Steve Lee and Ren Crypto presented their recent paper co-authored with Lyn Alden, which analyzes the stakeholders in Bitcoin consensus.
- The first stakeholders they identify are investors, which includes: individuals holding bitcoin, institutions, sovereign wealth funds, governments, etc
- This first group signals their preference for upgrades through fundraising, social engagement, and other avenues.
- Economic nodes are the second stakeholder group they identify: crypto exchanges, payment processors, merchants, RPC providers
- They can define which fork is bitcoin by choosing which software to run and which ticker (coin) they transact with.
- As Ren points out, media and press can influence conversation and consensus and tend to act in their sponsors best interest, so they can be considered another stakeholder group
- Miners are another primary stakeholders in consensus and include not just individual or institutional miners, but mining pools themselves.
- Protocol developers are another powerful stakeholder group who have the ability to actually present and refine the upgrades in question.
- The last stakeholder group includes application developers and users who actively use bitcoin and develop software for various applications. They often run nodes that are well connected for Bitcoin’s gossip network.
- More consensus changes are being proposed outside of Bitcoin Core currently.
- “Alternative client adoption is an important option for bitcoin but very difficult to achieve,” Lee says. There are plenty of hurdles in the way of non-Bitcoin Core clients.
- Changing Bitcoin is realllllly hard. It takes ~40 weeks on average for the majority of nodes to apply an upgrade.
- Mining pools are more centralized than ever as a result of proxy pooling. This creates hazards for reaching consensus, especially in light of hashprice being at an all-time low.
- “Softforks changes don’t require consensus to partially deploy…but it creates a fragile network.” Pointing to pool centralization, Lee points out that three companies could push a consensus change that some economic nodes support but others don’t.
- If there’s ever a chain split and two coins emerge, the market will decide which is “the legitimate bitcoin.”
