An Empirical Study on Governance in Bitcoin's Consensus Evolution

Abstract: Blockchain systems run consensus rules as code to agree on the state of the distributed ledger and secure the network. Changing these rules can be risky and challenging. In addition, it can often be controversial and take much effort to make all the necessary participants agree to adopt a change. Arguably, Bitcoin has seen centralisation tendencies in pools and in development. However, how these tendencies influence blockchain governance has received minimal community and academic attention. Our study analyses the governmental structures in a blockchain by looking into the history of Bitcoin. We investigate the process of changing consensus rules through a grounded theory analysis comprising quantitative and qualitative data from 34 consensus forks in Bitcoin and Bitcoin Cash. The results reveal the decentralised behaviour in Bitcoin and blockchain. Our results are in contrast to related work, emphasising centralisation among miners and developers. Furthermore, our results show how the consensus-driven deployment techniques and governance of consensus rules are intertwined.