Bitcoin: For the People? Democratic?

Much of the rhetoric on bitcoin revolves around it being a money for the people; a democratic money; a money for freedom and liberty. Is that really the case though? Is bitcoin a form of money that empowers people and the average person? Is bitcoin democratic?

To answer these questions, it’ll be worthwhile to briefly go over what a pure democratic system looks like. After establishing what a pure democracy looks like, we will then discuss bitcoin’s origin and creation, its adoption and ownership, and its governance model. Throughout our discussion, we’ll find that bitcoin is far from being a monetary system that is for the people. Worse yet, the narrative around bitcoin is deceptive, because contrary to many of the claims around it, it does not empower the people and is not democratic.

There are a few caveats to make prior to moving forward:

First, the narrative around bitcoin being for the people and democratic is not always based on its governance model alone per se, but is also based on its monetary attributes that are hard coded in its design (its fixed supply, scarcity, peer-to-peer nature, etc.). These codified features are believed by some to be qualities of money that empower the people, because they are traits that are essential for a good, sound money. In fact, there are several bitcoin advocates who acknowledge the fact that bitcoin isn’t democratic, but claim that it empowers the people regardless due to its monetary features. However, what maintains these characteristics are bitcoin’s monetary design and governance, so this post is looking at bitcoin’s design and governance model in isolation of its particular monetary attributes as a monetary asset. In other words, we are approaching the codified design and governance of the bitcoin protocol as opposed to the monetary features of the asset itself.

Second, I want to be clear from the outset that this argument should not be understood as a case against open-source and community based software. On the contrary, we should value and protect open-source and community managed software, as there is a lot to admire about them, since they are the backbone of almost all technology and contribute immensely to our digital age. With that, I acknowledge that the bitcoin protocol is a formidable open-source and decentralized project, which, as I’ll touch on later, is one of its strongest and admirable characteristics. That said, the point I’m tackling in this essay is not how a software is managed and maintained, but how a money is designed, managed, and maintained. To elaborate, an open-source community and decentralized model can manage and maintain the working of a protocol or software that is situated as the operating system of money, but how we decide what money is and how we take into account the interests and voices of the users of money goes beyond the protocol or software running the plumbing of what we deem is money. In other words, money is not just software. Software can power the operations of money, but money stands beyond software.

I also want to highlight that this discussion does not intend to argue that democratic governance is the best form of governance and that monetary systems should necessarily be democratic. Moreover, the discussion is not intended to point out that bitcoin is “bad” just because it is not democratic. The point of this discussion is to highlight that bitcoin’s narrative around it being for the people and democratic is misguided.

With all that said, let’s look at what constitutes a pure democracy.

Pure (Direct) Democracy

A pure democracy involves people having a direct voice in decision making. People in a community get together to share their thoughts on specific topics and either cast their votes or reach consensus for a specific decision to be made. If the majority votes or agrees through consensus for a specific action, then the action will be executed on. If the majority votes against a specific action or agrees against it through consensus, then the action won’t be taken. In a direct democracy then, governance and decision making lies directly in the hands of all people.

When it comes to designing a specific function or organization via pure democratic means, all stakeholders would have a voice in how that specific function or organization should look like. It would be the people who collectively debate and vote on how, say, a central bank should look and operate. People in a community coming together and collectively forming institutions by debating and voting or reaching consensus on what and how a specific institution should look like, how it should be governed, and what functions it should undertake – as well as continuous voting or consensus-reaching on decision making post the institution’s establishment – is how a pure democracy would function in shaping organizations. To use the example of the institution of money, a true democratic money would involve people discussing what form of money would be best for them, and they will then vote or reach consensus on what type of money they want to have and how that money should be governed moving forward. As you can see, people are directly involved in the decision-making process and have a direct voice.

It must be noted that what has been described here is a form of direct democracy as opposed to a representative democracy in which citizens vote to elect representatives to make decisions on their behalf. A pure democracy suggests direct participation by all citizens in all aspects of decision making, which means that decision making is truly in the hands of the people.

