Who controls cryptocurrency?
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Who controls cryptocurrency?

written by John Murphy | October 24, 2022

Since fiat money is controlled by issuing governments, who controls cryptocurrency? As we know, cryptocurrency operates in a decentralized environment, which means it is controlled by everybody and nobody at the same time.

A decentralized ecosystem surrounds the cryptocurrency market. So, pointing out a definite central control unit is not possible. Although multiple crypto projects are successfully running in the market, investors cannot physically know who owns them.

Many governments are considering regulating the cryptocurrency framework, but it is still under consideration. It just adds to the volatility. 

In this guide, we will develop a sense of understanding by answering the question of precisely which controls cryptocurrency. So, let’s get started.

Understanding decentralization 

Decentralization is the term that dictates the control of cryptocurrency. By definition, decentralization is “an activity or organization controlled by several offices or authorities rather than one single one.”

Subsequently, how can a system be efficient without any controlling unit because it seems unnatural? But cryptocurrency has defied this question. Cryptocurrency work tidy in math but is lawless in control.

We are observing a new type of control when it comes to cryptocurrency. It is intangible, purely digital, and software-based. 

The decentralized cryptocurrency has defied many rules. Digital cryptocurrencies escape the control of a group of individuals or a single entity.

Role of stakeholders

We will discuss the key stakeholders and their roles operating in the cryptocurrency environment. Since we have already established that a decentralized commodity is controlled by many in small parts by the same formula, let us now probe into parties with high stakes in cryptocurrency that can somehow influence the control.

  • Creators

Creators are the persons behind a particular cryptocurrency. They develop cryptocurrency. Creators influence the crypto to the extent that they provide supply. They create a system and implement it. Developers are the ones keeping tabs on the regular improvements.

Without a doubt, creators have a significant impact on cryptocurrency. But again, they are not the only ones controlling the cryptocurrency. They single-handedly do not own a particular cryptocurrency but partially manage a segment of the entire aura.

  • Miners

Miners are the individuals who run the programs required to generate cryptocurrency. It is a sophisticated process that requires high-end hardware and software.

So, miners add new cryptocurrency into the existing blockchain through complex computational math problems. In simple terms, it is a process of creating new digital coins.

Miners, as we can see, have limited control over cryptocurrencies. They are limited only to producing new coins and getting their mining bonus.

We can deduce that miners, like creators, control a tiny proportion of the entire cryptocurrency environment. We cannot term them as the sole controllers of the cryptocurrency.

  • Exchange

Cryptocurrency exchanges offer a platform where buyers and sellers can interact. They suggest buying and selling services and making a commission. There are many well-reputed exchanges.

So, does exchange control cryptocurrency? Technically speaking, the answer is no. Exchanges offer services to store and trade cryptocurrencies. They neither control, monitor, nor generate rules.

Thus, exchanges have their role in the cryptocurrency network. They are not charged with the control of cryptocurrency.

The maximum an exchange can control is to avoid access to digital currency; However, legally, they cannot do so. They, too, have their control limitations.

  • Private Wallets

To avoid unauthorized access to digital currencies, many firms started offering private wallets facility. So can we say that they are the ones who control cryptocurrency?

A close view of that fact can also reveal that it is not valid for wallets. Since they only hold digital currency, by offering privacy services. They act as custodians, not as controllers.

Users at any point in time withdraw or transfer their cryptocurrencies. So, private wallets only have limited access to controlling the cryptocurrency.

  • Investors

One can argue that investors control cryptocurrency. However, this is valid to a certain extent. Investors have control only to the point of their investment.

They do not design rules and regulations for monitoring the overflow schema for the trade of cryptocurrencies.

Hence, like all other stakeholders, investors do not fully control a particular crypto coin.

  • Governments

As cryptocurrency is in its early days, most governments do not vet the use of cryptocurrency. However, few governments have authorized digital coins, but it is in an evolving phase.

In addition, since no monetary policies or trade rules are set by governing bodies; hence governments do not fully own cryptocurrencies. However, acceptability trends suggest that governments will regularize the crypto trade.

Till then, we cannot label governments as controlling agents of cryptocurrencies.

Frequently Asked Questions 

Who controls cryptocurrency?

Practically speaking, no one controls cryptocurrency as a whole. Many stakeholders influence cryptocurrency in bits and parts.

Who controls the price of cryptocurrency?

Cryptocurrency price is set by the demand and supply mechanism. The price is like any other commodity, stock, and security.

Can governments control cryptocurrency?

Yes, governments can take control of cryptocurrency and rules and laws circulating its trade. Few governments have recognized the business of crypto coins as legal after drafting rules and regulations.

Will crypto destroy the existing baking system?

Only time will tell, but by the look of it, cryptos will not destroy banks. It is fully capable of running its parallel trading channel.

Who controls Bitcoin?

Bitcoin works on a decentralized phenomenon, which means there is not a single source of power that control Bitcoin. Instead, multiple stakeholders influence a tiny part of the whole Bitcoin structure.

Final Words

Who controls cryptocurrency? Everyone and no one! Decentralization of operations makes cryptocurrency trade with no single point of control. It may seem against the world’s law, but this is how it operates.

We can relate a little control to each stakeholder. But no one person or corporate body can make this claim of controlling the whole crypto ecosystem.

We hope our guide makes it possible for you to understand how this entire network operates. Keep visiting this space for more cryptocurrency related topics.