Bitcoin Is Not A Democracy. Then What It Is?

[krishnapramod]

According to Antony Antonopoulos, Bitcoin isn't a democracy, some people call it cypherpunk or crypto-anarchy, https://youtu.be/TC3Hq76UT5g

I don't think Bitcoin is a democracy - rather it is a flat, network-based, collaborative system of super-majority consensus among five constituencies (users, developers, exchanges, merchants, miners), which makes change very difficult. It is a radical decentralization of power. Some people call the politics of this system "cypherpunk," "crypto-anarchy," and other words we don't yet have.

Is bitcoin a meritocracy?

It is holding of power by people selected according to merit. They wield the power.

Rodolfo Novak: Bitcoin is a true technical meritocracy. Cry/Kick/Scream as much as you like, but if your shitty code & ideas aren't good they wont make it

Is bitcoin a plutocracy?

It is the holding of power by the wealthy, elites.

Is bitcoin anarchy?

It is absence of government and absolute freedom of the individual, regarded as a political ideal.

[buwaytress]

If we say that Bitcoin's direction is achieved through "voting with your hashpower", then:

1. maybe it is an anarchy, and partial democracy at least.

2. It can't be meritocracy since that implies selection based on merit as you mention, (merit meaning talent rather than merit of hashpower). Novak's quote must seem trivial now because shitty code could very well win the day with enough economic resource.

3. sadly, plutocracy does seem to hold sway over Bitcoin the most. We can see the wealthy or the elite classes, battling over Bitcoin's direction, holding the most Bitcoins, the majority pouring scorn and ridicule over the rest, lording over the satoshi holders.

[Cuber Krypton]

In my view:

Bitcoin is Free Market Capitalism. Which encompasses Meritocracy I guess. And also true Democracy.

All ensured by incorruptible Cryptography. Which is what democracy has always been lacking.

Bitcoin is Bitcoin

[iamTom123]

In my view:

Bitcoin is Free Market Capitalism. Which encompasses Meritocracy I guess. And also true Democracy.

All ensured by incorruptible Cryptography. Which is what democracy has always been lacking.

Bitcoin is Bitcoin

For lack of a better term, I guess I would agree with you on this description. Bitcoin is business and the people who can have power over it are of course people who heavily invested on it. That is for sure. Bitcoin, for all of its merits and innovations, is not really destined to change our societal norms and political structures. It can however affect the financial sector. Wishing that Bitcoin can change the world is already punching the moon.

Right now, Bitcoin is becoming like a speculative currency. We all want to make money...and honestly Bitcoin is also exposing the greed of many and which to me can just be fine because Bitcoin is for everybody whatever political spectrum you might belong.

[Wendigo]

Centralized Capitalism 

[dinofelis]

Bitcoin is a game.  The original idea of bitcoin was that it was a game that would result in a payment system, according to certain rules.

Now, the whole discussion is: is bitcoin an *immutable* game, that is, the rules are set in stone for ever, or is bitcoin a game where the rules can change ?

The thing with a game is that it has to be played collectively.  That's entirely different for most other software, that doesn't have to be played.  Most open source software is used by users, and those users can change it to their likings, whether others agree with that or not.  Most software is not about collective games.

On top of that, a payment system is an antagonist game (like most games).  It is not something to have fun with.  It is a game that serves to "win over others", and where real material advantages or losses are coupled to how the game evolves.

This makes that bitcoin has nothing to do with "software development", or "open source" or any other community activity: bitcoin is an antagonist game with real world material advantages and disadvantages coupled to it.  As such, *being able to change the rules can have a huge impact on who the winners and the losers are* and changes to the rules are not neutral.  Those who can change the rules, if any, can put a lot of advantages on their side.

This is why *ideally*, bitcoin would have been an immutable game.  The rules are known and immutable, and hence, there's no power to be had to change them.  My idea was that bitcoin had something to it that made modifying the rules, if not impossible, at least very difficult.  Satoshi's biggest invention was a cryptographic game that could, to a certain extend, keep its rules immutable (at least those rules that impact anything on the side of winners and losers, that is, ECONOMICAL rules).

However, bitcoin was ill designed.  A fundamental problem in bitcoin was not only never solved, there was even an explicit barrier to it: scaling, and the block size limit.  So somehow, bitcoin's bad design was the result of an unsolved problem, and a to-be-modified barrier.  The troubles we are witnessing today are the direct consequence of that contradiction in bitcoins' design: a game that can only be honest if it is immutable, no provision for "changing the rules", and the necessity to change them or hit a wall.  Bitcoin was somehow designed to fail long term.

