Topic: Institutional investors are buying Bitcoin's future... How do we stop this? - page 2. (Read 338 times)

I agree.

I don't know why, it seems that the human tendency is to be unhappy. We have been waiting years for a price increase like this and lately I keep seeing posts like this: that if the Bitcoin is not distributed equally, that if the companies that are buying it are going to kill it...


If companies take Bitcoin out of the circulation, they reduce the offer even more, thus driving up the price. The miners may get fewer transaction fees but they get more profits from they mined Bitcoins. Remember that there will be Bitcoins to mine until 2140, we can only guess what will happen then. Bitcoin may not even exist.

You are too conspiratorial, it seems to me.

I did not know that could happen, I do not know.  What can be done like us small users to stop these big corporations?  There is nothing we can do no matter how much they buy, collect and handle.  I just thought it was a pure positive result towards the development of the community with the continued adoption of these institutional investors but it also has a negative effect if that happens.

I had never thought much of the negative impact of having institutions involved in crypto investment since they are using it as a hedge fund. However, what I am wondering is, how long do these institutions intend to do this, imagine big institutions being whales in crypto. Will they manipulate the market in the future, if more and more institutions or bigger names jumping into crypto and hoard, will there be limited supply circulating for small investors or retail investors.

In any questions, you should always keep in mind the worst case scenario in advance and assume that everything is possible  Bitcoin became famous and gained its current good weight largely due to the principles of self-organization and decentralization embedded in the structure. Having a large number of institutional investors in the game gives great hope that this order of things will continue, because competition is a great thing. And I personally do not believe that a "51% attack" is possible in the near future. Or I really want to believe 

Are you sure that the companies will only execute off-chain transactions? Why wouldn't they want to use Blockchain? Otherwise, what is the whole point of all this global Bitcoin adoption? They will only destroy the system
However, for that to happen, wouldn't all these companies together need to own 51% and above of available coins? Do you think that's a possibility in the nearest future?

I believe that on-net transactions will not be replaced by off-net transactions in registers. To do this, users must trust only numbers on the screen or on paper, while not making any transactions at all. This is simply not possible, In addition, it all depends on the user of the cryptocurrency, but we will not agree to this, and there are many of us😉. In addition, the fact that large capital acquires bitcoins for storage already has a positive effect on pricing, since a significant amount of bitcoin leaves the supply on the market. as a result of this process, the shortage of Bitcoin will lead to an increase in the price of the coin.

This seems a hugely exaggerated claim.  Firstly, whenever I have paid for something in Bitcoin it has been through Bitpay, and this 'internal ledger' thing you're talking about seems to be made up.  All I did was send Bitcoin to the address Bitpay gave me and Bitpay then has the option for the company of whether they want to keep the Bitcoin or convert it to its fiat value, providing stability for accepting Bitcoin payments.

Also, even in a scenario where what you're talking about became a reality, there wouldn't be a problem since most transactions are P2P or to and from exchanges rather than with merchants.  That would create demand for space on the network and thus transaction fees.

Right now, the transaction fees being paid make up approximately 1/6th of the block reward - even in the very unlikely scenario that the sum of transaction fees paid to miners decreases over time, there would still be some transaction fees and miners would not be 'mining for free'.  The amount of hashrate directed to the network would decrease and the difficulty adjustment within 2016 blocks would keep the reward appropriate.

It is true that many first heard of BTC only at the end of 2017 when the media made an amazing FOMO effect and news about BTC was everywhere. I remember witnessing for the first time that my national television covered the topic of BTC and cryptocurrencies in a daily political show - but also that few of the interlocutors present said anything meaningful on the subject - because honestly they had no idea what they are actually talking. Of course, they were all stunned by the price of something that only a year ago was worth as much as 20 times less.

