Will Decentralization lead to Bitcoin's demise or salvation?
Since its inception, Bitcoin’s main selling point has been its decentralization. Bitcoin claims to solve an age-old problem: how do you transfer value between strangers without a trusted, centralized, third-party? Early adopters have embraced Bitcoin as a superior alternative to centralized systems, which have shown themselves often to be unworthy of the trust given to them. However, Bitcoin is now facing an existential crisis that tests its decentralized nature.
The ongoing blocksize debate – which is about so much more than the block size – reveals fundamental rifts between major players in the Bitcoin ecosystem. Who decides Bitcoin’s future? Core developers, miners, merchants, node owners, and regular users all have a legitimate stake in Bitcoin, and all in some way are involved in charting the future of the cryptocurrency. That is the essence of decentralization – no one person or entity decides Bitcoin’s direction. But what happens when these parties fall into opposing factions? The temptation arises to create a central authority who can make a final decision.