As no explicit provision is made in bitcoin to change the rules, and as immutability will lead to hitting a wall, the game-theoretical outcome of who can change the rules is open to inquiry.

Strictly technically, there are two "sources of power" in bitcoin: there are the mining pools that de facto decide upon bitcoin's rules by "consensus", that is, by building upon other pools' blocks that apply the rules they agree to ; and there is the economic power of the market players that are willing to give value to coins (the speculators and other users).

If consensus breaks down, we get a chain split, and we get different flavours of bitcoin, each with their own speculator valuation, giving a feedback to those miners "voting" for them.   The complex dynamics of short and long term risks, gains, and so on in this game-theoretical setting is complicated, and in fact, a possible outcome is immutability, that is, no miner can decide to "leave existing consensus" because the risks or the losses are too big.

As the first initiative to any change of rules has to come from miners, we can say that the miner pool owners are somehow an oligarchy over bitcoin, but as they are part of a game-theoretical dynamics themselves, I don't know how to call this.  It certainly is not a democracy.  The "speculator/user" part has something of a free market to it.  But only a few people can actually decide to do something, which turns it into an oligarchy, that is, a small set of aristocrats that can potentially change the rules ; however, with a market deciding over their acts.

[cengsuwuei]

bitcoin is about business and economy not democracy
so if have much money can dominated and control bitcoin price sample exchanger, but never only one people have over 10% from total suply bitcoin

[Cuber Krypton]

In my view:

Bitcoin is Free Market Capitalism. Which encompasses Meritocracy I guess. And also true Democracy.

All ensured by incorruptible Cryptography. Which is what democracy has always been lacking.

Bitcoin is Bitcoin

For lack of a better term, I guess I would agree with you on this description. Bitcoin is business and the people who can have power over it are of course people who heavily invested on it. That is for sure. Bitcoin, for all of its merits and innovations, is not really destined to change our societal norms and political structures. It can however affect the financial sector. Wishing that Bitcoin can change the world is already punching the moon.

Right now, Bitcoin is becoming like a speculative currency. We all want to make money...and honestly Bitcoin is also exposing the greed of many and which to me can just be fine because Bitcoin is for everybody whatever political spectrum you might belong.

Actually, I think Bitcoin really is destined to change our societal norms and political structures. I think Bitcoin is a real revolution of the commons.

Also, although I can agree that it's current value holds alot of speculation, the value of Bitcoin is backed by energy. So Bitcoin will always have value to someone as long as someone is wasting energy on it (mining).

I think Bitcoin is past that threshold where there is too much invested to go back. Bitcoin is now here to stay and can fundamentally tip the scales and release us from financial chains, which are the only chains that really matter.

But to understand this, we have to stop thinking of its value against USD, but of its intrinsic utility value.

And even if Bitcoin doesn't succeed, which I can't envision, it planted the idea that it is possible. Bitcoin is not only the technological invention of the Century, but the Social one too.

We now have the tools. We will understand how Sheep or not we are at the end of this.

[niisarearning]

Its none of the above i voted for that because apart form anarchy remaining words i searched in google and get to know the meaning . There is no need for comparing its just payment mode with revolutionary changes.There is lots of people find job because of bitcoin instead of big banks is holding all the transaction . Now normal people can benefit from that . Its just a revolutionary thing.

[Cuber Krypton]

As the first initiative to any change of rules has to come from miners, we can say that the miner pool owners are somehow an oligarchy over bitcoin, but as they are part of a game-theoretical dynamics themselves, I don't know how to call this.  It certainly is not a democracy.  The "speculator/user" part has something of a free market to it.  But only a few people can actually decide to do something, which turns it into an oligarchy, that is, a small set of aristocrats that can potentially change the rules ; however, with a market deciding over their acts.

Although I follow your reasoning and quite like the definition you gave, I have to argue this conclusion. In a censorship free market, you have no barrier to entry. You yourself can choose to be a Miner. This is much different than Oligarchy.

The fact is, Bitcoin only rewards those who do things efficiently. Not wasting resources in inefficient tasks. This is exactly what a Free Market system does. It directs resources to the most efficient use. Everything else, would just be a subsidy paid by all others.

