Question

Who controls cryptocurrencies?

Answer 1

Older cryptos like bitcoin did not had any “control” or “governance” in mind. They end up being controlled by different, often conflicting, interest groups: Investors, service providers, miners and developers. The dynamics of their interactions is very complex and political. No one group “controls” bitcoin individually.

Newer coins have different “governance” models. Some by design, some by accident. Litecoin and ETH for example are controlled by their creators because they happen to be very influential people in their respective communities. This was not “by design” but rather by “accident”. If those guys happen to lose their influence, control of those coins should fall in the same political standstill of bitcoin. Other coins have governance built in by design. DASH has constructed governance mechanisms using it’s masternode system. Masternode owners are the ones who “control” DASH. Decred is another coin with governance mechanisms. It was the first coin built from the start with governance in mind and governance is one of the main goals of the coin. It uses a hybrid of PoW and PoS mining to enable the stakeholders to vote on features and even on unrelated issues. This makes the coin similar to public run company, where shareholders can vote on company decisions.

There are many others, with different approaches to control and governance, but those are the main ones: The creator (litecoin, ethereum); the shareholders (decred, DASH); “I’ts complicated” (or “no one”) (Bitcoin).

Answer 2

Right now, cryptocurrencies fall under the jurisdiction of the SEC for investment, the CTFC for any crimes involving interstate commerce, and the IRS, making it subject to either income or a capital gains tax.