Topic: Has Bitcoin Finally Lost Its Decentralization? - page 4. (Read 1008 times)

This is true and I would be really worried as Bitcoin holder if it switched to PoS.


Control = Money, Big players are able to pump and dump price - the more bitcoins they control the more they can control the price.
Their wet dream is of course Bitcoin becoming PoS.

Bitcoin hasn't lost it's decentralization because you can use Bitcoin in the way it was made without any problems. You can buy Bitcoin too from anywhere and transfer it to your self constodial wallet and have full control of everything without it being frozen or you get restrictions from sending them out of your wallet as you would have had if you didn't have control of your wallet. Bitcoin is getting wide adoption hence all the things happening is making it look like it is getting centralized. Big money from big players are getting into the market because they're getting to know about Bitcoin and they are investing with force and introducing other things like ETF and it's bringing more investors into the market. They haven't centralized Bitcoin and they wouldn't be able to do that if they wanted to do so because Bitcoin is built differently and they are interested in making money not to control.

Don't be confused with centralized company integrating the Bitcoin network into their service and Bitcoin decentralized network.  They are two different things.  Not because Bitcoin is integrated to centralized system, Bitcoin is now centralized.   Bitcoin with its decentralized nature is rooted in its Blockchain technology.  Unless this technology is turned into centralized blockchain technology, then it can be said as centralized, other than that Bitcoin will always be a decentralized network.

It's not the only truly decentralized project.

Bitcoin has not lost it's centralization--it's the only truly "decentralized" digital currency in the sense that a central entity could not easily take control of it (although it's not completely impossible, just very hard and very unlikely to happen).

All other cryptocurrencies are "centralized" in the sense that they can be, relatively easily, controlled by a single entity e.g. a government that wished to order it to do something. (This is due to them being a PoS model, or simply a smaller network that could more easily be taken over with a 51% attack).

Bitcoin's market cap today is about $1.1T. The total market cap of digital currencies is a little over $2T.

In other words, almost half of today's market, as defined by individual investors voting with their money, is not decentralized.

And on top of that, most individual holders of Bitcoin hold it using a broker or an app--a centralized entity that holds their Bitcoin keys (or more often, simply a database entry connoting their holding), meaning that most consumers don't use Bitcoin in a centralized way.

So Bitcoin hasn't lost it's decentralization, the broader market for digital currencies has. Consumers have shown us that they do not care about decentralization--all they seem to want is a meme investment instrument, not a hedge against government intervention or all of the stuff Bitcoin was founded to do.

Satoshi invented a system that was very useful and interesting to... thousands of people across the world. Then millions more people started using that same invention for something he never intended: speculation.

(And can somebody explain why you should use the blockchain architecture for a system that is effectively controlled by a single entity? That sounds completely pointless to me).

Current supply: 19,747,143 BTC

Of which 18,321,811 BTC corresponds to 92.78% of supply is held in 1.87% of wallets.

Source:
https://bitinfocharts.com/top-100-richest-bitcoin-addresses.html
http://addresses.loyce.club/

it's obvious he doesn't understand the meaning of Bitcoin being decentralized. If the numbers of holders that currently owns Bitcoin and how much Bitcoin they hold in total can determine if Bitcoin will suddenly change from being decentralized to become centralized, government would have team up together to buy majority of Bitcoin so they can have full control of it. That people are still getting involved in Bitcoin is mainly because it's still decentralized. if for any reason Bitcoin gets control by a selected few, most prospective adoptors would shy away from investing in Bitcoin and will be forced to politicize it. If more Bitcoin whales continue buying Bitcoin, the only concern is going to be that anyday they choose to sell off all thier Bitcoin, it's going to affect Bitcoin price for the moment but because we have different holders of Bitcoin ranging from individual, institutions and even exchange, it's going to be almost impossible for such thing to ever happen.

Bitcoin will never lose it's decentralization in network, but Bitcoin would be centralized if all coins were owned by big institutions/people. What's the point to own the network when you didn't own the coins? they can do anything they like, while the miners and people can only hoping they will sell the coins to us. They might sell their coins, but in ridiculous price.

That's why if you don't want such kind situation happen in the future, make sure to not buy ETF and avoid to use centralized sites to hold your coins.

I think OP is suggesting that due to the fixed amount of coins that will ever exist (in current version of protocol) and the fact that with time some bitcoins gets lost forever and the number of actual coins that are available for the public is shrinking - this companies will own substantial amount of BTC to control the market in terms of price and will be able to decide who gets to use it so there is a kind of centralization and the system becomes permission-able instead of permission-less.


In this scenario where few centralized entities own majority of coins, censorship could be imposed.

Is there any true Decentralisation?  

