I'm a bit confused about what you trying to say but Bitcoin will never become centralized because Satoshi made Bitcoin for decentralization.
If the fees are rising it's just temporary there is something going on that is why you see transaction fees rise just like today because the price touched above $50k that is why people right now panic to move their BTC to the exchange before it drops and make a profit.
If the fees are rising it's just temporary there is something going on that is why you see transaction fees rise just like today because the price touched above $50k that is why people right now panic to move their BTC to the exchange before it drops and make a profit.
Mining is the decentralization mechanism. My implication is that, if only big players have sufficient capital to bribe miners with transaction fees, then the peer-to-peer aspect of the network could be effectively undermined (no pun intended). I recall this same thing happened in 2017, so it appears to be a recurring issue.
What about people with only small portions of bitcoin, that end up being stuck, because transaction fee exceeds total value?
What will happen when only large institutions can afford to use Bitcoin's blockchain, due to rising fees? Won't this centralize the network if most can only trade bitcoin on centralized exchanges?
I guess bitcoin developers will not let it get to that point. Also there are layer 2 solutions like lightning network and liquid network. Bitcoin network to become centralized has nothing to do with the transaction fee. You can hold small amount using lightning network or liquid network and hold huge amount on the blockchain.LN is a hub-and-spoke design which inherently promotes centralization, just like a major airport. As channels grow increasingly popular, they begin to look more and more like a bank, at least in my eyes.
From the look of things right now, Bitcoin is progressing when it comes to fees. During late periods of last year to very early this year, Bitcoin fees were drastically high due to conjestions caused by ordinals.
However as I type, Bitcoin fees have come so low to an average of about 24sat/byte for normal fees which would arrive between periods of an hour to 30 minutes.
If the network is conjested, fees on centralized exchanges will also increase. So theoretically they still can't control transaction rates since miners are the ones who confirm transactions not exchanges although some large exchanges have mining pools for faster confirmation.
However as I type, Bitcoin fees have come so low to an average of about 24sat/byte for normal fees which would arrive between periods of an hour to 30 minutes.
What will happen when only large institutions can afford to use Bitcoin's blockchain, due to rising fees? Won't this centralize the network if most can only trade bitcoin on centralized exchanges?
If the network is conjested, fees on centralized exchanges will also increase. So theoretically they still can't control transaction rates since miners are the ones who confirm transactions not exchanges although some large exchanges have mining pools for faster confirmation.
"Some large exchanges have mining pools for faster confirmation"
This is exactly the type of centralization I'm voicing concern about. Isn't there an obvious conflict of interest if CEX's use in-house mining pools to add their own txs to the blockchain? What happens when these exchanges form a consortia? This work-around doesn't seem to lead us down a sustainable path...
