The Psychological Differences Between Bitcoin and Ethereum Governance

An attempt to bridge the gap between good-faith advocates of both networks and show how the two largest crypto networks’ development processes matter for long-term success.

As the leading two blockchains in the world, Bitcoin and Ethereum have both garnered a massive following among crypto enthusiasts. However, despite their shared goal of decentralization, the two networks differ greatly in their governance models and development processes. These differences have led to frequent debates and discussions within the crypto community, with each side highlighting the strengths and weaknesses of the other approach.

In this article, we will delve into the governance and development processes of Bitcoin and Ethereum, exploring their similarities and differences to gain a better understanding of how each network operates and evolves. We will also examine the psychological aspects that influence the participation and decision-making within these networks.

At a glance: Bitcoin vs Ethereum governance

To provide a quick overview, here are some key points regarding the governance and development processes of Bitcoin and Ethereum:

Bitcoin governance is largely carried out by its community of users, developers and node operators through a decentralized and consensus-driven approach. There is no central authority or governing body that dictates changes to the Bitcoin protocol. Instead, proposed changes, known as Bitcoin Improvement Proposals (BIPs), are put forth by the community and undergo a lengthy and rigorous process of discussion, review, testing and eventual acceptance or rejection by the network participants. This decentralized governance mechanism aims to ensure that changes to the Bitcoin protocol are made in a transparent, inclusive and secure manner.

In contrast to Bitcoin's decentralized governance, Ethereum governance is more centralized, with a greater reliance on a smaller set of core developers and the Ethereum Foundation (EF) in guiding the direction and development of the Ethereum protocol. While there is still a community of users, developers and node operators involved in the governance process, the ultimate decision-making power lies with the core developers and the EF. This centralized approach allows for quicker decision-making and implementation of changes to the Ethereum protocol, as compared to Bitcoin's more consensus-heavy and time-consuming governance process.

Now, let's take a closer look at the governance and development processes of Bitcoin and Ethereum in more detail.

Bitcoin governance: A decentralized and community-driven approach

As mentioned earlier, Bitcoin governance is decentralized and largely carried out by its community of users, developers and node operators. This decentralized approach is in line with Bitcoin's overall ethos of minimizing central points of control and ensuring that the network remains true to its core principles and values.

The governance process in Bitcoin is largely driven by the community, with anyone being able to propose changes to the Bitcoin protocol through a Bitcoin Improvement Proposal (BIP). These BIPs are then discussed, reviewed and tested by the community over a period of time, with feedback and input being gathered from various stakeholders in the Bitcoin ecosystem.

If a BIP gains sufficient support and consensus among the community, it may eventually be integrated into the Bitcoin protocol. However, this process is not without its challenges, as reaching consensus on technical and impactful changes to a decentralized network can be a complex and time-consuming endeavor.

Despite the decentralized nature of Bitcoin governance, there are still certain individuals and groups that play a more influential role in the governance process. For instance, some core developers and long-standing community members may have a greater say in discussions and decisions due to their technical expertise, experience and contributions to the Bitcoin network.

Additionally, certain mining pools, which contribute to the security and block production of the Bitcoin network, may also have a degree of influence in the governance process, especially when it comes to matters related to mining and block rewards.

Overall, Bitcoin governance is a decentralized and consensus-driven process that aims to maintain the integrity, security and long-term sustainability of the Bitcoin network through the collective participation and decision-making of its community members.

Ethereum governance: A centralized approach with a focus on rapid innovation

Unlike Bitcoin's decentralized governance, Ethereum governance is more centralized, with a greater reliance on a smaller set of core developers and the Ethereum Foundation (EF) in guiding the direction and development of the Ethereum protocol.

This centralized approach stems from Ethereum's early development, where a group of core developers, including Vitalik Buterin, were tasked with overseeing the development and governance of the Ethereum protocol. As the Ethereum ecosystem grew and expanded, the EF was established to further support and coordinate the development efforts.

While there is still a community of users, developers and node operators involved in the governance process, the ultimate decision-making power lies with the core developers and the EF. This centralized approach allows for quicker decision-making and implementation of changes to the Ethereum protocol, as compared to Bitcoin's more consensus-heavy and time-consuming governance process.

However, it also raises concerns regarding the long-term sustainability and decentralization of the Ethereum network, especially if a small group of individuals or entities continue to wield a disproportionate influence over the governance and development of the protocol.

In recent years, there have been discussions and efforts within the Ethereum community to enhance the decentralization of the governance process. One notable initiative is the creation of the Ethereum Improvement Proposals (EIP) Editors, a