Market Thoughts: How We Can Make Bitcoin Even Better
Bitcoin’s governance is highly centralized. To take it back, we’ll need a wide number of people from all across the world to get actively involved in more than just “HODLing.” The good news is we’re on the way there.
For years, “HODL” has been the rallying cry of Bitcoiners, of which I am one(since I have an amount of bitcoin). When I read Evan Shapiro’s piece today via CoinDesk, however, I realized that he’s right.
“HODL” really isn’t enough any more for one key reason.
Bitcoin’s governance is centralized. That includes both its mining as well as its method of putting forth and implementing changes to its structure, called “Bitcoin Improvement Proposals.” To be clear, 65% of Bitcoin mining happens in China and the entire process of voting on and implementing of BIPs relies on Bitcoin developers. While this second phenomenon is arguably not such a bad thing, it looks worse if you consider the fact that Satoshi envisioned Bitcoin as a currency owned by and governed by the people of the world.
With that in mind, the reality that we sit in today falls considerably short.
To be clear, I don’t mean that developers should be cut out of the process of proposing changes to the Bitcoin network. I think that obviously, since they’re the only ones who know how to code said changes, they should still run BIPs.
Still, the average Bitcoiner could be more actively involved.
What if, for example, a BIP were implemented that allowed average users to vote on BIPs with their Bitcoin? I’m not proposing any specifics on this at this point, but passing such a measure would move Bitcoin towards being the DAO it was meant to be.
In other words, by involving both developers and the average user, i.e., “everyone else,” Bitcoin’s governance would basically be decentralized (as much as anything can be). If you’re not familiar with the idea of decentralized governance in this context, just think “a network that’s really run by its users.”
What about mining?
In a very basic sense, making mining decentralized means getting more miners who are from new, underrepresented areas online. This could be anywhere except for the areas that already control the majority of Bitcoin’s hash power, which is the aggregated amount of computing power that’s currently dedicated to mining and consequently, keeping Bitcoin running.
Luckily, because of the way Bitcoin’s built, a major change is bound to happen. Generally, as more users come online, more miners are bound to come online to support them. With that in mind, consider that for Bitcoin, it’s still extremely early.
As more and more people learn about it and how it’s historically been one of the greatest hedges against the rest of the financial space, more users and miners will dive in. If users with enough sway in the Bitcoin community start large-scale educational efforts related to mining, then the sky’s the limit in terms of where new miners could come from.
Imagine if the Bitcoin community got together around efforts to further decentralize both mining and BIPs and the sheer power we would wield as a unified entity. Yes, there’d be resistance from individuals who don’t want to lose their current seats of power, but it’d be largely inconsequential, because in the end, Bitcoin was meant to truly be the people’s currency.
It’s already easy for anyone to invest in Bitcoin. Why not make it easy for anyone to help lead it into a better future?
Watching the growth of the crypto industry for the last 4 or so years, I believe we’re likely on the way towards reaching the milestones I’ve discussed here one day.
Here’s to hoping that’s the case because decentralization in both mining and the BIPs process is, in my humble opinion, the key to Bitcoin reaching new heights we haven’t even begun to imagine.
As I’ve said before, if we all offer our own criticisms openly, perhaps that’ll lead to a healthier culture of building and even educating the world together as crypto-evangelists over tribalistic splits. In any case, until next time, here’s to you, because anyone reading this is still an early crypto adopter.
Finally, most of my free time is now being taken up with my newsletter, which is completely free and focused on how the rise of the Metaverse improves things for everyone. Sub here.
Disclaimer: None of this is meant to be financial advice. I’ve researched and worked in crypto since 2016 and I aim to merely educate people on the upsides and downsides of all sorts of projects and the market itself. Additionally, I’m a student just as all of us are. Therefore, my thoughts on projects evolve naturally over time as I learn more about them. Last but not least, none of these posts represent the thoughts of NBX unless otherwise stated and this includes all posts that preceded this one.
