Gary Gensler: "Bitcoin is not that decentralized" - page 7.

Abiky

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Quote from: NeuroticFish on February 18, 2024, 12:39:14 PM

I've seen a lot this misconception about Bitcoin decentralization. Actually I've just answered in another topic about this.
Gary Gensler doesn't understand that the decentralization of bitcoin is about the full nodes and the miners involved, not about the number of wallets containing big funds (and frankly, those are still plenty too).
And allow me to be a bit mean: maybe he confused it with Ethereum.

The network may be "decentralized"...but what happens when big companies, governments, and institutions accumulate all of the BTC (or at least, most of it)? Without people "owning" BTC (self custody), the blockchain will become the sole playground of the aforementioned entities. I could be wrong, though. Undecided

Frankolala

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Because bitcoin is stored on CEX doesn't change the nature of bitcoin from decentralized to centralized, and what I understand is that a lot of people do not understand that the bitcoin network makes it decentralized due to the way it is designed for nodes to control the whole system.

The only way that bitcoin can be weak in decentralized nature is if all the mining pools are bought over by government, where they choose whose transactions that they will add to the blockchain, but as long as miners don't accept such, bitcoin remain decentralized. This is why one must use a self custody wallet, and use DEX.

_act_

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Bitcoin is decentralized

Centralized exchanges and Bitcoin ETF which are centralized are not part of what that makes up the bitcoin network. If we are talking about bitcoin, we should be talking about the network and noncustodial wallets.

Quote from: NeuroticFish on February 18, 2024, 12:39:14 PM

And allow me to be a bit mean: maybe he confused it with Ethereum.

No, he knows that bitcoin is decentralized but centralized exchanges and other centralized ways of holding bitcoin by other users are centralized is what he was talking about.

NeuroticFish

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Quote from: Abiky on February 18, 2024, 12:33:45 PM

Your input would be greatly appreciated. Thank you.

I've seen a lot this misconception about Bitcoin decentralization. Actually I've just answered in another topic about this.
Gary Gensler doesn't understand that the decentralization of bitcoin is about the full nodes and the miners involved, not about the number of wallets containing big funds (and frankly, those are still plenty too).
And allow me to be a bit mean: maybe he confused it with Ethereum.

Abiky

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In a recent interview with SEC chairman Gary Gensler, there was something that caught my attention. The chairman stated that "Bitcoin is not that decentralized". That's "partially due to the prominence of centralized crypto exchanges". You can read all about it here: https://www.cnbc.com/2024/02/14/cnbc-transcript-sec-chair-gary-gensler-speaks-with-cnbcs-squawk-box-today-.html

I'm afraid he's right, especially when CEXs hold most of BTC's circulating supply (eg: Binance). It's even worse now with the recent approval of spot Bitcoin ETFs by the SEC. Institutional investment companies like BlackRock, VanEck, and MicroStrategy are accumulating large amounts of the cryptocurrency.

We're essentially selling our BTC to companies driven by mainstream governments' own interests. With this, Bitcoin's true value proposition has failed (banks win). At least, the code is open source. If BTC becomes compromised, what's stopping us from moving to a more decentralized chain in the future (Litecoin, Monero)?

Your input would be greatly appreciated. Thank you.

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