Bitcoin is also blind, it does not discriminate, and it does not require anything, you can do anything you want. It just punishes inefficiency because it is unregulated. No excuses, no subsidies, no bailouts. This gives users a real choice, this is the democratization of money. Every user matters, and every user votes with their dollars. Also, it makes people actually think and not just wait to be bailed out or told what to do. Puts the responsibility on those who want it.

How many times do you lose value on trivial endeavors because some idiot just wants it done for him? And because of him, everyone has to pay to protect the single case that he might so something stupid on his own and complain about it? In Bitcoin you have a choice. In the real world, not so much. You are taxed in value lost every step of the way just because some of us want someone else to blame.

You don't need any node for that.

The path of Bitcoin as I say, will tell us a lot about ourselves as a species.

[Prodigan786]

I voted for bitcoin is anarchy because of the quoted statement i really agree with that "It is absence of government and absolute freedom of the individual, regarded as a political ideal" Its the odd man out from existing mode of currency it changed the whole concept of currency being rebel.

[Seansky]

I think bitcoin is like an anarchy just because miners who has a huge mining power holds the upper hand in terms of bitcoin scaling and whales holds the power in terms of price. Having said that, this two won't have real power if users would not use bitcoin in the first place so it is none of the above. For me bitcoin is just like an anarchy, but it ain't one.

[Ucy]

Why was Bitcoin created in the first place?

Going against Bitcoin fundamental is unethical and criminal. Activities of stakeholders MUST revolve around Bitcoin/Blockchain fundamentals.

[gilangIDR]

I think bitcoin is like an anarchy just because miners who has a huge mining power holds the upper hand in terms of bitcoin scaling and whales holds the power in terms of price. Having said that, this two won't have real power if users would not use bitcoin in the first place so it is none of the above. For me bitcoin is just like an anarchy, but it ain't one.

Anarchy for some places. But according to its function I consider bitcoin is a free thing because we can freely use bitcoin.
Bitcoin can now be used by everyone and everyone is entitled to use bitcoin.

[ecnalubma]

I dont consider bitcoin as fully democracy because government can still seize and regulate it anytime they want. Consider it democracy in terms of sending money wherever you are and whatever you do.

There's no right term to call it though if its not democracy then. But good thing is we enjoyed bitcoins hassle free transactions.

[dinofelis]

As the first initiative to any change of rules has to come from miners, we can say that the miner pool owners are somehow an oligarchy over bitcoin, but as they are part of a game-theoretical dynamics themselves, I don't know how to call this.  It certainly is not a democracy.  The "speculator/user" part has something of a free market to it.  But only a few people can actually decide to do something, which turns it into an oligarchy, that is, a small set of aristocrats that can potentially change the rules ; however, with a market deciding over their acts.

Although I follow your reasoning and quite like the definition you gave, I have to argue this conclusion. In a censorship free market, you have no barrier to entry. You yourself can choose to be a Miner. This is much different than Oligarchy.

Yes, and no.  On one hand, you are right, in that at first sight, there are no privileged aristocrats that can give the "right to mine", like they give licences to be a pharmacist or a wireless operator, and punish with violence those that try to do that without their agreement.

However, in reality, economies of scale and local subsidized electricity and manufacturing of asics make that there is a *de facto* oligarchy of mining pools, mining producing equipment, and profitable mining business.  Essentially, as a small newcomer, you cannot enter, even though there is no aristocratic RULE with violence that holds you back.  Call that "free market" if you wish.  But if you push this logic to the extreme, then even states are a free market.  After all, how does a state acquire its monopoly of violence over its territory ?  By having an army.  You can then argue that there is no barrier to entry: everybody can set up his own army, compete in the "revolution market", and try to win the de facto violence monopoly, so states are no aristocracies either if you push the logic you advance, to the extreme.

The point is that there is a kind of "winner takes all" system in bitcoin: the block that is won, makes all other competing work on the previous block moot.  Yes, statistically, you can compete with small mining equipment, but in reality, you can't, because there's a collective unique consensus for each block, and there are no "small, local blocks with their own customers".  In fact, that DOES exist, but it is called "alt coins".  Within bitcoin, every block is a winner-takes-all competition.  This is different in a real free decentralized market, where the local bakery can sell bread to the local customer, without a "winner takes all" global competition for each bread that is being sold.

