Clearly there are technical issues with problem of creating a viable Bitcoin fork that I didn’t go into. Since there has never been a battle between two forks before, there are a lot of unknowns about how to do it right, but technical issues like that could be addressed if they were properly researched. In both the cases of the service providers and the miners, the problem which makes them less influential than one might think is the fact that they do not necessarily have the funds to take the risk of deciding for themselves which version they like better and which they are going to promote. Investors do not have to listen to anybody else because they can afford to take the risk of asserting influence. For example, a Bitcoin fork might not be able to work because its hash rate would initially be so low that blocks could take days or weeks to mine.
Anyone can fork Bitcoin, but suppose there were an upgrade proposed by some very influential people-the core devs-and suppose that it would hard-fork the Bitcoin protocol in some fundamental and controversial way. The investors can, and their actions can be expected to alter the composition of the group of full node runners in a way that is not matched by the effect which the full node runners have on the investors. This thread on BitcoinTalk argues that the people who run full nodes can stop an upgrade by refusing to upgrade. Everyone can choose which fork to follow, or even run both versions at the same time. Over a sufficiently long time span, therefore, the interest of those who now run full nodes become meaningless in comparison to the desires of those who are now investors. Therefore, Bitcoin New won’t necessarily be stopped even if a lot of full nodes refuse to upgrade. If they refuse to mine on the new chain, that will stop Bitcoin New in its tracks, right?
Who can stop New Bitcoin from taking over? This question is really about who can influence the development of updates and who can block them. Even the full nodes (by which I mean, nodes that store and validate the whole block chain) are not contributing much. Obvious bug fixes are likely to be adopted, whereas cockamamie schemes which do not clearly improve Bitcoin’s value-such as proof-of-stake mining or changing the block reward schedule-have no real chance of succeeding and are therefore hardly worth talking about. In short, the problem is that they are not necessarily investors, who by definition do have the funds. Each has its own network, and anyone who owned bitcoins before has the same amount of New and Classic. When two armies meet, if they can determine who would win without actually fighting one another, then the battle is over without having begin. We’ll assume that there is some real disagreement about whether the upgrade is a good idea because if there was not, then there would be no problem. If Bitcoin New becomes more valuable than Bitcoin Classic, then miners will mine it and services will support it.
Bitcoin might be upgraded in ways that make it more anonymous because a more anonymous coin would likely be more valuable. The motivation of investors is the value of the coin. The general rule about Bitcoin upgrades, therefore, is that upgrades which increase Bitcoin’s value will be adopted and those which do not will not. Therefore, Bitcoin is not likely to be upgraded in ways which make it easier to regulate because that would decrease the value of the coins. It all boils down to the value of the two coins. Effectively there are two Bitcoins now. As the two classes of people expressed their preference in their actions, the investors would tend to cause an increase in the market cap of new over classic, while the node runners would tend to increase the number of nodes of classic over new. While the nodes do control a network, in a sense, the investors control which network becomes important. Consequently, an individual person’s control over Bitcoin should is better characterized in terms of the amount he owns than in how many nodes he runs.