I first heard of BTC sometime in late 2011, but it wasn’t until 2014 that I became seriously interested in the whole thing - although it took me a while to figure out what Bitcoin really is. Yet all this does not change the fact that BTC has existed all these years, that knowledge of it has been publicly available online, and that anyone has been able to invest throughout that time. I believe many knew, but did not believe, that Bitcoin would achieve this kind of success - we cannot blame anyone but ourselves for this.

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I've already written what I think about the opportunities the average Joe had, and that we can't point the finger at companies and rich people who today do exactly what was predicted for years. Satoshi dealt the cards, but apart from the technical stuff, he didn’t close the BTC under the glass bell and set up an invitation system by which we could tell who could participate in the party and who couldn’t.

As for the fact that large investors will destroy the miners, I would not agree with that assumption - because they are not the ones who invented the Lightning Network, nor will they be able to manipulate BTC in a way that will create their ledger databases. Anyone who tries to manipulate the basics on which BTC works today will go through the same thing as everyone else who has tried to make their own version of BTC.

NONE.
There is no way for us to stop those rich people or institutional investor with what they are doing.

There is a famous quote that says "If you can't beat them, join them". What we can do right now is to just ride the waves, set a target sell price and wait after selling. Crypto market is a decentralized market where anybody can buy anything and there is no way for us to stop them. They are a group of rich people and they have a lot of money obviously. We Average Joes can't stop them from buying Bitcoin.

I know that these institutions are buying huge chunks of Bitcoin everyday and the chances of it being manipulated is going higher but there is nothing we can do with it but to be ready if in case the worst case scenario will happen.

#Lucius has got a point, but it is not about the average Joe not having the money to buy bitcoins, but rather large institutional organizations taking large amounts of coins out of circulation to make profits with it's own ledger or database. (They will charge fees for the service they render on their platform)

The fees that they will be charging , will not go towards miners fees... because this will happen within their software and not on the Blockchain. The miners get their payments from the fees paid when you do on-chain payments on the Blockchain. (Similar to what is happening with the Lightning network)

The miners will have to supplement their income by hosting Lightning Network hubs, but that will never be enough to cover their expenses.. because the Bitcoin difficulty is just too high. (It might go down..as miners are forced to exit the mining scene)  

Good points Lucius but you also have to remember a large portion of people who are
in Bitcoin now didnt know about it 5-6 years ago.

I'm a little worried also about the vast amounts of Bitcoin being bought up which may
never be in circulation again for 10 or 20 years and when Bitcoin is available for sale
they too may be snapped up and added to the long term hold.

These actions have a "positive" effect on Bitcoins price and as ordinary people liquidate
to FIAT to buy their Lambo's the whales will buy to hold.

isn't this what Paypal is doing like no coins are going to be withdrawn from them but they can make transactions to the merchants they have. there may be users going to be using their own platform and transactions are just in their internal ledger system but with the warnings, people will in due course realize the coins are not theirs to own and will not use their centralized system.

In my opinion, the world is objective.  

Currently, we see that bitcoin is not a common means of payment.  On this I absolutely agree with Nassim Taleb (the author of the concepts of the black swan and antifragility).  

At the same time, Bitcoin is in great demand as the world's reserve currency.  This is reality.  

If countries and large corporations use it in this capacity, they will bear the cost of maintaining the network.  

Bitcoin mining will be a strategic industry like a military-industrial complex.

At the same time, Bitcoin will be decentralized, as there are more than 200 countries and tens of thousands of large corporations in the world.

The answer is simple - we can’t stop anyone who has the money and intent to buy BTC to buy as much and when they want. Ordinary people have had the opportunity for more than 10 years to invest in Bitcoin at ridiculously low prices compared to these today. If for the first 5-6 years there was doubt whether the whole thing would come to life or fail, after that a lot of things became clearer - so I'll ask a counter-question - why didn't the average Joe ask this question you're asking now 5-6 years ago? Well, probably because most of them are not here because of technology, but only because of profit - and such people do not mind that big investors invest money in BTC.

