Economic majority: Difference between revisions

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Create article for the theory referred to as Economic majority regarding who has power over future protocol changes.
 
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The theory that the power to control the bitcoin protocol is held by those who hold bitcoins.
The theory that the power to control the Bitcoin protocol is held by those able and willing to offer things of value for bitcoins (be it goods, services or other currencies).


As long as mining is conducted for economic gain, then any change adopted by the miners needs to be supported by the '''economic majority''' for it to be successfully implemented.
As long as mining is conducted for economic gain, then any change adopted by the miners needs to be supported by the '''economic majority''' for it to be successfully implemented.


While miners could adopt changes that are not welcomed by those holding bitcoins and start mining using the changes, their mined coins might not be accepted by users that refuse to adopt the changes. Thus those miners would then, in that instance, not gain economically from adopting the change. This scenario exists regardless of whether or not the miners adopting the change had 51% of the hashing strength.
If there are changes to the protocol that are not welcomed by those who want bitcoins but the changes are adopted by miners regardless, then the coins mined (starting with the first non-compliant block mined) would not be recognized by those who didn't adopt all the changes. Thus those miners would then, in that instance, not gain economically from introducing any changes that the Economic Majority didn't want. This outcome would be the same regardless of whether or not the miners that attempted to make the changes had 51% of the hashing capacity.


So the ability for a protocol change to be successfully implemented ultimately rests with those who accept bitcoins in exchange for value.
So the ability for a protocol change to be successfully implemented ultimately rests with those who accept bitcoins in exchange for value. Generally those will be the merchants. If the economic majority doesn't run full nodes Bitcoin is dead<ref>[https://www.reddit.com/r/Bitcoin/comments/3lzm6d/can_i_use_bitcoin_without_storing_the_entire/cvazdc8 Bitcoin Expert]</ref>.


Generally those will be the merchants. Just as a consumer has the ability to boycott a business if the consumer has a problem with how they operate, Bitcoin consumers have the ability to boycott merchants as well. Thus a Bitcoin merchant might not adopt a protocol change that would not be welcomed by its consumers.
Credit goes to Meni Rosenfield for first coining the term<ref>[http://bitcoin.stackexchange.com/questions/3945/how-could-the-bitcoin-protocol-be-changed-has-this-ever-occurred#comment4983_3948 How could the bitcoin protocol be changed? Has this ever occurred?]</ref>.
 
==See Also==
 
* [[Full node#Economic_strength]]
* [http://bitcoin.stackexchange.com/questions/8285 Is Bitcoin's Economic Majority those who already own coins or those who will buy or keep coins?] on Bitcoin Stack Exchange
* [[Bitcoin is not ruled by miners]]


So by default, ultimately a protocol change has to be welcomed by those who hold bitcoins.
==References==
<references />


Credit goes to Meni Rosenfield for first coining the term<ref>[http://bitcoin.stackexchange.com/questions/3945/how-could-the-bitcoin-protocol-be-changed-has-this-ever-occurred#comment4983_3948 How could the bitcoin protocol be changed? Has this ever occurred?]</ref>.
{{Bitcoin Core documentation}}

Latest revision as of 17:45, 6 January 2018

The theory that the power to control the Bitcoin protocol is held by those able and willing to offer things of value for bitcoins (be it goods, services or other currencies).

As long as mining is conducted for economic gain, then any change adopted by the miners needs to be supported by the economic majority for it to be successfully implemented.

If there are changes to the protocol that are not welcomed by those who want bitcoins but the changes are adopted by miners regardless, then the coins mined (starting with the first non-compliant block mined) would not be recognized by those who didn't adopt all the changes. Thus those miners would then, in that instance, not gain economically from introducing any changes that the Economic Majority didn't want. This outcome would be the same regardless of whether or not the miners that attempted to make the changes had 51% of the hashing capacity.

So the ability for a protocol change to be successfully implemented ultimately rests with those who accept bitcoins in exchange for value. Generally those will be the merchants. If the economic majority doesn't run full nodes Bitcoin is dead[1].

Credit goes to Meni Rosenfield for first coining the term[2].

See Also

References

  1. ↑ Bitcoin Expert
  2. ↑ How could the bitcoin protocol be changed? Has this ever occurred?


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