Abstract
This chapter conceptualizes computer code as constitutional rules and constraints governing blockchain technology. The Bitcoin protocol is essentially a set of rules written in computer code, governing what is, and what is not, allowed by the participants in the Bitcoin network. In this sense, it is like a constitution. No single participant can change the rules, but new rules (in the form of upgrades to the open-source software) can be advanced by different participants. The key to understanding Bitcoin’s rules is to understand consensus at all levels. In this context, Buchanan’s scholarship analyzing constitutional choice is extremely relevant to blockchain technology in general, and Bitcoin in particular.
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Notes
- 1.
Double-spending is the act of using the same digital currency for more than one transaction.
- 2.
- 3.
Every public key is 256 bits long and the resulting hash from the public key is 160 bits long. The public key is used to indicate the ownership of an address to receive funds. A private key is a randomly generated string (numbers and letters), allowing bitcoins to be spent. A private key is always mathematically related to public key or the wallet address, but only known to the owner and not required to be shared for transactions. The public key is mathematically derived from the corresponding private key, but the beauty and benefit of cryptography is that it would be nearly impossible to use the public key to derive the private key, requiring about a trillion years for a supercomputer to crack the reverse mathematics solution.
- 4.
A similar argument has been made for cyberspace and other technologies by Lessig (1999). Lawrence Lessig famously described the code that regulates cyberspace as law, in that this code , or architecture, sets the terms on which life in cyberspace is experienced. If code is the law that regulates behavior or the individual participants, then the changes in code also lead to changes in the behavior of the participants.
- 5.
This is only an estimate. No one knows how many nodes there in the Bitcoin network since all are not reachable. Some website like https://bitnodes.earn.com update the number of reachable nodes frequently.
- 6.
At this point it is important to understand the difference between nodes and miners. Full nodes are the computers have a complete record of the blockchain and verify all the transactions in the system and enforce consensus rules using Bitcoin Core. There are also nodes that are not full nodes, which only have a small portion of the blockchain and are mainly used to transact and can be used to connect with full nodes for transactions. Miners are full nodes, but in addition to maintaining the complete blockchain , they also perform proof-of-work to mine new Bitcoin.
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Rajagopalan, S. (2018). Blockchain and Buchanan: Code as Constitution. In: Wagner, R. (eds) James M. Buchanan. Remaking Economics: Eminent Post-War Economists. Palgrave Macmillan, Cham. https://doi.org/10.1007/978-3-030-03080-3_17
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