Bitcoin: Decentralized governance put to the test

Source: American Institute for Economic Research
by Max Gulker, PhD

“Bitcoin’s system of radically decentralized governance is facing perhaps the biggest test in the digital currency’s history. As my colleague Patrick Coate described, the code used to run Bitcoin’s blockchain database needs to be updated to transmit more information faster. However, there are two major proposals on the table for how to change the code. The controversy has raged for months and may even result in Bitcoin splitting into two currencies. Many of Bitcoin’s greatest strengths come from its decentralized nature, but if there were somebody at the center of its network making decisions, the current problem would look very different. The governing body would choose one path, and those who didn’t like it could sell their Bitcoins. This structure would resolve the uncertainty much faster, and not result in a split that would likely scare off some potential Bitcoin users. The decentralized structure of Bitcoin is not, alas, a free lunch.” (05/16/17)