Who Can Say No in Bitcoin

The Problem: Ordinals inscriptions created a block space crisis, spiking fees and network congestion. Core developers proposed client-level filtering to censor them. The Solution: Miner economic incentives vetoed the change. Processing inscription transactions was more profitable than enforcing a social consensus. This proved economic majority (miners + users) can override developer intent when aligned.

• Key Actor: Mining Pools (F2Pool, Foundry)
• Veto Power: Control over transaction inclusion & block template construction

The Problem: Bitcoin needed enhanced privacy (Schnorr signatures) and smart contract flexibility without a contentious hard fork. The Solution: A near-unanimous soft fork achieved through years of technical diplomacy. The veto was exercised in advance—by not activating—until nearly all ecosystem players (miners, exchanges, wallets) signaled readiness. This shows veto power is most effective when used to enforce coordination, not to block progress.

• Key Actor: Coordinated Ecosystem (Miners, Nodes, Businesses)
• Veto Power: Activation signaling via miner votes and node adoption

The Problem: Bitcoin L1 is purposefully limited. Scaling and complex applications require innovation that cannot be mandated on the base layer. The Solution: Sovereign Layer 2 networks (like Lightning, Stacks, Rootstock) veto L1's limitations by exiting to their own rule sets. Their security is anchored by Bitcoin, but their development roadmap is independent. This creates a veto via fork—the ultimate check on L1 stagnation.

• Key Actor: L2 Development Teams & User Bases
• Veto Power: Ability to fork and build sovereign systems with Bitcoin-finality

Miners control the canonical chain through hash power. They can reject protocol upgrades by refusing to signal or mine blocks with new rules, creating a high activation threshold for changes like Taproot or future covenants.

• Key Benefit: Protects against rushed or contentious hard forks.
• Key Risk: Can lead to stagnation; upgrades require multi-year, multi-stakeholder consensus.

Full nodes are the network's immune system. They independently validate all blocks and transactions, rejecting any that violate the rules they run, regardless of miner approval.

• Key Benefit: Prevents miner-led chain splits or invalid state changes.
• Key Insight: Node operators are the ultimate sovereigns; their coordinated choice of software (e.g., Bitcoin Core) defines the network.

Users and holders enforce value through the economic majority. If a change is deemed harmful, they can reject it by refusing to transact on the new chain, rendering it worthless. This is the ultimate backstop.

• Key Benefit: Aligns protocol evolution with the preservation of monetary properties.
• Key Risk: A fractured economic consensus can lead to contentious splits (e.g., Bitcoin Cash).

Core developers have influence but no direct authority. They cannot force a change; they can only propose code. Their power is constrained by the need for broad, voluntary adoption by nodes, miners, and users.

• Key Benefit: Mitigates the risk of a centralized dev team dictating protocol changes.
• Key Insight: Successful upgrades (like SegWit) require years of technical debate and social coordination.

The high veto threshold makes Bitcoin anti-fragile to experimentation. New features (like Ordinals, Runes) must emerge within existing constraints, creating organic, user-driven innovation without protocol risk.

• Key Benefit: Base layer stability attracts long-term capital focused on monetary properties.
• Investment Thesis: Value accrues to the immutable ledger, not to the applications built on top (L2s, sidechains).

Successful Bitcoin builders don't fight the veto powers; they work within the OP_CODE and Tapscript sandbox. This drives creativity in layer-2 solutions like Lightning Network, BitVM, and covenant-based protocols.

• Key Benefit: Leverages Bitcoin's ultimate security and liquidity.
• Key Constraint: Innovation is harder, slower, but potentially more durable than on programmable chains.