The effective economies of scale that make mining only profitable if it is done in large pools, with large equipment, and with local subsidized electricity and cheap labor, makes that it does lead to a de facto oligarchy, even if that oligarchy is not a "privilege oligarchy" obtained by the direct licensing of the violence monopolist aristocracy.

The fact is, Bitcoin only rewards those who do things efficiently. Not wasting resources in inefficient tasks. This is exactly what a Free Market system does. It directs resources to the most efficient use. Everything else, would just be a subsidy paid by all others.

This is a bit ironic with bitcoin, because bitcoin mining is pure waste.  You get in fact a competition of wasting where the "wasting function" is simply biased.  In bitcoin, you have to abuse the bias in the wasting function to be "efficient" in the way you explain.  Efficient usually means "More utility for the same waste", which is at the basis of the "best allocation of scarce resources".  But in bitcoin, "proof of work" is simply "proof of waste", but the proof is biased.  You can FAKE produce more "proof of waste" in certain circumstances than in others, but the "difficulty attained" is of no economic utility by itself.  Nothing is produced.  You only "proved waste", and some can "prove more waste with less waste" than others, which is the degenerate idea of "efficiency" in this particular case.  If I can get cheaper electricity, and I can build smarter hardware (ASICS), I can fakely "prove" more wasted work than someone else, and I get to win the contest, but nothing more valuable was produced.

This is entirely different from "finding ways to produce cars with less resources".  No, I find "ways to prove more wasted work with less resources", which begs the question.  The proof of wasted work has no utility, contrary to cars that were produced. 

The fact that you can get "economies of scale" and "efficiency advantages" in "proving wasted work" is simply an error in the proof of work function, which only provides a biased proxy to "wasted work", and doesn't prove any direct waste ; if it were, there couldn't be any efficiency differences, by assumption.  Proof of work is (by definition) not useful.  It was only meant as a tool to avoid sybil attacks, and to enhance true decentralization, while it degenerated in exactly the opposite because of the failed design of it.

[BitcoinGirl.Club]

I think bitcoin is somewhere near being an Anarchy type of currency because it's not under the control of the government and is certainly not a democracy as we witnessed earlier before segwit was activated, it is not really based on our votes in spite having a part to play by influencing the devs . I honestly think these political terms can not define bitcoin it just belongs in its own world.

[DooMAD]

The thing with trying to compare Bitcoin with concepts like "Democracy" or "Capitalism" is that those are generally poorly defined concepts to begin with and involve so much wishful thinking and doublespeak that it's beyond a joke.  Both are deeply flawed and even downright broken and debauched in their current guises.  Both are murky, contorted shadows of what they should truly be.


If you live in certain parts of the world, many would have you believe that your system of governance is a democracy, but these people are in denial. Democracy can be described as:

Government by the people; a form of government in which the supreme power is vested in the people and exercised directly by them or by their elected agents under a free electoral system

In reality, the thing we call democracy is where a bunch of tax-dodging corporations and millionaires throw money at some corrupt puppets who try to enact the policies that prove most profitable for the corporations and the millionaires.  Influence is bought and sold with the intent of redistributing wealth to the top of the pyramid.  The public then vote for the bought crook they detest the least.  It has absolutely nothing to do with representing the interests of the general public and hasn't for decades.  

A more accurate description would be a "Kleptocracy", a form of political and government corruption where the government exists solely to increase the personal wealth and political power of its officials and the ruling class at the expense of the wider population.


If you live in certain parts of the world, many would have you believe that your system of commerce is capitalism, but these people are in denial. Capitalism can be described as:

An economic system in which a country’s trade and industry are controlled by private owners for profit, rather than by the state

In reality, the thing we call capitalism is where the businesses that don't even need it receive government tax breaks and are effectively subsidised by the public for no reason, while the failing businesses like banks are bailed out by the government, again at the taxpayer's expense.  The government also generally keeps interest rates artificially low to benefit the financial sector.  It has absolutely nothing to do with a level playing field where the most competitive companies reap the rewards and hasn't for decades.

A more accurate description would be "Growthism", the toxic admixture of capitalism for the poor, who receive no advantages, while it's socialism for the wealthy, who will receive an endless stream of handouts, subsidies, bailouts and lifelines at the expense of the wider population.


Bitcoin is none of these things, and thus, can't be compared with them.  It's something better than democracy or capitalism could ever hope to be.

