The fundamental assumption of any blockchain, whether public or private, is that 51% of actors are honest. For this assumption to hold, there must be decentralization (a sufficiently large number of individual/entity actors to such extent that exercising direct influence on 51% of actors is unfeasible) in four key aspects: developers, miners/stakers, exchanges/businesses, and media platforms.
To place weight on their influence is difficult due to the balance of power between these four fundamental pillars. We can say, however, that developers, who write the rules by code, have slightly more influence than the other three due to their expertise, but this influence vanishes if there are two development teams as the advantage of expertise becomes non-existent.
If the two development teams diverge and the subject matter is sufficiently controversial, the decision moves to miners, who enforce the code, or exchanges/businesses who, as proxy for users, adjudicate on the matter. The balance of power between these two pillars can be complicated and dependent on the specific circumstances. If exchanges/businesses are split within their ranks to a significant extent – say 60-40 or more – then 51% of miners may have a final say. If exchanges/businesses are, however, overwhelmingly in support of one direction, then it would depend on how the code was presented. Balancing Power
With hindsight, we can say that the primary mistake of the development team in favor of scaling bitcoin onchain was the requirement of 75% of miners prior to activation. This requirement distorted the balance of power and led to a complete breakdown in governance as well as a protracted and never ending debate as a decision was actually never made. Exchanges and businesses, despite being overwhelmingly in favor of scaling and being a pillar of their own, were reduced to a mere media platform while miners […]
