Please note that I’m writing this as a way of making sense of the world of cryptography and blockchains. I may write something that is incorrect, and when I do, please feel free to tell me that I have misunderstood the way it works.

I am using Bitcoin here as an example as it was the first successful attempt to create virtual money without a central authority. Before I started buying Bitcoin, I wanted to know who was in charge and who would I complain to if there was a problem.

It’s a question that many people ask.

The answer is, of course, not as simple as giving the name of an organisation. The code that is used to run Bitcoin is published and available to all. The way Bitcoin works is not important to understanding why there is no one organisation “in charge” of it.

Bitcoin relies on the feedback between multiple (thousands) of computers to verify the correctness of transactions that are put onto the blockchain. Once there is sufficient verification (called mining) measured by computing power, a block of transactions is added to the blockchain. The need for verification is the reason why transfers of Bitcoin are not immediate. Any transactions added to the chain that are not verified are subsequently ignored by the blockchain.

The use of computing power (proof of work) to verify transactions and to create new Bitcoin is why no one person is in charge of Bitcoin. It is possible to change the code and modify the way Bitcoin works but it would only be effective if accepted by more that 50% of the available computing power. There have been a number of cases where a group of miners wanted to change the way the code worked and started using the new code. This actually creates a second blockchain that duplicates the first one up to the point of the split.

It is called a hard fork, and it means that there are two blockchains. The reality of course is that the value of any coin depends on its acceptance and its use, something that is measured by the number of people who get involved in it. Anyone can take the code and create a clone of Bitcoin but if there are no users it is just code that runs on the maker’s computer.

So the person in charge of Bitcoin is both the persons who use it and the persons who mine it. The more people who use it, the more who believe in it and will pay for it. The higher the price the higher the rewards for the miners, meaning that’s it’s value is based on your belief in it (like fiat currencies).