Minimizing financial governance
“Yes: stand back a little bit, you are taking away the sunlight from me” — the philosopher Diogenes' reply to Alexander the Great's offer of granting him any wish.
Anti-governance is the main value that blockchain technology adds.
Cypherpunks repulse governance, so the lack of it has been the main goal in Bitcoin from the beginning.
Bitcoin is rules without rulers. The valid blockchain is defined by a set of rules (protocol), which when it is run
simultaneously by different nodes, consensus emerges.
The “consensus protocol” then simply consists of thousands of computers (nodes) enforcing property rights in an automated way.
Asking “who controls Bitcoin?” is like asking “who controls English?”.
In Bitcoin, "social consensus” is ruthlessly minimized by maximizing the role of the “consensus protocol”.
That minimization is the most important requirement for an immutable monetary system.
Bitcoin should be treated as nuclear-grade financial software. Advancing slowly is a dogma.
The core design of Bitcoin is inmutable, only technological innovations that improve security may be gradually included in its code.
This stuff is difficult. This stuff is subtle. If you are frustrated by how slow Bitcoin moves, let me tell you, Bitcoin moves too fast. Cryptography is hard and scary, and we need to make sure we move slowly — Andrew Poelstra (Bitcoin developer).
Bitcoin security updates are:
1. Researched. While deployment of new features in Bitcoin is incredibly slow (for good reason), the pace of research is overwhelming — Andrew Poelstra.
2. Proposed. The incentives for the prevalence of the Store of Wealth function lead to a strong rejection of insecure ideas.
3. Implemented and tested if there is an overwhelming acceptance by the "community" formed by the most active contributors to the software.
4. Deployed as open source code, so that users can verify them.
5. Enforced by nodes. The update has to be accepted by the rest of the ecosystem consists in a bunch of strangers using Bitcoin in different ways. Each node operator is sovereign and has to manually install updates.
Bitcoin succeeds when developers and economic nodes maintain the ideology that upgrades are mentally costly and are only justified for specific reasons.
The more procedural risk and mental cost (hard fork > soft fork > upgrade without fork), the fewer reasons to upgrade.
The term fork means a change in the consensus rules:
-A soft fork tightens the consensus rules. Some blocks considered valid by nodes running the old version will be considered invalid by those running the new version. It does not require simultaneous upgrade of the entire network.
-A hard fork relaxes the consensus rules. Blocks considered invalid by nodes running the old version, may be considered valid. It requires every node to upgrade.
A hard-fork make users' lives meaningfully worse, so it will not happen except in the face of extreme on-chain security problems.
How would it play out in the case of a fatal and general failure in Bitcoin's technology?
The more influential developers have hopefully some principles in common and, in such a catastrophic scenario, they would probably contribute to deploy code that migrates the simple Bitcoin rules into a new technology. That is "the nuclear option".
In such circumstances, Bitcoin as a concept would probably prevail over its technology.
If SHA-256 became completely broken, I think we could come to some agreement about what the honest block chain was before the trouble started, lock that in and continue from there with a new hash function — Satoshi Nakamoto.