As long as people are financially built different they have less/more assets pertaining to their finances and current situation, which means if a person holds a huge sum, undoubtedly he can sway the market and I have come to believe that people who are rich can contact each other and make profits together by dumping and pumping the market.

I do not believe that there is true decentralisation its a notion and bitcoins is still faring better than other currencies in this state but as long as people hold different amounts their market ratio is going to be different and that’s where the whales come in.

I believe bitcoin was never truly decentralised and its as decentralised as it was supposed to be, we cannot truly change this can we ?


Yes but I believe he is trying to hint towards the fact that whales can sway the market and its not as free as a true decentralised currency should be)

Can you elaborate what you mean by this, as i find this to be a weird argument. Imho it's echoes of the fud from the time pos plans were announced for eth and people who had invested on their mining equipment for eth were in danger of losing their living, so they freaked out. And we can see that majority of the people wanted to use new eth, so even that decision doesn't seem to be centralized. Owning 51% of eth won't allow you to do as drastic measures as owning 51% of the hashpower. And in both cases, attackers would just be shooting on their own foot.

And same centralization argument could be used for bitcoin as well, as in bitcoin you can just replace those whale coin holders with giant mining farms that hold majority of the hashpower.

The more big companies, corporates buy bitcoin the more its popularity rises. But does that change the fact that bitcoin is not being controlled by a central figure? No - hence it does not "dilute" its decentralization

Gaining spread is not the same as centralization here.

I am very happy to see it spread, the more it does the more scarce it becomes to common people and the price rises. Hence it becomes a good coin to store value in and trade in the long term.

No, Bitcoin is still decentralized. It is an internal property of Bitcoin. The only thing big groups can do is manipulate the price by buying/selling. Sure they can buy off the devs but once those devs go against the Bitcoin community, they will no longer be accepted as devs. In fact, anyone can be a dev. All you have to do is make a contribution to Bitcoin code which the larger part of the community agrees with.

Bitcoin is a best cryptocurrency in decentralization and if Bitcoin lost its decentralization, it will be the last cryptocurrency fails to maintain decentralization of its network. Other cryptocurrencies (altcoins) would lose their decentralization at their blockchain launches by bad designs or with time like Ethereum became more centralized after its upgrades and switching from Proof of Work to Proof of Stake.

If Bitcoin has a day to lose its decentralization, we will no longer have any decentralized cryptocurrency. This means cryptocurrency community has something to defend together.

OP, not sure why you would think it has lost decentralization. Nothing has changed. It's decentralized as it has always been. Seems like you don't understand what decentralization means. Anyone can own Bitcoin, that doesn't change its decentralization.

The simple and direct answer to the OP question is NO, Bitcoin has not lost it's decentralization. Institutions and governments only have control over the amount of Bitcoin that they hold, just like any other hodler will have the control of the amount of the Bitcoin that they hodl. The Bitcoin blochchain is not centralized therefore not in the control of any single entity. Bitcoin is a unique decentralized digital cash that gives it's holders freedom and privacy from any third party including governments and institutions if held in a none custodial wallet.

Remember one thing, it is the decentralized nature that makes bitcoin valuable today, so if it loses its decentralized nature and becomes completely centralized, I believe it will become worthless. The decentralized nature is what makes bitcoin different from other currencies and the rest of the crypto industry, if this is lost then who needs bitcoin anymore? Meanwhile, many altcoins are easily scalable, have cheap transaction fees, fast confirmation times... altcoins are almost completely superior to bitcoin, but their fatal disadvantage is centralization. So they can never compare or surpass bitcoin.

Indeed coins are sold to individual persons, big businesses, corporations, investment groups, countries, etc but coins are not votes as to Bitcoin consensus. The Bitcoin network does not operate in such a way that those who have more Bitcoin will have more say in its operation. Bitcoin's decentralization does not work that way. Even if you own half of all the circulating supply of Bitcoin, it does not mean you can decide as to what path Bitcoin will take next. The distribution of the coins is not what determines how decentralized the network is.

Let's say hypothetically that CIA is actually the creator of BTC (as per conspiracy theories), how decentralized is it if they sell their 1M+ stack to like already big holder BlackRock/Microstrategy? :/

What happens then? Is that enough of a "market share" to make things scary in freedom/decentralization aspect?

Bitcoin remains decentralized now or forever, period. There is no question that Bitcoin is still decentralized or not just because more people or companies are interested in it. In fact, we can say that the distribution of Bitcoin is still at a level that is not alarming, even when there are several companies or individuals who hold hundreds of thousands of Bitcoins in their wallets. People who want to invest in Bitcoin can still buy it even for as little as a few dollars - and they can freely buy or sell Bitcoin without anyone being able to intervene with their transactions.