To be clear, the current institution of money and the decisions made by central banks that impact people’s lives are not democratic since the decision making by monetary authorities are done by the “technocrats” without consultation of the people and without listening to the people’s voices. It’s also not a form of representative democracy since people don’t have the ability to even vote for monetary officials to represent them. For example, in the USA, these central bank officials are appointed by the president and confirmed by the senate. It is no secret then that monetary policy has technically been out of reach of the people, and is approached, for the most part, in an entirely technocratic and authoritative approach.

With all that said, does bitcoin give the people a voice? Does it empower the people? Does it make the institution of money for the people or democratic?

Bitcoin’s Creation

Let’s look at bitcoin’s origins as a first step in evaluating how it stands in relation to it being democratic or for the people.

Bitcoin was designed by an anonymous individual or group, Satoshi Nakamoto, with a specific view of what money is or ought to be. Satoshi’s views seem to be influenced by a hybrid of monetary creeds, primarily associated with a mix of the commodity theory of money, libertarian anarcho-capitalist, and techno-utopian perceptions, accumulating in a form of scarce, fixed-supply, rule-based, digital, and institution-free money. With that doctrine, Satoshi leveraged blockchain technology to make this vision of what money is or ought to be a reality.

Some people may agree with Satoshi’s view, but others might not. There are many ideologies around what money ought to be, and there are a number of ways that people might approach designing a money that suits them best. Not everyone agrees or views money in the same way that Satoshi views it, and even if some agree with the views held by Satoshi, they had no say in designing bitcoin. Based on this foundation, it is clear that bitcoin was not developed by a collective community voting or reaching consensus on what money ought to be, but rather was developed in a centralized fashion by an anonymous group or individual who idealized and envisioned a specific form of money.

So, our first point here is that bitcoin was not designed by the people in true or pure democratic fashion, but was rather designed by a few individuals (or an individual) who wanted to simulate a scarce form of commodity money and make it a digital reality. To reiterate, this form of money is idealized and believed to be the best form of money by that group or individual who created bitcoin. Of course, a subset of like-minded people agree with Satoshi Nakamoto’s views on money, but people at large had no say and no voice in shaping anything about it. If there was an ongoing debate and platform to voice different views based on a variety of schools of thought on what money is and ought to be and how it ought to be governed, people might opt for a different form of money than what Satoshi Nakamoto put forth. They might have even developed a cryptocurrency with different embedded laws and features in its code. And so, a money that was created by an individual or group without any backing by a broader base of people is not a democratic form of money. It is rather an imposed form of money.

The clever aspect of bitcoin, however, is that while it was centrally designed, it was then let go into the wild to be free of any central authority and to be run by a decentralized body of participants: these include miners, developers, and node runners. In other words, its design and code was made available in an open-source manner for all the public to see and interact with. Given that bitcoin’s designer(s) withdrew from running bitcoin in a centralized fashion and handed the code and governance to a decentralized body of participants, bitcoin advocates might say:

"Sure, bitcoin was designed and developed non-democratically or in a centralized approach initially, but it represents a money that works best for the people, its ongoing governance is decentralized, and people accept it “democratically” by purchasing it and being part of the community. If they don’t agree with what bitcoin is and what it stands for, they are free not to buy it and be part of the community, which is equivalent to not “voting” for it."

Let’s dig into this claim by first looking at bitcoin’s adoption.

Bitcoin’s Adoption

In the early days, Bitcoin was a very niche project that appealed to a group of cryptographers, techno-capitalist anarchists, futurists, and right-wing libertarians. Its adoption was confined to those groups and wasn’t very popular with the masses. Its use as money for exchange was in fact limited to these afore mentioned groups and to illicit activity on the black market and dark web for the most part.

Eventually, bitcoin’s narrative around it being a hedge against inflation led to more adoption by people who were unhappy with the direction monetary policy is going. With the price appreciation of bitcoin, more people started purchasing it as a speculative asset for fear of missing out as opposed to their belief in what bitcoin stands for and what it aims to achieve. That said, the buying and trading of bitcoin still revolved around a niche market and a niche group.

