Bitcoin’s governance crisis

Bitcoin has received a lot of attention over the past few years, with both spit and applause. Some people see it as the savior of the financial system, while others think it is just a new toy for the tech community. But no matter what you think, Bitcoin has achieved a certain degree of technological success. Despite its initial immaturity when it was released to the developer community, these geeks have really turned this imaginative computer protocol into a stable currency system that operates globally.

The personal investment of these developers must be huge. To build such a system, they need to combine extraordinary innovation with knowledge of software engineering and cryptography, as well as high political awareness and familiarity with international diplomatic game theory, and finally build alliances with others on the Internet and work hard to convince the public to accept this emerging thing.

These skills are essential for the healthy development of Bitcoin. As the stakes continue to increase, early developers are beginning to be stretched in all aspects. The big question now is, "Can the Bitcoin Alliance really reduce the growing political burden?"

Bitcoin is a decentralized currency system that aims to become a new currency for the Internet. Through this system, developers want to eliminate and reduce the lack of trust and currency system risks caused by human participation.

However, even if Bitcoin is just a machine developed by humans, the political forces hidden beneath it still want to intervene and hold the power of life and death over its core code.

To join the game, you need to invest a lot of money and come up with a modification plan, so that only those stubborn developers will remain. But the advantage is that you can prove that you are absolutely right and win the interests of millions of users, while making a lot of money yourself.

Tough Choices

With so many players joining the game, how can we make overall decisions in such a challenging new environment?

Until late 2010, the only spokesperson for Bitcoin was Satoshi Nakamoto, the mysterious creator behind Bitcoin. The Bitcoin protocol was built on Satoshi’s software, and at that time the Bitcoin community was small, and Satoshi was worshipped as a deity.

But unexpectedly, Satoshi Nakamoto suddenly disappeared in late 2010, and a power vacuum appeared in the Bitcoin community. Since then, the power struggle in the Bitcoin community has never stopped, and the legitimacy of each leader has been questioned.

Because of the huge financial risks involved and the mentality of participants not trusting anyone, the game of Bitcoin has become more and more intense. However, ironically, this mentality has boosted people's demand for the Bitcoin system.

Unlike other software projects, small changes to Bitcoin code can affect the entire ecosystem. For example, solving the current Bitcoin crisis requires dealing with the consequences of a small change in the early days, when a transaction limit mechanism was introduced due to too many invalid transactions.

Now that billions of dollars are at risk of being wasted, who should deal with this mess?

Learn from other software projects

Countless historical experiences have proven that strong leadership makes it easier for everyone to reach a consensus. For example, Linus Torvalds, the inventor of Linux, has been a "dictator" for 24 years, promoting the continuous development of the Linux system.

The technical bet he made back then allowed this once enthusiast operating system to enter thousands of households and become the basis of our smartphones and various servers. For the success of this project, Torvalds invested countless efforts and constantly made choices at the crossroads of change or persistence. It is precisely because of his unremitting persistence and his spirit of never bowing to political correctness that he has always been respected.

If Torvalds doesn't like your code, you're out of luck, because he has been a staunch defender of the Linux code for many years. But you can make your own "special version of Linux" based on the original Linux code, so that you can install your own code and have complete control over the system.

However, this would be seen as a major move at the time and a challenge to mainstream Linux. After all, exchanging code between the two systems is a big project, and the code may go off track in the process, so developers and users have to make difficult choices.

As Linux developed, its derivative versions became more and more, and maintaining them became a daunting task, so Torvalds created Git, a decentralized code repository so that developers can interact and share their code more easily.

Bitcoin and Git have a lot in common in essence, because their purpose is to help people reach consensus. Bitcoin helps people find out which transactions are valid, while Git tells people what code changes should be made in the latest version of the system, thereby guiding developers' subsequent work.

Git changes the guiding principles of code development. Any changes you make to the code no longer require authorization from the source code owner.

With the advent of Git, it became less important to release your own version or have Torvalds incorporate his ideas into the final code. Each derivative code became a branch of the source code, but at the same time, it became easier to merge code. As this trend developed, developers paid more attention to comparing the merits and value of their own versions.

So what is a useful version? How does a small piece of code create value? These are subjective questions that Git cannot solve for the time being. The power struggle behind the official version is still surging, but we can already hear more voices, and these branches are no longer such earth-shattering moves.

In contrast, the problem faced by Bitcoin is more complicated because its rules need to be recognized by all participants. But in fact, Bitcoin's rules are hidden in its official version of the code.

Although the current situation of Bitcoin is very different from that of Linux, Linux's successful experience is still worth referring to and learning from.

What is the difference?

But the fact is that Bitcoin cannot afford a new code branch. The smallest change would mess up Bitcoin's ledger and destabilize its main database of transactions.

Chaos will destroy the confidence of users, and in the long run, such a schizophrenic behemoth will inevitably go to extinction. This is also the reason why the core developers of Bitcoin never act rashly. They have a verbal agreement with the Bitcoin community to ensure that they will maintain the basic principles of Bitcoin and keep its system running, so that it has the strength to challenge the traditional financial system.

Where is the future?

There is no doubt that testing is not yet complete, and new changes must be introduced to the Bitcoin system as soon as possible, but the process must be rigorous and responsible. Some developers are now trying to develop a new currency system and test their new code. This new system is called Alt Coin, but it is not well-known yet.

The team at Blockstream came up with another solution. The venture capital firm wanted to conduct an experiment within the Bitcoin system, but it would never affect the operation of the main system. It would make the entire system more flexible, allowing developers to be completely free to innovate.

Opponents believe that this will force the Bitcoin protocol to lean towards the government, thus truly taming the beast. Like Git, this experiment called "sidechains" distracts people from the focus on who is the real heir to the underlying code change mechanism.

However, they still have a consensus, which is to preserve Bitcoin and develop it.

As the game progressed, the atmosphere became increasingly tense, and we were finally awakened to the fact that consensus building was so difficult. All previous attempts had little effect. Venture capital firms can play an important role in transformation, but most people still prefer fresh blood to take charge.

Participating companies will be given jobs that suit them and in which they can prove their worth to the Bitcoin community.

Can we really reach consensus automatically without human participation? Satoshi Nakamoto left us a great experiment, and the estimated value of this experiment has reached 4 billion US dollars. The Bitcoin community has been looking forward to the results of the experiment.

Bitcoin may not need a "dictator", but when the system grows to a certain scale, it must have a strong leader to lead the team to forge ahead on the road of experimental reform.