more important to you.
The Bottom Line on Who Controls the Blockchain
We told you in the beginning that the actual answer to the blockchain control question was easy to manage. Because cryptocurrencies are decentralized there is no one person or group with complete control over the blockchain. No one person, not even the anonymous creator Satoshi Nakamoto, owns the Bitcoin blockchain. No one is designated as the supreme authority over Bitcoin.
We also told you that while the answer was simple to give that the answer in itself was complex. As we saw earlier, there are concepts called Proof of Work and Proof of Stake which do confer some limited form of power to miners and investors. This power ranges from the simple verification of blockchain transactions to actual voting power in matters affecting a blockchain protocol.
As a simple investor in Bitcoin you do not have to answer to anyone. Once you buy your tokens they are yours to do with as you please. For most people that is the end of their anguish about who controls the blockchain.
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