Today, contrary to claims by crypto lobbyists that the majority of Americans hold crypto, only around 10% of Americans actually hold or use cryptocurrencies according to the latest surveys by the Federal Reserve. Moreover, the claimed global percentage of crypto ownership is around 6.8% (Crypto Ownership & Interest by Country). It should be noted that the numbers from the Fed survey and the global crypto ownership report include all cryptocurrencies, not only the population holding bitcoin. Also, the ownership numbers obviously include people who hold crypto for speculative reasons as opposed to having a deep belief in it as a better form of a monetary asset or system. In fact, the Fed report linked stated that in 2025, approximately 9% of respondents used crypto assets for investment purposes.

For the most part, bitcoin is still confined within its niche group of hardcore supporters and by groups that aim to profit from ancillary services of the asset. Also, if more people are acquiring bitcoin, it isn’t because they are familiar or in agreement with the ideology behind it as a better form of money, but rather for speculative reasons as the price of bitcoin goes up. Bitcoin in this case is just a speculative asset detached from its ideological foundation and motive. In addition, a large amount of bitcoin is held by whales (individuals who hold and accumulate a significant amount of bitcoin and who were typically early purchasers of bitcoin).

Clearly, claiming that bitcoin’s adoption illustrates how it is a money for the people is in fact a weak case, because bitcoin remains adopted by a relatively small group of people. In fact, a significant number of people are skeptical of bitcoin (see Majority of Americans aren’t confident in the safety and reliability of cryptocurrency). Moreover, at the time of writing this article, the majority of bitcoin is in fact held by centralized crypto institutions, corporations, and governments who seized bitcoin from criminal or other activity (Who Owns the Most Bitcoin and How Their Holdings Impact the Market).

It is a very niche group who hold it in support of what it stands for and as a “vote” to how they envision their monetary system or the future of money. The rest hold it for speculative purposes detached from any ideological sentiment as to what money should be. With that, bitcoin has very few “votes” in its favor. Yet, bitcoin evangelists have been putting a lot of resources to push bitcoin’s narrative and have been reverting to immense lobbying power and pressure tactics to legitimize its existence and gain acceptance for validation, to the disappointment of OG bitcoiners who believe in what it stands for and who see it as being co-opted by the same institutions it was supposed to stand against.

It is clear that the people have not massively adopted bitcoin. Claiming that the adoption of bitcoin acts as a “vote” for bitcoin or shows consensus that people want bitcoin as a form of money or monetary system is a weak case. In fact, it shows that bitcoin is not accepted and desired as a form of money by the majority.

Let’s now turn to bitcoin’s governance model.

Bitcoin’s Governance

The governance of bitcoin is admirable for its decentralized and open-source nature that has been maintained by its community and has been properly working so far, for the most part. We will not go deep into how bitcoin works overall, but we will briefly outline the process of how changes or updates are made to bitcoin. It must be highlighted that bitcoin is designed in a way to be difficult to change. The goal is for bitcoin to maintain the embedded laws that are codified in it, which make it predictable and “trustless”. Note that these are the codified features that were attributed to it by Satoshi as mentioned above. Nonetheless, changes are possible and do take place, so it is important to go through the governance structure and how changes to bitcoin are made or could be made.

To start, any participant in the bitcoin community can submit a proposal to what developments they’d like to see in bitcoin. The proposed changes are first discussed between developers in the bitcoin community. If some level of agreement is reached, a formal proposal, known as a BIP (Bitcoin Improvement Proposal) will be written and edited in a specific format. The BIP typically touches on the technical aspect and rational of the proposed update/change. With the formal BIP submitted, the broader bitcoin developer community evaluates the proposal, discusses it, and conducts testing. If a consensus is reached among the developers, the Bitcoin Core team works on implementing the proposed changes. For the changes to take place, however, bitcoin miners will have to signal their acceptance of the proposed changes. Around 95% of miners need to signal support for the update to be activated in the bitcoin code. Finally, if the update has been implemented, users who run nodes (computers that participate in the bitcoin network) decide whether to update to the new version or not – it is up to the node runners to opt-in to the new changes in bitcoin or remain on the unchanged, older code.

It must be noted that the process described here is focused on soft forks. Hard forks, on the other hand, “requires all network nodes to upgrade their software to the latest version to keep participating in the network” (How do Hard and Soft Forks work?).