[dinofelis]

The thing with trying to compare Bitcoin with concepts like "Democracy" or "Capitalism" is that those are generally poorly defined concepts to begin with and involve so much wishful thinking and doublespeak that it's beyond a joke.  Both are deeply flawed in their current guises.

The concepts themselves are quite clearly defined.  However, they do indeed not apply to our current societies.  Our societies are elective aristocracies.  That is to say, they are aristocracies, but instead of having a hereditary indication of who is part of the aristocracy (= those that can impose their will on others, also called "lawmakers"), there's a voting game that is played.  Voting is a game like any other, and is not a clear expression of own preference.

A true democracy is a system where all subjects subjected to rule, are to decide themselves by vote of majority on every rule and aspect of collectively imposed behaviour.   No place in the world is a democracy.  Probably Switzerland comes close, but no cigar.

In a true democracy, every single decision by the "collectivity" is taken by majority of all those affected by the decision.  It is the pure dictatorship of the majority.  Most systems that call themselves "democracies" are jokes, in that they only give themselves a kind of imposed legitimity by a funny system of pseudo majority of votes over the aristocratic clan that will have the power to decide on all of collective aspects for the next 4-5... years.

Government by the people; a form of government in which the supreme power is vested in the people and exercised directly by them or by their elected agents under a free electoral system

From the moment you have "elected agents", you have lost democracy, and you turn those "elected agents" in an aristocracy of some kind.

In reality, the thing we call democracy is where a bunch of tax-dodging corporations and millionaires throw money at some corrupt puppets who try to enact the policies that prove most profitable for the corporations and the millionaires.  Influence is bought and sold with the intent of redistributing wealth to the top of the pyramid.  The public then vote for the bought crook they detest the least.  It has absolutely nothing to do with representing the interests of the general public and hasn't for decades.  

Yup.  That is the fundamental function of state: to extort the people to keep the power in the hands of an aristocracy.  In the ancient regime, that was explicit, in the new regimes, that is somewhat better hidden with games like elections and so on. 

A more accurate description would be a "Kleptocracy", a form of political and government corruption where the government exists solely to increase the personal wealth and political power of its officials and the ruling class at the expense of the wider population.

Yes, but that is the unavoidable outcome of every power monopolist (state) ; it was designed for that purpose by the first Kings.  The first Kings (in Mesopotamia) were actually temporarily put in power by the "council of the wise" in the city-states the time of war and conflict, because war-time needed a leader and one didn't have time to ponder and discuss.  The King soon realized that he would remain in power if he kept war ongoing, which is what happened (the Kings in other city states came to the same conclusion).   As Kings remained in power during never-ending wars, they could impose their own kin as their own successors.... this is how royalty was born.   Nothing fundamentally changed since then.

An economic system in which a country’s trade and industry are controlled by private owners for profit, rather than by the state

true.

Given that in "modern democracies" about 70% of the national product goes through the hands of the state in some or other form, we are in reality in state capitalism.  The "capitalist" countries of this world are almost more communist than the USSR was in its initial years.

Bitcoin is none of these things, and thus, can't be compared with them.

Bitcoin is no exception.  Bitcoin's power structure will fall in one of the different classes of standard power structures.  The ONLY possible exception would have been if bitcoin were truly immutable.   If bitcoin turned out to be game-theoretically immutable, it would mean that there is not any power structure that can make its rules.  It would be a "theocracy" where the rules are laid out once and for all by a divinity, Satoshi, and nature would be such that no-one would be able to modify the Divine Rules.  However, we all know that the original rules will hit a hard wall, because of the block size limit.

So in as much as Bitcoin is a theocracy, it will have a Final Judgement Day very soon built into it.

And if ever the rules can change, there will be a power structure that will change those rules, and it will be a human power structure, with people having the power to change them, and others, without that power, which is exactly what an aristocracy is about.

[HabBear]

It's a Republic.

Each person that owns bitcoin does not get to vote on the future developments of Bitcoin. But bitcoin owners entrust the node owners and miners (bc miners have slightly greater "voting" power) to make the decisions on future Bitcoin developments. And if you don't like how the node owners and miners have "voted" you can sell your bitcoin and choose to you another cryptocurrency or none at all.

The one empowering element is that anyone can run a bitcoin node and thus participate in the "voting" process.

I put voting in quotes because it's not a vote as much as accepting newly created code. Any new code generated needs to be accepted by the nodes and miners and if a majority accept the new code it becomes part of the existing core blockchain (and thus bitcoin).