And just to drive home this point, let me show you three different aspects
of Bitcoin and where they fall on the centralization, decentralization spectrum.
First, there's the peer to peer network and this aspect of Bitcoin,
I would say, is the closest thing to purely decentralized.
Why is that?
Because anybody can run a Bitcoin node, and there's a fairly low barrier to entry.
You can go online, you can download a Bitcoin client yourself.
It requires a lot of disconsumption on your computer, but
basically you can run that on your laptop or your PC yourself and
currently there are several thousand Bitcoin nodes.
And so this really resembles a peer to peer decentralized system.
But that's not the only component of Bitcoin.
There's also Bitcoin mining, which we'll study later in this lecture and
Bitcoin mining is technically also open to anyone.
But it turns out that it requires a very high capital cost.
It's a consequence of how the system happens to have evolved.
And because of this, there has been a high centralization or
a concentration of power in the Bitcoin mining ecosystem, and
the community frequently sees this as quite undesirable.
So this aspect of Bitcoin is not quite as decentralized as one might want it to be.
And, here's a third aspect, updates to the software.
And this really gets to how and when rules of the system change.
And once again here, one can conceptually imagine that everybody running a Bitcoin
node will look at the Bitcoin specification, and maybe even create their
own software and again, you have a purely decentralized system.
But of course, that's not how it works in practice.
The core developers are really trusted by the community,
and they have a lot of power when it comes to determining what
Bitcoin software each of these nodes will run on their computer.