Overall, the process of implementing and accepting changes to bitcoin is decentralized and collaborative with checks and balances taking place in the process. While there is no formal voting structure, changes are reached by consensus-signaling and by very meticulous collaboration and oversight by the community. This is akin to how open-source software works in general.

Now that we have outlined the decision-making process for changes or revisions to bitcoin, let’s turn to the question of whether this governance model is truly a democratic process and if it is a monetary system for the people.

Let’s discuss bitcoin miners first:

Bitcoin miners are crucial participants in the bitcoin network. In the early days, mining bitcoin was mostly done by individuals running software or a mining rig in their room via their PC. Today, bitcoin mining has evolved into an industry with corporations owning real-estate and immense computational power mining huge amounts of bitcoin every day. In fact, the most powerful bitcoin mining projects are now public companies, and a handful of miners dominate the space. The bitcoin mining industry has become concentrated and continues to grow in concentration. With that concentration comes significant power in shaping the future of bitcoin, whether via collusion or monopoly, especially given that miners play a major role in bitcoin’s governance system and have a lot of influence as mentioned previously.

One might say that while the mining industry is gaining power, the checks and balances imposed by the bitcoin developers and the participants running the nodes impede miners from going rogue and taking over. That is a valid point, but let’s look at the composition of developers and node runners.

To be part of the bitcoin community proposing changes or participating in discussions around changes, one needs to be highly technical and knowledgeable in the space to participate. While decentralized in the decision-making process, participants running the bitcoin network resemble highly technocratic individuals and groups. Such a highly technical way of approaching decision-making is out of reach of the regular person who is not that deep in the bitcoin community. Even submitting BIPs requires having the necessary background, skills, and knowledge to suggest something relevant to add to the bitcoin protocol.

It is also important to highlight that while consensus is needed by the participants in the bitcoin network to make changes, the participants, as mentioned, are a subset of highly technical individuals and groups who more or less share the same views and skills when it comes to monetary application and technology. It is easy for such a group to collaborate on specific changes, and there is an element of groupthink. That is not to say that everyone in the community is always in agreement. We’ve seen a couple of disagreements emerge within the community, and the whole point about consensus reaching is for open debates on disagreements to eventually decide as a whole on a specific items. Nevertheless, while the consensus mechanism is formidable, the discussions within the bitcoin community are specialized and technocratic in nature, as opposed to accessible for the average bitcoin holder or user.

The point here is that it is a few, highly technical folks who are maintaining the bitcoin network and who are running the show, regardless of its decentralized, open-source nature, and participation by most people is not accessible given the technical barriers. Rather than being an accessible monetary system that is for the people and democratic, bitcoin is run, maintained, and overseen by highly technical people; the technocrats.

Furthermore, from the group of people who hold bitcoin, not everyone is deep into its technical operations and absorbed by what it stands for. As mentioned before, most people hold bitcoin for speculative purposes and are not active in the community (i.e. in the maintenance and decision-making process of the bitcoin network). Holding bitcoin does not equate to being an active member in the community and in the decision-making process, because the process requires highly technical sophistication. Moreover, purely holding or owning bitcoin does not give one a voice in bitcoin governance and does not allow access to the community running the show.

Finally, as mentioned earlier, if any changes are implemented to the bitcoin code, the people running the nodes have the power to decide to update to the new code or remain on the old code. With that, the developments implemented to bitcoin need to be adopted by the community running the nodes, and node runners have the power to not update to new versions of the code if they don’t like the changes made. That said, we run into the same issue that was highlighted previously: people running the nodes tend to be highly technical participants who are deep in the bitcoin community. Additionally, many centralized institutions such as crypto exchanges, among others, typically run the nodes. The end user, or the people that bitcoin proclaims to empower, hold the bitcoin offered to them by the exchange and do not have a direct say in which bitcoin version they are holding. Most people holding bitcoin don’t even know or care which version of bitcoin they are holding anyways, because, again, the motivation to hold bitcoin by the average person is for speculative reasons as opposed to holding it in support of the ideologies and monetary-political movement that bitcoin represents. Moreover, there are barriers to entry in running nodes since running a node requires “enough storage space to store and process the entire Bitcoin blockchain, which can include hundreds of gigabytes of data” (What is a Bitcoin Node?).  

