Economic majority

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The theory that the power to control the bitcoin protocol is held by those who hold bitcoins.

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

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. 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.

So by default, ultimately a protocol change has to be welcomed by those who mine bitcoins resp. generate new valid blocks which lengthen the most difficult block chain.

Credit goes to Meni Rosenfield for first coining the term[1].