I hope that some new solutions will be found so that miners remain interested, and at the same time that the fees are such that the average user does not give up on-chain transactions. The next 10 years may be crucial - even Satoshi once wrote something in the style that in 20 years there will be a lot of transactions, or none at all.

I'm afraid that there aren't any means to stop this if you don't own an exchange or you do not have the $$$ to move bitcoins for yourself towards another market wherein institutional investors are barred from participating. This is one of the boon of a free market, literally anyone can join and buy whatever amount they want and no one will restrict them into doing so. Whatever happens to the amount they bought is none of every one's business.


At that point, the world is already too deep of bitcoin that they will not really care much about the 'new' iteration of it that combats the corporations. It would take a new Satoshi Nakamoto in order to sway everyone's minds off of bitcoin that has succumbed to the power of the corporations.

I get the feeling that most of the people do not understand the gravity of this situation ...and what the difference is between "on-chain" and "off-chain" transactions.

Effectively, if you take bitcoins and you place it in cold storage and you only keep it there as proof that your own token is backed by it, then those bitcoins never move. The in-house ledger system and/or database that was developed will keep track of the tokens you created to represent the real bitcoins in your cold storage.

Now the benefit for those companies is this... The actual bitcoins never move, so it increase the security of those coins. (The negative side is this, their own tokens are centralized and thus more vulnerable)

Now, if those coins stay in cold storage and they just add more and more coins as people buy their own in-house token, then the supply of available bitcoins decline. Also, if the coins never move or if less coins move.... less miners fees are paid ..and we know the future of the Blockchain's success is in the reward for the people doing the mining.

A possible scenario would be that too little coins become available for people to buy and the public might then have to switch to a new Alt coin to f#$k with these large companies. (effectively killing Bitcoin)  

Your fallacy lies in the idea that transactions will move to centralized IOU systems. Any person who is into Bitcoin for the technology would never use such system, so they won't be taking Bitcoin's users, they will have brand new users, who would probably not use self-custody Bitcoin due to lack of knowledge. You are also forgetting about Lightning Network, which will also offer cheaper and faster transactions, but without giving up your control of the coins.

You cant do anything about it. Bitcoin is permissionless money. No one, even if he is a banker dont need a permission from you or me or anyone else if he can buy or use Bitcoin. It is that simple. At the end Bitcoin will be mostly in hands of the bankers. They simply print USD and EUR and CNY and buy BTC.

Is there a need to stop this? If institutions keep Bitcoin as a form of cold-storage and sell IOU's to customers as proof of their ownership, they cannot stop anybody from demanding the keys. As more and more people come into the fold, they'll either want keys or they will realize the fallacy of such products. For a significant portion of population, such products may well be acceptable as long as it gives them returns on their positions.

Yet, usage in this way will mean that the hundreds or probably thousands of early adopters and small businesses that have some way of earning and using bitcoin will also become powerful and significant. It would represent the shift of wealth generating asset to a new diversified class of people rather than just the old elites. While this may not be perfect, it sure is an improvement.

As far as the concern regarding BTC going into cold-storage and never needing on-chain transactions is concerned, that situation is not so horrifying as long as there is block reward until a few decades. Post that, I think enough people would come to be enlightened about having their own keys. As individuals, we can do our part by keeping our own keys.

I'm not sure that there's a way to stop this. It looks to be inevitable for institutional investors to be flocking in. I've even heard of the trading app 'Robinhood' (the one infamous for stopping the wallstreetbet traders from further buying doge and GME stocks) will soon adopt crypto as well. For sure more users will be able to buy crypto with the use of Robinhood as it will be easier but then this will be regulated by them. But honestly even with wide institutional adoption from payment merchants such as paypal, visa and mastercard, and bitcoin was used as a payment option, it wouldn't dominate the blockchain transactions. I doubt that a large percentage of the population would utilize this as only about 1% is said to own crypto. For now, institutional investors will be in favor for the crypto space as this exposes to more adoption. I think Litecoin has better chances of being adopted as a payment rather than BTC. People look at it more of as a store of value now.