This high level of technical sophistication needed to participate in the inner workings of the bitcoin network makes bitcoin vulnerable to being dominated by the few who are deep in the community and is contrary to a democratic, monetary system that is for the people. While bitcoin is decentralized and has robust checks and balances, it is nonetheless susceptible to being co-opted by a dominant, like-minded group and is in fact run by a few highly technical people.

Now, we have to admit that running and maintaining software does require technical know how. It wouldn’t be a good thing to have random individuals with no technical skills to be able to make changes and even propose lackluster suggestions to how a piece of software works. That said, while the technical skills behind open-source software are a feature, money, as mentioned in the introduction and implicitly in this section so far, isn’t just software or operating system. Money is a socio-economic tool and is highly political in nature. What it is, how it is managed, what rules it holds, and what constitute it affect individuals and the whole community who use it. So if we are approaching bitcoin as a money for the people, as a money that empowers individuals in a society, then its governance can’t be approached as purely an open-source software. The operating system of money could be approached in that way to make sure it runs smoothly, but the money itself isn’t the operating system. The money itself should hold features based on what the people using it believe money ought to be and must be malleable and dynamic in a way that benefits the whole when needed. Of course, proponents of bitcoin would claim that the power of bitcoin if the fact that it makes money purely software. The code makes it “trustless”; however, if a rigid, codified money is run by “technocrats”, then that isn’t a democratic money and doesn’t necessarily empower all people in the community, because some of its rigid laws might be disadvantageous to a certain group, and they will have mo ability to partake in proposing any changes to the money itself.

In a way, bitcoin is decentralized amongst the technocratic bitcoin community as opposed to being a decentralized system that includes all people. The bitcoin code, protocol, and network, at the end of the day, are maintained by humans, and while the checks and balances put in place are admirable, the decentralized nature of bitcoin’s governance is situated in the hands of highly technocratic participants and is in no way shape or form by or for the people at large.

Conclusion

As mentioned at the start, the purpose of this article is not to argue that the best form of monetary governance should be democratic, but rather, the aim is to highlight that bitcoin evangelists and the crypto industry push out a false, deceptive narrative of bitcoin being a monetary system that is for the people and democratic.

As we’ve shown, the foundation of bitcoin is fixated on one idea of what money ought to be and was designed by a central figure(s). Furthermore, the adoption of bitcoin is lackluster and only gained steam for speculative purposes. While the bitcoin protocol is open-source, decentralized, and has robust checks and balances, the bitcoin community involved in maintaining the network is a group of technical folks who, more or less, share the same ideology and motivation. The technical nature of the community is a barrier for the everyday person to participate in bitcoin’s oversight or to even have a say, since owning or holding bitcoin does not give any sort of straightforward, non-technical access to the governance process of the bitcoin monetary system and to any decision making power on the monetary asset itself. Also, the highly technocratic nature of bitcoin’s governance structure coupled with the growing dominance of bitcoin miners and centralized institutions entering the bitcoin space make it susceptible to be co-opted and controlled by like-minded, dominant groups, contrary to bitcoin’s claimed ethos.

The point of bitcoin is to establish a monetary system that is fixed and governed by hard coded rules run by a protocol rather than being managed by humans – this is the appeal for its niche supporters. This fundamental feature is in fact undemocratic, since it assumes there is only one proper form of money and one proper system for how money ought to be, and that this system should be fixed and unchangeable. Nevertheless, there is a process to make changes to bitcoin, and changes to the code do occur. Again, the point raised here is not to argue that democracy is the best form of governance or that bitcoin is “bad” because it is not democratic, but that the narrative around bitcoin being for the people and democratic is deceptive. Rather than it being for the people and democratic, bitcoin represents a highly decentralized, technocratic movement or form of governance over a fixed, rigid, and codified money. A movement with tones of financial populism and demagogy aiming to mobilize people via a deceptive narrative of it being for the people and democratic.