Bitcoin is sometimes thought of as a new, more-democratic form of money that is controlled by the general public, but this point of view may miss the point of the decentralized, peer-to-peer digital cash system.
During a recent talk at a Bitcoin meetup in Sydney, Australia, Mastering Bitcoin author Andreas Antonopoulos was asked for his thoughts on whether Bitcoin could be considered a democracy. In his response, Antonopoulos shared his thoughts on democracy more generally, how Bitcoin does not fall under that categorization, and how the balance of power works in Bitcoin.
The Perils of Democracy
After pointing out that he himself is from Greece, which is where the concept of democracy was first developed, Antonopoulos noted that he personally doesn’t believe in raw democracy.
“[Democracy was invented] under very specific circumstances: 3,000 land owning, slave owning white males got to decide for themselves and the 150,000 slaves, women, and [children] who they owned as property,” said Antonopoulos.
Antonopoulos went on to explain that democracy, without the proper restraints, gives 51% of the population the ability to decide to kill the other 49% for any reason they choose.
“Democracy without restraints, without human rights, without civil rights, without constitutional protections is a brutal system of oppression where once you get that sliver of majority, you can eradicate everybody else,” said Antonopoulos.
After discussing the perils of raw democracy, Anthopoulos also clarified that the sorts of constitutional republican democracies and parliamentary democracies seen today are intended to guard against these issues.
Bitcoin is Not a Democracy
Getting to the topic of Bitcoin, Anthopoulos was clear in his belief that Bitcoin is not a democracy.
“Bitcoin isn’t a democracy — not even in the mining,” said Antonopoulos. “Bitcoin is a system of supermajority consensus where it takes a very large percentage of the deciding groups (the five constituencies of consensus) in order to make change, which makes change very difficult.”
A similar sentiment was shared during the 2016 MIT Bitcoin Expo, when a panel of Bitcoin developers were generally dismissive of the concept of Bitcoin as a democratic system.
Antonopoulos went on to say that some may refer to the political system used in Bitcoin as cypherpunk or cryptoanarchy, but he added that new words may be needed to describe how Bitcoin works in a political sense.
“Bitcoin is redefining political and organizational systems — not just Bitcoin: open, public blockchains,” said Antonopoulos. “This technology born out of the internet and expressing some of the radically egalitarian, open philosophies of free flowing information, freedom of speech, freedom of association on a transnational basis that transcends not just borders but every aspect of identity without identity.”
In Antonopoulos’s view, the traditional, democratic systems do not scale globally due to their hierarchical nature. He referred to Bitcoin as a “radical, new political system.”
“Flat, network-based, collaborative, decentralized adhocracies on the internet may be the new thing,” said Antonopoulos. “Who knows? It will be fun to find out.”
How Does the Balance of Power Work in Bitcoin?
Expanding on the question about Bitcoin as a democracy, Antonopoulos was also asked to explain how the balance of power between various actors in the Bitcoin ecosystem works.
“We don’t know yet — we’re finding out,” responded Antonopoulos.
To Antonopoulos’s point, the upcoming deployment of the SegWit2x proposal may be a test of the balance of power in Bitcoin. While a chain split can be prevented during the activation of the soft fork for Segregated Witness, it’s unclear what will happen if Bitcoin companies and miners decide to attempt a hard-forking increase of the block size limit.
“All of that noise doesn’t change the Bitcoin consensus rules,” said Antonopoulos in terms of signed agreements and chatter on social media. “At the end of the day, it’s going to play out on the network protocol with nodes that are participating that express the economic interests of their users through choices about which set of consensus rules they use on their live systems and with their transactions.”
Antonopoulos added that “talk is cheap” when it comes to changes to Bitcoin’s consensus rules. “At that last moment, when push comes to shove and you see the consensus rules are moving one way — you know, you stick your finger in the air and you detect which way the wind is blowing — suddenly, your very sacred, principled opinions go straight out the window and you follow your pocket,” he said.
Antonopoulos concluded this discussion around Bitcoin governance by noting that Bitcoin could end up splitting into two separate cryptocurrency networks. “I don’t like that particular solution for Bitcoin, but some others do,” he said.
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